Deloitte refunds Australian government for AI-flawed report

Source: CFO Dive · 2025-10-21

The amount represents less than a quarter of what Australia’s Department of Employment and Workplace Relations originally paid for the flawed study.

Big Four accounting and consulting firm Deloitte has refunded over 97,000 Australian dollars ($63,000 USD) of the payment made by Australia’s Department of Employment and Workplace Relations for a report that was full of artificial intelligence-generated errors, a department spokesperson said Tuesday.

The department’s contract with Deloitte, which was executed in December 2024, was originally valued at about A$440,000, according to a notice published on AusTender, the Australian government's procurement information system.

The event should serve as a wake-up call for the corporate finance world, experts previously told CFO Dive.

“Accounting firms need to not only train staff on how to use AI effectively, but they must also train them on ethical use and maintaining quality control, while still emphasizing the AI output must be reviewed as if it were prepared by an intern or new hire,” Jack Castonguay, an associate professor of accounting at Hofstra University, said in an email.

A revised version of Deloitte Australia’s report for the DEWR was published this month after revelations that the original document contained errors, including a fabricated quote from a federal court judgment and references to nonexistent academic research papers, according to the Associated Press.

The document reviewed the information technology system used by the department to automate penalties in Australia’s welfare system.

“Deloitte conducted the independent assurance review and has confirmed some footnotes and references were incorrect,” DEWR’s spokesperson previously told CFO Dive, adding that “the substance” of the review has been retained.