Objective:
To establish a regulatory framework governing the use of augmented intelligence (AI) in the formulation, review, and implementation of accounting policies, ensuring that such technologies enhance decision-making without compromising accountability, transparency, or ethical standards.
1. Scope and Applicability
- Applies to all accounting entities, including public, private, and governmental organizations, that employ augmented intelligence systems in policy development, interpretation, or advisory processes.
- Covers AI tools used for:
- Policy drafting and recommendation.
- Regulatory compliance analysis.
- Risk and scenario modeling.
- Decision support in financial reporting and accounting standards application.
2. Governance Requirements
- Organizations must maintain a governance framework for AI integration in accounting policy development, including:
- Oversight by a qualified board or committee with expertise in accounting, technology, and ethics.
- Clear delineation of human accountability for policy decisions informed or generated by AI.
- Regular review and validation of AI recommendations against established accounting standards and regulatory requirements.
3. Transparency and Explainability
- AI systems must provide explainable outputs; policy recommendations must include:
- The data sources and assumptions used.
- A rationale for conclusions and suggested policy actions.
- Documentation sufficient for independent review by auditors or regulators.
4. Data Quality and Integrity
- Augmented intelligence must be trained on accurate, complete, and up-to-date datasets.
- Entities must implement controls to:
- Detect and correct errors or biases in AI-generated insights.
- Ensure alignment with relevant accounting standards (e.g., IFRS, GAAP) and jurisdictional regulations.
- Maintain audit trails for all AI-assisted policy decisions.
5. Ethical and Risk Considerations
- Organizations must assess ethical, operational, and reputational risks associated with AI-driven policy development, including:
- Bias or discrimination embedded in AI recommendations.
- Overreliance on AI outputs without human validation.
- Conflicts of interest arising from automated recommendations.
6. Audit and Compliance
- Regular audit procedures must verify that AI-assisted policy decisions:
- Comply with regulatory and professional standards.
- Are traceable to responsible decision-makers.
- Reflect proper use of augmented intelligence without bypassing human oversight.
- Non-compliance must be reported to the regulatory authority, with remedial actions clearly defined.
7. Continuous Monitoring and Improvement
- Entities must establish mechanisms for ongoing evaluation of AI systems, including:
- Monitoring AI performance and accuracy in policy development.
- Updating AI models as accounting standards or regulations evolve.
- Incorporating stakeholder feedback, including auditors and regulators.
8. Regulatory Oversight
- Neftaly will:
- Issue guidelines for the safe and effective deployment of AI in accounting policy development.
- Conduct inspections and audits to ensure compliance.
- Maintain a registry of approved AI tools and methodologies for policy advisory use.
Summary:
The regulation balances innovation with accountability, ensuring that augmented intelligence enhances policy development while maintaining human oversight, ethical integrity, and regulatory compliance.