August 2020
Beginner
344 pages
10h 23m
English
Content preview from 97 Things About Ethics Everyone in Data Science Should Know
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Chapter 97. Ethics, AI, and the Audit Function in Financial Reporting
Steven Mintz
AI broadly refers to technologies that make machines “smart.” AI has unleashed many practical applications that can enhance the decision-making process. AI is powered by algorithms, and algorithms are driven by large amounts of data.
The ethical questions in an AI system are: (1) is the data reliable? (2) can we trust that the data provides the information needed for managerial decision making? (3) how can auditors evaluate the data provided by the system?
In September 2019, Genesys released a research report that said 21% of employees surveyed had expressed a concern that their companies could use AI in an unethical manner. Therefore, an independent audit is essential to conclude that the data presents fairly the financial information and results of operation that are crucial to assessing the performance of an organization.
Without a reliable audit, it is virtually impossible to conclude that the data produced by AI systems can be relied on by the users of financial statements, the key ingredient in placing our trust in that data. In other words, the data must report what it is supposed to report and be unbiased.
Auditing is an essential function for organizations, but much of it is routine. The examination of financial statement information lends itself ...