The impact of AI on finance, internal audit and governance

This webcast explored how companies and their audit committees are anticipating and adapting to rapid changes in technology including how artificial intelligence is impacting finance and internal audit functions.

This is part of our webcast series, Better Questions for Boards, designed to provide directors with insights and questions to consider as they engage with management on a variety of complex boardroom issues.

AI technologies are surging and evolving, presenting both risks and opportunities for companies. Boards and particularly audit committees are keenly focused on understanding the impacts of AI on finance, accounting and internal audit functions. This webcast dived into important topics such as:

• The future of finance functions and AI: Hear from the leader of Microsoft’s Modern Finance initiative about how finance functions are evolving in the current environment, including ways AI and other emerging technologies are transforming the finance function. Learn about AI use cases in finance and accounting, audit impacts, governance considerations and talent implications.
• Internal audit priorities: Gain insight from the chief audit executive at GE Aerospace about key areas of focus for internal audit teams, especially as they adapt, innovate and transform the internal audit function using new technologies. Discover how internal audit priorities are evolving to meet the needs of companies, boards and audit committees.
• SEC update: Get the latest updates on current and emerging financial reporting and regulatory developments, including SEC updates and other important reminders and considerations.

The discussion will be moderated by Patrick Niemann, Partner in the EY Center for Board Matters of Ernst & Young LLP. Panelists will include:

• Lauren Alexander, Partner, National Professional Practice, Ernst & Young LLP
• Megan Duggan, Partner, Risk Consulting, Ernst & Young, LLP
• Cory Hrncirik, Modern Finance Leader – Office of the CFO, Microsoft
• Richard Jackson, EY Global Artificial Intelligence Assurance Leader
• Samantha Jackson, Chief Audit Executive, GE Aerospace

Key takeaways

• The scale of change in talent; tech advancements, such as AI; globalization; and evolving internal audit expectations are forcing audit committees and internal audit to change.
• With a major acceleration in the use of AI and agentic AI, companies are moving beyond proofs of concept and ideas and into mainstream production. Audit committee members and internal audit teams need to embrace AI and continue to enhance their AI fluency to keep pace with evolving risks and opportunities.
• Data is critical. AI applications are data-dependent, and it’s important to compile the right data to help AI do a better job, without hallucinations. Quality governance will inform the extent and speed of acceptable experimentation and use of the technology - and mitigate risks.
• Boards should confirm that AI governance connects to business strategy, capital allocation and compliance across jurisdictions — with cross-functional representation and clear KPIs.
• Internal audit can be the steward of risk management and is uniquely positioned to reach across lines and drive a common understanding of risk.
• Most internal audit priorities haven’t changed, but how they are audited has. Internal audit functions are already relying on AI to automate certain tasks, and they will get better results faster by using agentic AI for detailed work.
• Where technology meets people is where the best ROI can be captured. The internal audit talent profile is changing, and for the auditor of the future, it’s less about what they know and more about how they learn and adapt. With knowledge at their fingertips, the real skill is using it to change the way they operate.

What we heard from the audience

• Nearly 30% of board members said they were not confident that their organization’s AI governance framework adequately mitigates AI-related risks. Just over half said they were somewhat confident it does.
• Asked what would make the internal audit function more effective, 45% of board members said investing in and using emerging technology tools, while only 8% said diversifying the talent model.