Deloitte’s Australian branch will return part of the payment for a $290,000 report that reportedly contained errors generated by AI. These issues included references to fake academic papers and a made-up quote from a court ruling.
The report was first released on the website of Australia’s Department of Employment and Workplace Relations in July.
After concerns were raised by Chris Rudge, a researcher from Sydney University, a corrected version was published quietly on Friday. Rudge pointed out that the report was filled with false references.
After reviewing the 237-page document, Deloitte confirmed that some of the footnotes and references were indeed incorrect, according to a statement from the department.
Deloitte has not yet replied to inquiries from Fortune regarding this matter.
The updated report now includes a note stating that it was created using a generative AI language system called Azure OpenAI.
It also removes the incorrect quotes attributed to a judge and eliminates references to non-existent studies by experts in law and software engineering.
Deloitte mentioned in a “Report Update” section that the revised version, dated September 26, replaced the original report published in July.
Deloitte emphasized that the changes made do not alter the main content, findings, or recommendations of the report.
In late August, the Australian Financial Review first highlighted the report’s errors, citing Rudge as the researcher who found the apparent inaccuracies generated by AI.
Rudge noticed the mistakes when he came across a section incorrectly stating that Lisa Burton Crawford, a professor at Sydney University, had written a book that didn’t exist and was unrelated to her area of expertise.
“I immediately thought it must be either created by AI or an incredibly well-kept secret, as I had never heard of that book and it sounded absurd,” Rudge told The Associated Press on Tuesday.
Major consulting firms like Deloitte and McKinsey have poured hundreds of millions into AI projects aimed at developing unique models and improving efficiency.
In September, Deloitte announced plans to invest $3 billion in generative AI development through the fiscal year 2030.
On Monday, Anthropic also revealed a partnership with Deloitte that will provide access to its AI model, Claude, for over 470,000 Deloitte employees.
In June, the UK Financial Reporting Council, which oversees accounting practices, warned that the Big Four firms were not adequately monitoring how AI and automated systems impacted the quality of their audits.
Although Deloitte will refund its final payment to the Australian government, Senator Barbara Pocock, representing the Australian Greens party, stated that the firm should return the full $290,000.
Pocock criticized Deloitte for misusing AI, pointing out that they misquoted a judge and referenced non-existent materials.
“These are mistakes that would get a first-year university student in serious trouble,” she told the Australian Broadcasting Corporation.
A spokesperson for Deloitte Australia mentioned that the issue has been resolved directly with the client.
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