The AICPA released a practice guide to help auditors apply current standards to the use of artificial intelligence in financial reporting and audits. The guide explains how an entity's reliance on AI affects acceptance decisions, risk assessment, and the understanding of internal controls. It highlights specific risks such as model drift, data governance issues, and AI-enabled fraud schemes. Auditors are advised to evaluate the level of human involvement in AI processes and to understand the specific mechanisms underlying AI-operated controls. The AICPA stated that this initial aid will be expanded with additional guidance in the future.
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