SEC Cautions Companies on Risks AI Poses to Financial Reporting

AI-based financial reporting introduces new risks, and the SEC is monitoring how US companies and their auditors are using the emerging tech.

Risk assessments and the ability to retrace the steps of new artificial intelligence algorithms will be key safeguards to address potential vulnerabilities as companies and their auditors adopt the emerging tech for their financial reporting, Anita Doutt, acting deputy chief accountant for professional practice at the Securities and Exchange Commission, said Tuesday at an American Law Institute conference.

The largest US audit firms have invested billions to bake AI into their daily work, including tools for ...