PROFESSIONAL AND LEGAL REGULATION OF THE GOVERNANCE OF ARTIFICIAL INTELLIGENCE USE IN FINANCIAL DISCLOSURE: AN ANALYTICAL STUDY
Keywords:
artificial intelligence, financial disclosure, professional regulation, legal regulation, algorithmic governance, auditability, accountabilityAbstract
This paper critiques existing professional and legal frameworks that regulate the use of AI for making disclosures within the financial services and invests sector. Artificial intelligence is being used to segment transactions, make estimates, detect anomalies, write narratives and mine corporate reports for details. While there are potential benefits of timely, consistent and analytical capacity in the use of these applications, there are also potential risks on data provenance, bias, opacity, hallucinated content, confidentiality, cyber security and more. The study is qualitative in nature, desk design, and it blends directed document analysis doctrinal legal analysis and functional comparison. The documentary sample includes key materials in international accounting, auditing and ethics plus AI governance, data protection and risk-management. We set out twelve criteria for the analysis to assess the technologies, these relate to data quality, transparency and so on. The study finds that professional regulation presents a very well-developed principles-based framework for integrity, objectivity, competence, due care, confidentiality, evidence, and judgment, but less detail regarding the AI Model on documentation and disclosure. Though legal regulation is better at enforcement, it is usually horizontal and not suitable for the specific features of accounting estimates and financial statements. The integrated and proportional model proposed in the paper, on use-case classification, governance and materiality-based disclosure, management accountability, meaningful human review, algorithmic audit trails and model validation. The key value, however, lies in linking professional duties, legal obligations and technical controls across the full lifecycle of AI-enabled financial disclosure.
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