KPMG Partner Fined $7,000 for Using AI to Cheat on Firm's AI Training Exam
A senior partner at KPMG Australia was caught using artificial intelligence to answer questions on an internal AI training exam, prompting the firm to impose a $7,000 fine and force a retake of the test, according to a report in the Australian Financial Review over the weekend.
The incident, while seemingly minor, arrives at an awkward moment for the Big Four accounting firm. KPMG recently negotiated discounted fees from its own external auditor on the grounds that AI will make auditing cheaper—a position Bloomberg columnist Matt Levine described as "not a crazy thing for most companies to think...but a crazy thing for an auditing firm to say to its auditor."
The irony cuts deeper for finance chiefs who rely on KPMG's audits. The firm audits numerous Fortune 500 companies, and its pitch to clients increasingly emphasizes AI-driven efficiency gains. Yet the partner's decision to deploy AI on an exam designed to test AI competency raises questions about whether the firm's professionals actually understand the technology they're selling.
KPMG Australia disclosed that it has caught more than two dozen employees using AI to cheat on internal tests since July, suggesting the partner incident represents a broader pattern rather than an isolated lapse in judgment. The firm has not identified the partner or clarified what specific AI tools were used to complete the exam.
The cheating scandal adds to mounting concerns about improper AI use across Australia's accounting sector. Last fall, Deloitte—another Big Four firm—partially refunded the Australian government after delivering a report filled with AI-generated errors. The back-to-back incidents have intensified scrutiny of how accounting firms are deploying AI tools in client work, particularly in high-stakes auditing and advisory engagements where accuracy is paramount.
For CFOs and audit committees, the KPMG case presents an uncomfortable question: if a firm's own partners can't be trusted to honestly assess their AI knowledge, how should clients evaluate the firm's AI-enhanced audit work? The $7,000 fine—roughly equivalent to a rounding error in a partner's annual compensation—may do little to reassure clients that the firm is taking the issue seriously.
The timing is particularly sensitive as accounting firms face pressure to justify fee increases while simultaneously promising that AI will reduce audit costs. KPMG's argument to its own auditor that AI should lower fees creates a precedent that clients are likely to invoke in their own fee negotiations. Whether the firm can maintain pricing power while its partners are caught cutting corners on AI training remains an open question.
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