​​​The Use of AI in Business​​​

Internal Auditor’s latest winning schola​rship essay discusses issues internal auditors should keep in mind with regard to the organization’s use of artificial intelligence​​​.​

Comments Views

​We are living in an era where we can’t imagine our lives without any technology in it, as it dramatically eases the way we deal with everyday issues. Day by day we are witnessing how fast technology advances, and the idea of a technology having its own intelligence, which once could sound fictional, has now become a reality.

First introduced in 1950, in 2018 artificial intelligence (AI) has already stepped into a whole new level of being intelligent. But even though the benefits of AI are substantial, the risks it can cause is the topic that humanity must worry about the most.

When examining AI in businesses, these are the main seven points that internal auditors must be aware of:

  • Privacy of Information — big data is being collected, including personal information of individuals, which auditors must make sure will be kept private.
  • Governance — correct management and monitoring of AI’s activities toward accomplishing the organizational objectives.
  • Unemployment — by introduction and advancement of AI, people, doing simple jobs like driving a car, are being replaced by self-driving cars with AI.
  • Data Quality — whether the actual data, on which AI algorithms are written, are reliable, accurate, and complete.
  • Black Box Factor — two AIs become so intelligent​ that they start communicating with each other in their own language, making the process less transparent.
  • Ethics — controlling negative consequences, as by evolution of AIs, we are losing human values.
  • Human Factor — the performance of AI is dependent on the programmer, who wrote the algorithm, in which case human errors and biases are inevitable.

On the one hand, all these seven issues are equally essential, and if not audited correctly by internal auditors, can cause problems. But what does it mean to audit “correctly”?

Internal auditors are the ones responsible for providing assurance on the organization’s governance, effectiveness of operations, and risk management, but “The existence of risk is not the primary reason of concern, rather auditors must determine if the risks are warranted.” They must make sure that the risk is understandable and controllable, which means that all our seven issues on the other hand can be combined and controlled by correct risk management.

But one of the seven issues, Human Factor, is the riskiest and hardest to be controlled, as even though AI is just a machine with its own intelligence, that intelligence has been initially created by a human, over whom having a full control is hard to achieve. Intentionally or unintentionally, an AI can be programmed for personal benefit.

Understanding a human being and trying to find the right ways to control his or her actions is the key to success for internal auditors, as behind the initial creation of that intelligence there is always standing a human.


GPI, (2017) “Artificial Intelligence — Considerations for the Profession of Internal Auditing.” Retrieved from:
https://na.theiia.org/periodic​als/Public Documents/GPI-Artificial-Intelligence.pdf​

McCollum, Tim (2017) “Audit in an Age of Intelligent Machines.” Retrieved from:

Portman, Brian (2013) “Perspectives on Risk Assessment,” Page 6. Retrieved from:

Internal Auditor is pleased to provide you an opportunity to share your thoughts about the articles posted on this site. Some comments may be reprinted elsewhere, online or offline. We encourage lively, open discussion and only ask that you refrain from personal comments and remarks that are off topic. Internal Auditor reserves the right to remove comments.

Comment on this article

comments powered by Disqus
  • AuditBoard_Pandemic_May 2020_Premium 1_
  • Galvanize_May 2020_Premium 2
  • IIA CERT-Online Proctering_May 2020_Premium 3