Realizing the full potential of artificial intelligence has been saved
Realizing the full potential of artificial intelligence
Applying the COSO ERM framework and principles to help implement and scale AI
Artificial intelligence (AI) will continue to transform business strategies, solutions, and operations. Consequently, AI-related risks have become a top-of-mind priority, particularly for AI at scale. The COSO ERM framework, with considerations from the Deloitte Trustworthy AI™ Framework, can help your organization think through the risks and fully realize the potential of AI.
The COSO ERM framework: Addressing AI risks
As AI becomes more pervasive in business and our everyday lives, organizations will likely no longer have the option of ignoring or avoiding the unique risks that accompany AI adoption. Instead, they must learn to identify, manage, and respond to these risks effectively. Compounding the problem is the fact that AI is often not isolated to a specific function such as IT, but rather affects multiple functions in an organization. Organizations need to design and implement governance, risk management, and control strategies and structures to realize the potential of humans collaborating with AI. Fortunately, AI is like other technological components of an organization and thus can be successfully governed by effective ERM.
Since 1985, the voluntary, private-sector Committee of Sponsoring Organizations of the Treadway Commission (COSO) has been focused on helping organizations improve performance by developing thought leadership that enhances internal control, risk management, governance, and fraud deterrence. The most recent iteration of the COSO ERM Framework, adopted in 2017, highlights the importance of embedding it throughout an organization in five critical components:
- Governance and culture
- Strategy and objective-setting
- Review and revision
- Information, communication, and reporting
COSO Enterprise Risk Management – Integrating with Strategy and Performance Framework
By leveraging the COSO ERM Framework, organizations can identify and manage AI-specific risks and establish practices to optimize the results while managing exposure to risks like unintended bias and lack of transparency. Implementation can help to improve confidence among stakeholders within and outside the organization and proactively address emerging risks related to AI.
The Deloitte Trustworthy AI Framework
AI and the models that make it work also have to be closely monitored across an organization. In designing and implementing AI, six key dimensions may help safeguard ethics and build a trustworthy AI strategy for the company that people can embrace. While currently there is no authoritative framework for AI ethics, Deloitte’s Trustworthy AI Framework can serve as a means to understand and assess risks and ethical considerations that are specific to AI and can be a valuable lens to complement the COSO ERM Framework, especially as it relates to governance and performance. Organizations can use it to help determine and monitor ongoing risks.
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Managing the risks to realize the potential of AI at scale
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The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.