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Liz Sandwith CFIIA, and Ryan Buckner AI is being embedded within the audit community, as demonstrated by the active development of audit tools by the Big 4 audit firms. How will auditors, audit platforms, and AI shape up to the issues that AI and audit tools create, such as hallucinations and bias?
Hallucinations are a very real threat to the audit process, and with the significant issues that poor audits and assurance create, or as recent issues with Delve appear to have demonstrated. The use of AI in the audit process has to be taken with a softly, softly approach. As the impact of poor audit quality affects legal and regulatory compliance, that in turn comes with both regulator and regulatory penalties for auditor and auditee alike.
The pace of change suggests real benefits to audit quality are around the corner, but as anyone on the reading end of a ChatGPT hallucination knows, AI also creates a new class of things that can go wrong. Audit failures can cost investors billions. So an urgent question presents itself: are regulators keeping up?
The UK regulator, the Financial Reporting Council (FRC) has already spoken. The FRC recently released Guidance on the use of AI by the audit profession. Making it clear that the audit profession is accountable for the use of AI.
https://lnkd.in/ed793x6g
AI is a powerful tool, and if managed correctly, it can deliver cyber assurance, reducing the time auditors take to evaluate control design and control effectiveness across complex data sets. But, it’s only useful if it assures compliance while managing hallucinations and complements the auditor and audit process, which is critical when one uses AI to assure cybersecurity regulatory compliance required for regulations such as NIS2, NYDFS, SEC, DORA, and more.
@Parava Security Solutions Faisal Khan
#ai #cyberassurance #regulatorycompliance
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