It has been an imperative for accountants to keep up with the technological advancements in the market, and understanding artificial intelligence now raises key challenges for finance professionals.
This is the findings of the Association of Chartered Certified Accountants in a recent report, revealing that accounting professionals are posed with three hurdles: identifying and managing AI risk as a user in any role, supporting a collaborative approach to risk management, and helping to understand and prepare for regulatory compliance.
According to the ACCA, organisations and governments are currently grappling to better understand the risks and unintended consequences posed by AI amid an advancing need to navigate between the hype and its genuine advantages.
AI risks are diffuse, meaning a collaborative approach to risk management is ever-more vital. ACCA says it is not surprising that the global regulatory landscape is also rapidly evolving, with over 300 laws and regulations in development across the world.
Further, according to ACCA, AI presents a couple of significant opportunities for organisations: to reconsider the unique values of their human talent and understand how to retain and nurture this; and to examine their decision-making processes and assess their effectiveness and readiness for adoption.
Without thinking deeply about these elements, ACCA says organisations could threaten their organisational culture, talent retention, or increase the possibility of errors – causing reputational or financial damage.
For ACCA, accounting professionals are uniquely positioned to contribute to harnessing AI's potential while maintaining robust safeguards through their expertise in controls, data analysis, and business impact assessment.
The financial perspective of accountants can help organisations prioritise risk management efforts, although the accountant's role in AI risk management extends beyond traditional financial controls.
According to ACCA, the profession is not only needed but expected to weigh and inform the risks and opportunities – the ‘perils and promises’ of AI. This requires not only communicating how we facilitate good scenarios and prevent bad scenarios, but also distilling how AI is being used across the three lines.
