Deloitte caught out by AI in $290,000 report to help Australian government crackdown on welfare after researcher reports hallucinations

The report was originally published on the Australian Government’s Department of Employment and Workplace Relations website in July. A revised version was quietly released on Friday after University of Sydney research fellow Chris Rudge said he had alerted the media that the report was “full of fabricated references”.

Deloitte reviewed the 237-page report and “confirmed that certain footnotes and references were incorrect,” the ministry said in a statement Tuesday.

Deloitte did not immediately respond to Fortunerequest for comment.

The revised version of the report includes a disclosure that a generative AI language system, Azure Openai, was used in its creation. It also removes fabricated quotes attributed to a Federal Court judge and references non-existent reports attributed to legal and software engineering experts. Deloitte noted in a “Report Update” section that the updated version, dated September 26, replaced the report released in July.

“The updates made do not impact or affect the substantive content, findings and recommendations of the report,” Deloitte wrote.

At the end of August, the Australian Financial Review initially indicated that the document contained several errors, citing Rudge as the researcher who identified the apparent inaccuracies generated by the AI.

Rudge discovered the errors in the report when he read part falsely stating Lisa Burton Crawford, a University of Sydney professor of public and constitutional law, had authored a non-existent book with a title outside her area of ​​expertise.

“I instantly knew he was hallucinating AI or the world’s best kept secret because I had never heard of the book and it seemed absurd,” Rudge said The Associated Press Tuesday.

The Big Four consulting firms and global management firms such as McKinsey have invested hundreds of millions of dollars in AI initiatives to develop proprietary models and increase efficiency. In September, Deloitte said it would invest $3 billion in generative AI development in fiscal 2030.

Anthropic also announced a Deloitte partnership on Monday that includes making Claude available to more than 470,000 Deloitte professionals.

In June, the UK Financial Reporting Council, an accounting regulator, warned that the Big Four firms were not lacking in how AI and automated technologies have affected the quality of their audits.

Although the company will repay its final payment installment to the Australian government, Senator Barbara Pocock, the Australian Greens party’s public sector spokesperson, said Deloitte would have to repay the $290,000.

Deloitte “misused AI and used it very inappropriately: misquoted a judge, used non-existent references,” Pocock told Australian Broadcasting Corp. “I mean, the kind of thing a first-year university student would be in trouble for from DeLoitte Australia.” THEAssociated Press.

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