Tag: audit committee oversight of AI risks

Center for Audit Quality comes to the rescue for audit committees tasked with AI oversight

In this 2023 article in Fortune, a survey of 2,800 managers and executives conducted by management consulting firm Aon showed that business leaders “weren’t very concerned about AI….Not only is AI not the top risk that they cited for their companies, it didn’t even make the top 20.  AI ranked as the 49th biggest threat for businesses.” Has “the threat of AI been overhyped,” Aon asked, or could it be that the “survey participants might be getting it wrong”? If they were, it wasn’t for long. Fast forward less than a year, and another Fortune article, citing a report from research firm Arize AI, revealed that 281 of the Fortune 500 companies cited AI as a risk, representing “56.2% of the companies and a 473.5% increase from the prior year, when just 49 companies flagged AI risks. ‘If annual reports of the Fortune 500 make one thing clear, it’s that the impact of generative AI is being felt across a wide array of industries—even those not yet embracing the technology,’ the report said.”  This widespread recognition of the potential risks of genAI will likely compel companies to focus their attention on risk oversight, and that will almost certainly entail oversight by the audit committee.  To assist audit committees in that process, the Center for Audit Quality has released a new resource—an excellent new report, Audit Committee Oversight in the Age of Generative AI.