Accounting firm Ernst & Young (EY) has retracted a recent study after it was flagged for AI-generated hallucinations, including fake footnotes.
The study on loyalty rewards programmes was published by EY consultants in Canada to market their cybersecurity business. However, the report provided made-up data points, misattributed citations, and even cited a McKinsey report that does not exist, researchers at AI detection startup GPT-Zero found.
In response, the accounting firm has removed the report from its website and has said that it is “reviewing the circumstances that led to this article’s publication.” The study was not connected to projects for any EY client, the company clarified.
The incident is the latest example of a professional services firm being led astray by AI. It also comes at a time when consulting firms are ramping up AI adoption internally by training staff to use AI tools while promoting their AI deployment services to clients as well.
In October 2025, EY said that its AI- revenue had grown 30 per cent in the previous year and 15,000 staff had worked on client projects “ranging from delivering enterprise-wide transformations to AI governance frameworks that help drive the responsible implementation of AI.”
“Publishing a report online is essentially a form of data injection into the pool of knowledge that is the internet,” GPTZero researchers Om Ogale, Paul Esau and Alex Cui wrote in a blog post published on Thursday, May 14.
“When the report includes fake information (either vibed citations or false claims) it can ‘poison the well’ by misleading future researchers, especially if the report is published by a well-known consulting firm and hosted on a high-traffic website,” they added.
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“EY Canada takes the accuracy of all the content we publish seriously, and we have an organisation-wide commitment to the responsible use of AI,” EY said.
Hallucinations continue to be a key barrier to enterprise adoption of AIand EY is not the only company to have run into problems because of it. For instance, another big four consultancy firm, Deloitte, was forced to correct a report for a Canadian provincial government in 2025 after it was revealed to contain fake academic citations.
In April this year, law firm Sullivan & Cromwell apologised to a New York court because a filing in a high-profile case repeatedly misquoted the US bankruptcy code and cited cases incorrectly.
