Now that AI is an inseparable part of the workforce, it’s important for controllers to understand the impact of AI on their organization. AI is sneaking into organizations at an increasing rate. Employees are using ChatGPT, Bing Chat, Microsoft Copilot, and more to streamline personal workflow while nearly every software is releasing AI-powered features.
As a controller, there’s an inherent duty to ensure AI is utilized ethically, accurately, and in line with company objectives. The following is a guide for doing just that:
How Will AI Help Finance & Accounting?
AI has great potential—it just needs to be harnessed in the right ways. AI is already helping organizations in some of the ways listed below. With AI, Finance and Accounting organizations are saving time and money, freeing up employees to spend more time on activities that add value.
- Efficiency & Automation: AI can automate routine accounting tasks, reducing manual efforts and errors, which leads to more efficient processes.
- Data Analysis: AI-enhanced data analytics capabilities will help controllers derive insights from vast amounts of financial data, detect patterns, and make more informed decisions.
- Fraud Detection: AI-driven systems can identify anomalies in financial transactions, helping in early detection of fraud or discrepancies that might go unnoticed in manual reviews.
- Forecasting: AI can enhance the accuracy of financial forecasts by analyzing multiple variables and market conditions, aiding in better budgeting and planning.
- Asset Management: AI can optimize asset utilization and monitor asset performance, crucial for protecting a company's resources.
- Competitive Advantage: Adopting AI in financial functions can give companies an edge over competitors in terms of speed, accuracy, and strategic decision-making.
- Regulatory Compliance: AI tools can help ensure financial operations comply with ever-evolving regulations, reducing risks of non-compliance penalties.
- Cost Savings: By automating processes and reducing errors, AI can lead to cost savings in the long run.
Awesome, but…
There are still issues with AI that prevent controllers from fully relying on it. Controllers must understand the potential pitfalls and how they might affect the business in order to stay compliant.
- Bias Issues: If data used to train AI models contains biases, the AI system can perpetuate or amplify these biases.
- Loss of Privacy: Information shared with most AI tools ends up in the public domain.
- Job Displacement: Automation through AI could render certain jobs obsolete.
- Security Concerns: AI systems can be used to create malicious deepfakes that are difficult to detect.
- Ethical Concerns: AI may be used to make recommendations or decisions in sensitive areas like healthcare or criminal justice.
- Dependency: Over-reliance on AI systems can reduce human skill levels and lead to an inability to perform tasks without technological assistance.
- Transparency & Accountability Issues: Many advanced AI models, especially deep learning models, act as "black boxes," making it hard to understand how they arrive at specific decisions, which complicates accountability.
- Safety Concerns: In areas like autonomous driving or robotics, AI malfunctions could have direct safety implications.
- Existential Risks: A superintelligent AI could act in ways that are harmful to humanity if not properly aligned with human values.
It’s All About Protecting the Company
AI is powerful and can be useful, but it’s not infallible. The information and answers it provides are not always 100% accurate. For the controller, this is especially important when dealing with sensitive information, regulations, and finances in general.
It’s the controller’s responsibility to implement and monitor internal controls to ensure the integrity of an organization’s financial transactions and reporting, safeguard reporting, protect company assets, and ensure compliance. The controller should work with IT and Business to accomplish the following:
- Understand AI Basics: Gain a foundational grasp of AI's capabilities and limitations.
- Set Clear Objectives: Determine the specific goals and intended outcomes of AI integration.
- Establish Governance: Create a governance framework with policies and guidelines for AI usage.
- Perform Risk Assessments: Evaluate potential pitfalls, inaccuracies, or vulnerabilities introduced by AI.
- Ensure Data Integrity: Prioritize the quality of data used to train and inform AI models.
- Monitor Compliance: Stay updated with relevant regulations and ensure AI systems are compliant.
- Provide Training: Equip teams with knowledge and skills to effectively use and manage AI tools.
- Implement Regular Audits: Set up periodic checks on AI performance, outcomes, and ethical considerations.
- Maintain Collaboration: Foster a strong relationship with IT and other departments for secure and effective AI deployment.
- Plan for Contingencies: Have backup processes in case AI systems malfunction or produce unintended results.
Bottom Line
AI is here and it’s not going away. Leveraging AI's capabilities can drive innovation, optimize operations, and create competitive advantages—but discretion is crucial. Controllers have a responsibility to oversee how AI is used. By responsibly integrating AI, controllers can transcend traditional roles, becoming strategic executives guiding the company's future.
At Trenegy, we have been on the forefront of helping companies evaluate and use Artificial Intelligence (AI) to create efficiencies within Finance, Accounting, and Operations. To chat with our team, reach out to us at info@trenegy.com.
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