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Deloitte Scandal: The $440,000 AI-Generated Report Sparks Debate Over Professional Responsibility

Deloitte Australia is facing a serious scandal after it was revealed that a 237-page report prepared for the federal government, and valued at $440,000, contained serious errors stemming from the use of artificial intelligence. Among the irregularities detected were fabricated academic references, non-existent footnotes, and even a false quotation attributed to a Federal Court judge. The fact that the consultancy firm failed to explicitly disclose the use of generative models in preparing the document worsens the situation, as it undermines transparency and the client’s trust in the contracted professional service.

From a legal standpoint, the case raises significant questions: Is there a breach of contract due to a defect in the performance of the service? Could professional civil liability arise from negligence, for failing to adequately verify the accuracy of the material delivered? Furthermore, the episode reopens the debate on the duties of diligence and loyalty owed by large firms and consultancies when they use AI tools—especially if the client has not been informed of their use.

Although Deloitte has proceeded to refund part of the fee received and insists that the report’s recommendations remain unaffected, the controversy has called into question the quality standards required in public consulting contracts. At the same time, political and social scrutiny of the sector is intensifying, which could lead to new regulatory demands obliging the disclosure of AI use in the preparation of reports and opinions.