When my bank texts me to ask whether I have just made an outlandish purchase, I am grateful for AI. Thanks to AI, my bank knows enough about my purchase patterns to quickly identify fraud with great accuracy. In the AI debate, the capability of identifying fraud is a net win for AI. Yet, it is ironic that this same technology can be deployed to engage in fraud i.e. the college student who uses ChatGPT to write their thesis or the deep fake photo used for blackmail. This is the nefarious side of AI and cited by AI doomsayers as the reason we should not use it.
Accounting and finance professionals who work closely with AI should be well acquainted with the pros and cons of using AI. On the plus side of the equation, AI has eliminated many tiresome manual tasks and provided more room for strategic thinking and value-add activities. On the negative side, AI can be biased and flawed depending on the quality of datasets and algorithms. This can affect everything from credit scores to job hiring.
As professionals on the frontlines of AI deployment, management accountants must understand how to apply an ethical framework to decisions around AI. In a recent Strategic Finance article, Dan Butcher, IMA’s finance editor and staff liaison to IMA’s Committee on Ethics, elaborates on how ethical principles apply to AI. Citing the work of the International Ethics Standards Board for Accountants (IESBA), specifically, the recent technology-related revisions to its Code of Ethics, Butcher writes, “The ethics problems that accounting and finance professionals have been grappling with in classical approaches to accountancy are often exacerbated when technology is added to the equation. Regardless, universal ethical principles and standards still apply.”
Professional skepticism and critical thinking are some of the most important competencies management accountants have to prevent ethics breaches when using AI. But as the technology grows more complex and sophisticated, accounting and finance professionals will need to seek out technical experts and partner with them to ensure AI accountability. Gabriela Figueiredo Dias, chair of the International Ethics Standards Board for Accountants (IESBA) and co-CEO of the International Foundation for Ethics and Audit (IFEA) offers the following advice:
“Because of the complexity of the technologies and ethical matters that accountants have to deal with, more will be forced to tap into the expertise of people who may or may not be fellow accountants but who bring the necessary specific technical knowledge about technological methods and innovations so that they can better understand the questions, the information, etc.,” Dias said. “This raises additional ethics problems related to conflicts of interest, independence, bias, and again the need for professional accountants to apply a critical mindset and all their competence in using the work of these technology experts to address the ethical problems that they may raise.”
IMA has been a champion of ethics in AI, with educational courseware and publications sharing best practices on managing the integration of AI with management accounting. For example, IMA has encouraged “ethics mapping” when deploying AI technology and has created a foundational course, “Ethics in the Digital Age,” with insights on how to build an ethical culture in the Digital Age.
How AI is used depends on whether or not humans have the requisite ethical mindset to deploy it properly. Ethics is never an easy or straightforward topic, but IMA seeks to help its members navigate the complexities of using AI ethically for the benefit of their organizations and society.