What's Happening?
A recent webcast hosted by Grant Thornton highlighted the importance of distinguishing between functional and technical risks associated with artificial intelligence (AI) in the business world. Vikrant Rai, managing director of risk advisory, and Alex
Hinkebein, senior manager for risk advisory, emphasized that AI adoption has introduced both new and adapted risks. They pointed out several AI failures, such as deepfake impersonations and AI legal briefs with fabricated cases, underscoring the need for robust controls. The webcast also noted that 38 states have enacted laws regulating AI, focusing on responsible practices. Frameworks like the NIST AI RMF and ISO 42001 were discussed as tools to manage AI risks effectively.
Why It's Important?
The rapid adoption of AI technologies presents significant challenges for organizations, particularly in managing risks that traditional governance methods may not adequately address. The webcast stressed the importance of integrating AI risk into broader risk frameworks to ensure all stakeholders are aware of potential threats. This is crucial as AI systems increasingly influence decision-making processes, potentially impacting business operations and public trust. By understanding both functional and technical risks, organizations can better safeguard against issues like model bias and unauthorized access, ultimately protecting their reputation and financial stability.
What's Next?
Organizations are encouraged to tailor AI governance frameworks to their specific needs, balancing innovation with appropriate risk management. As AI technologies continue to evolve, businesses must remain vigilant in updating their risk management strategies to address emerging threats. Internal auditors are positioned to play a key role in this process, providing independent perspectives that can help navigate the complexities of AI governance. Ongoing education and adaptation will be essential as new regulations and standards are developed to keep pace with technological advancements.
