A report by ACCA stated that chief executive officers (CEOs) and chief financial officers (CFOs) need to build trust in artificial intelligence (AI) by taking steps in their organisations to manage the associated risks.
As AI plays a greater role in businesses’ accounting and financial reporting, CFOs and financial controllers must be confident about the adequacy of their oversight and controls of AI systems.
Fazeela Gopalani, Head of Eurasia and Middle East, ACCA, said: “AI presents many opportunities to businesses such as providing more insights from a wider array of information sources, driving greater efficiency and better customer experiences. But it also poses a challenge to trust in accounting and finance reporting with new dynamics being introduced to the traditional trust mechanisms that underpin corporate accounting.”
AI monitor: trust highlights some of the risks of AI in accounting systems, such as:
- Impacting decision-making without clearly explaining the rationale of the forecast or recommendation;
- An over-dependence on AI procedures in auditing and assurance and a decline in the use of human intervention and judgment;
- Concern over AI bias or error in fraud detection, risk assessment, and compliance monitoring;
- Over relying on AI-powered virtual assistants which give inaccurate or inappropriate responses.
Alistair Brisbourne, Head of Technology Research, ACCA, added, “Introducing AI is both about trust in the systems and the people that we work with, and how we combine those two elements. CEOs and CFOs need to focus on making the changes needed to harness the many potential opportunities but also retain trust. This includes upskilling to deal with the technology and introducing new knowledge into their organisations. They must also focus on the governance, oversight and culture required to allow different teams to work together effectively. It’s about bringing change management and governance together.”
In the first in a series of insights, AI monitor: trust, ACCA (the Association of Chartered Certified Accountants) urges finance professionals to ensure that AI governance and AI risk management is in place, beginning with:
- Investing in AI literacy and skills development: finance professionals must invest in education and training to critically evaluate AI outputs, communicate clearly with key stakeholders, and make informed decisions.
- Collaborating via cross-functional teams: finance professionals should actively engage with IT, data science, legal and risk management teams.
- Developing an AI governance framework: beginning with critical uses, finance professionals should take steps within their organisation to establish clear policies, oversight, and governance practices.
Brisbourne said: ‘In the AI era, the role of finance professionals is to focus on the outcomes driven by technology. The value lies in understanding how these outputs inform decisions and actions that drive business outcomes.’
In 2024, the ‘AI Monitor series will explore talent, risk and controls, the relevance of effective data strategy, and sustainability applications.
