17 October, 2025

Deloitte Australia is issuing a partial refund to the Australian government after a £200,000 report it produced was found to contain multiple errors and incorrect citations, including non-existent academic research and made-up court cases. 

The errors appear to be the result of AI “hallucinations”:  when generative systems confidently produce information that sounds right or fills gaps but critically isn’t real. It’s a risk that grows as these tools become more sophisticated, and a reminder of the continued importance of human judgement. 

It’s worth noting that the report has since been corrected to include verified sources, though its recommendations remain unchanged. However, the case has raised bigger questions. The Guardian quotes Labour Senator Deborah O’Neill, a member of Australia’s Senate inquiry into the integrity of consulting firms, who suggests that clients should verify that AI is not used to produce work. 

In our view, that’s the wrong fight to pick. Poor work containing errors has always been unacceptable, and that hasn’t changed. What has changed is that AI increases the risk and demands even greater diligence. AI can help us work faster, think more creatively and uncover insights, but it can also amplify mistakes if not handled carefully. We use AI at Good Business. In fact, it even helped write this story. But it’s just that: a tool. A powerful one that, when used well, can make our work sharper and more valuable for clients – quality, accuracy and accountability still rest with us. 

By Budd Nicholson