NEW SERIES-ARTIFICIAL INTELLIGENCE



The rapid development of artificial intelligence (AI) technology means internal control work in enterprises is facing profound changes. The advantages of AI in data analysis, process automation, and risk identification provide powerful support for internal control in enterprises, but at the same time, it also puts higher demands on the skills and career development of internal control personnel. Internal control specialists, need to consider how to better integrate AI and improve the efficiency and value of internal control, while ensuring their own professional competitiveness. In the era of AI, internal control personnel not only need to possess traditional internal control knowledge, but also need to master new technologies to adapt to the new mode of AI human collaboration. Each month we will follow this section with information, terminology and practice aids regarding the implementation and use of Artificial Intelligence (AI).

Challenges and Considerations...The Conclusion of our AI Series



Challenges and Considerations

While AI offers significant benefits for internal control, there are also challenges and considerations to keep in mind:

• Data Quality: The effectiveness of AI depends on the quality of the data it analyzes. Ensuring high data quality and integrity is crucial for accurate AI-driven insights.
• Ethical Concerns: Organizations must address ethical concerns related to AI, such as bias, privacy, and transparency. Establishing ethical guidelines and governance frameworks is essential.
• Skill Development: Internal control personnel need to develop new skills to effectively leverage AI technologies. This includes understanding AI concepts, data analysis, and process automation.

Conclusion

AI is playing a transformative role in internal control by enhancing data analysis, process automation, continuous monitoring, predictive analytics, intelligent auditing, compliance management, and ethical governance. By embracing AI, organizations can improve the efficiency, accuracy, and effectiveness of their internal control systems, ultimately leading to better risk management and decision-making.

NBA Commissioner Adam Silver said Friday that he was “deeply disturbed” about allegations of criminal gambling fraud that resulted in the indictments of Portland Trail Blazers head coach Chauncey Billups and Miami Heat star Terry Rozier a day earlier. “There’s nothing more important to the league and its fans than the integrity of the competition,” Silver said in a halftime interview during Friday’s Boston Celtics-New York Knicks game. “And so I had a pit in my stomach. It was very upsetting.” The federal indictments announced Thursday alleged two schemes of fraud, one involving cheating at illegal poker games and another that involved NBA games and online sports betting.

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DOJ's Corporate Voluntary Disclosure Program Creates New Incentives for Commercial Real Estate Developers to Report Potential Criminal Activity

Commercial real estate developers and their business partners may face increased scrutiny from the U.S. Department of Justice (DOJ) as federal prosecutors turn their attention to building cases that focus on the Trump administration’s regulatory priorities, such as foreign criminals who use American businesses to further their activities. For example, foreign investment in commercial real estate may be increasingly examined for the possibility that funds originated with sanctioned individuals or in sanctioned countries, especially from countries like Iran and Russia. Prosecutors may also be interested in funds derived from illegal activities—especially narcotics cartels and foreign terrorist organizations—and laundered through a development project. 

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CPSC Modernizes with AI, Raising New Compliance Risks

The U.S. Consumer Product Safety Commission (CPSC) recently announced a significant strategic shift: the agency plans to use artificial intelligence in overseeing consumer product safety. Moving beyond its traditional reliance on complaints and company reports to identify potentially hazardous products, CPSC now plans to use predictive analytics and machine learning to detect hazards earlier. The agency has stated it will draw on data from social media, online reviews, and import records to anticipate risks rather than wait for them to materialize.

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Authorised Signatory Management: The missing control in Accounts Payable?

Accounts Payable (AP) has historically been a transactional engine for organisations. For some, this is still the case but there has been a marked shift in many organisations whereby AP has evolved from a back-office processing function into a strategic enabler of financial control, operational efficiency, and risk management. The importance of the AP function cannot be underestimated as it is a critical control point where payment risks converge. Ask any CFO where the greatest exposures lie in their organisations, and AP is likely to be near the top of the list. Why is this? AP is where large sums of money leave the organisation on a daily basis. The sheer volume and speed of transactions make it a prime target for errors, fraud, and control failures.

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Melania Trump Used as ‘Window-Dressing’ in Elaborate Memecoin Fraud, Legal Filing Claims

A cryptocurrency promoted in January by US first lady Melania Trump was part of a sophisticated fraud that “leveraged celebrity association and ‘borrowed fame’ to sell legitimacy to unsuspecting investors,” a new legal filing has alleged. In April, crypto investors brought a federal class action lawsuit against Benjamin Chow, cofounder of crypto exchange Meteora, and Hayden Davis, cofounder of crypto venture capital firm Kelsier Labs, among other defendants, accusing them of a multimillion-dollar fraud involving a single memecoin, $M3M3.

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Voting machine company charged in $1M bribery plot tied to Philippine elections

Federal prosecutors say Smartmatic executives paid $1 million in bribes to a Philippine election official, then laundered the money through fake contracts and offshore accounts. A federal grand jury in Miami returned a superseding indictment on Thursday against SGO Corporation Limited — commonly known as Smartmatic — and several of its executives for allegedly orchestrating a bribery and money laundering scheme tied to the 2016 Philippine national elections, according to the U.S. Department of Justice (DOJ).

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Feds Seize $15B in Cryptocurrency Cyber-Fraud Case

The Justice Department (DOJ) announced on Tuesday that it seized $15 billion worth of cryptocurrency and indicted the alleged orchestrator behind the cyber-enabled fraud scheme, calling it the “largest forfeiture action” in the department’s history. The indictment was unsealed on Tuesday in federal court in Brooklyn, N.Y., charging Chen Zhi, also known as Vincent, the head of Prince Holding Group. Zhi allegedly directed Prince Group’s operation of forced-labor scam compounds across Cambodia.

“Today’s action represents one of the most significant strikes ever against the global scourge of human trafficking and cyber-enabled financial fraud,” Attorney General Pamela Bondi and Deputy Attorney General Todd Blanche said in a press release.

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Four major Korean banks report ₩169 billion losses as internal controls fail

Banks have strengthened internal controls every year to prevent a recurrence of financial accidents, but such incidents still occur frequently. In particular, at the four major commercial banks — KB Kookmin, Shinhan, Hana, and Woori — large embezzlement cases and others occurred this year, pushing the amount of losses through August above the total for last year. According to the “Status of financial accidents at commercial banks” submitted by the Financial Supervisory Service to People Power Party lawmaker Lee Heon-seung’s office on the National Policy Committee on the 16th, losses from financial accidents at the four major commercial banks from January to August this year totaled 169.1 billion won, surpassing last year’s 46.3 billion won.

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