Unless you’ve been hibernating these last few weeks, you’ll all have heard about the recent headlong rush to get AI chatbots out there for all of us to play with. So far, the most prominent ones are ChatGPT (OpenAI/ Microsoft) and Bard (Google), and image creators such as Dall-E, Starry AI and Jasper, to name but a few.
This rush to get AI out to the masses has prompted some well-known tech leaders, including Elon Musk, to urge for a six-month moratorium on AI training to try to slow down this rush to ‘be the best’. AI training is the way that these systems ‘learn’ and which is something of increasing concern amongst nerdy auditors like me. Who gets to train these systems and, thus, influence how they react to text prompts in terms of the answers (and images) they produce?
When I asked Bard (Google) to write me an essay about the benefits of internal audit, its response was “I’m not programmed to assist with that”. ChatGPT was more forthcoming and I have included its response below.
Various governments have started to introduce white papers on this subject. The UK government is one of them, but they are looking to implement a much lighter touch regime for the moment. The consultation on the white paper closes on 21st June.
There have already been some news stories on how AI will replace jobs. Is this just attention grabbing headlines? Possibly, but as with all things, the truth is probably more complicated.
A recent panel hosted by the BCS on Bias in AI raised some more fundamental questions such as risks from plagiarism and how this can be detected. Importantly the panel (Dr Blay Whiby, Dr Julie Weeds, Professor Martin White) also suggested that whilst AI and ML has been around for many years, it is only with recent advances in computer power that real time interactions have been possible. This also comes with a warning that whilst currently free to use, ultimately it consumes large amounts of power and this will lead to charges. There is a question on whether “free” is actually free? How do you know that the AI isn’t feeding you a “sponsored” answer? How can we get assurance that the corporation hosting it has not influenced the outcomes? What happens if miscreants poison the learning model data? All against a backdrop of concerns on data privacy, governance and compliance with the Data Protection Act…
ChatGPT gave us this response on the purpose of Internal Audit:
Internal audit is an essential function of any organization, whether it is a small business or a large multinational corporation. Internal audit involves an independent, objective evaluation of an organization’s operations, systems, and controls. The objective of an internal audit is to provide assurance to the organization’s management that its operations are efficient, effective, and in compliance with applicable laws, regulations, and internal policies.
The benefits of internal audit are numerous and can have a significant impact on an organization’s success. In this essay, I will explore some of the key benefits of internal audit.
First and foremost, internal audit helps to identify and mitigate risks. An internal audit can help identify potential risks to an organization’s operations and systems, such as fraud, errors, and inefficiencies. By identifying these risks early, an organization can take proactive steps to mitigate them, reducing the likelihood of financial loss, reputational damage, and other negative consequences. By implementing effective risk management strategies, an organization can protect its assets, reputation, and stakeholders.
Secondly, internal audit helps to improve operational efficiency. Through a comprehensive review of an organization’s operations, systems, and controls, an internal audit can identify areas for improvement and make recommendations for streamlining processes, reducing costs, and increasing productivity. By implementing these recommendations, an organization can operate more efficiently, reducing waste, and improving its bottom line.
Thirdly, internal audit provides assurance to stakeholders. Stakeholders, including investors, regulators, and customers, rely on the integrity of an organization’s operations and financial statements. Internal audit provides assurance that an organization’s operations are in compliance with applicable laws and regulations and that its financial statements are accurate and reliable. This assurance can help build trust and confidence in the organization and its leadership.
Fourthly, internal audit helps to enhance governance and accountability. Internal audit provides an independent assessment of an organization’s operations, systems, and controls, which helps to ensure that management is accountable for its actions. By holding management accountable, internal audit can help promote a culture of transparency, integrity, and ethical behavior throughout the organization.
Finally, internal audit can help improve decision-making. By providing objective and independent analysis of an organization’s operations, systems, and controls, internal audit can help management make more informed decisions. This analysis can provide insights into areas where an organization is performing well and where it needs to improve, helping management to allocate resources more effectively and make more informed strategic decisions.
In conclusion, internal audit is a critical function for any organization. By identifying and mitigating risks, improving operational efficiency, providing assurance to stakeholders, enhancing governance and accountability, and improving decision-making, internal audit can help organizations achieve their goals and objectives. As such, organizations should invest in internal audit as a strategic tool for improving their overall performance and achieving long-term success.
By Paul Kamminga, Digital and Cyber Assurance Specialist at TIAA
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