TheCorporateCounsel.net

I do not think that I am guilty of “AI washing” by stating that the generative AI revolution is most certainly going to change the landscape for the service providers who work with public companies, including lawyers and accountants.

The CAQ recently issued a report titled “Auditing in the Age of Generative AI“, which “explores some fundamental principles of genAI, new risks arising from its use in processes relevant to financial reporting (financial reporting processes) or internal control over financial reporting (ICFR), and related audit implications.” The report provides:

– An overview of generative AI technology;
– A description of the current regulatory environment;
– Audit considerations for companies deploying generative AI; and
– Example use cases

The CAQ report concludes:

The use of genAI in financial reporting processes or ICFR by companies introduces new risk considerations for auditors. It is important for auditors to be mindful of the risks and challenges that can arise from a company using genAI. Auditors are well-suited to apply and build on their expertise in identifying and assessing risks, exercising professional skepticism, and developing appropriate audit responses.

While generative AI offers significant benefits for the disclosure and financial reporting process, there is no doubt that lawyers and auditors will need to adapt their approach to address the unique risks and considerations presented by the use of generative AI.

– Dave Lynn