AI is arguably the leading technology in various business processes. It provides data, detects issues, and makes companies more efficient. However, it also presents multiple risks, including biases, security issues, and noncompliance.

Organizations have determined a way to minimize risks- enter the AI audit. The process reviews AI systems to identify and address potential issues and verifies they run smoothly. CIOs and their teams should prepare for audits to ensure they are effective.

What is an AI Audit?

An AI audit is a review of an organization’s AI technology and its supporting algorithms to identify issues like prohibited activities and unacceptable risks. It ensures the system aligns with legal, compliance, and ethical standards.

The audit will focus on a combination of technical processes and company-focused policies, such as:

• Data output
• Model and algorithmic functions
• Overall system functionality
• Ensuring AI aligns with the company’s policies and procedures
• Verifying the AI meets industry compliance
• Testing control effectiveness

Are AI Audits Mandatory?

AI audits aren’t universally mandatory. However, regulations like the EU AI Act and other local laws are emerging, making them a legal requirement in specific applications and jurisdictions. In any event, audits support a transparent work environment.

How to Prepare for An Audit

Identify Your Goals

The first step involves determining what you want from your audits. Many audits seek out common AI issues such as:

• Bias: AI often sources its information from the internet, using biased sources. For example, a study on mortgage loans found that people of color are more likely to be denied by automated processing systems compared to their white counterparts.
• Security: AI is a security risk as attackers can easily manipulate it. Systems also handle large amounts of sensitive data, which makes them attractive to cybercriminals.
• Transparency and Explainability: The information AI sources from the internet can be false. Many companies publish or disburse the information without questioning it, leading to a lack of transparency and explainability, which can negatively impact an organization’s reputation.

Determine Your Processes

Audits can be conducted internally or externally. A legally mandated audit requires an external team. Teams within the company may perform internal audits.

Organizations conducting internal audits must determine if each department will be audited separately or if they will audit the organization as a whole. A centralized audit provides a more comprehensive view of company processes, while a departmental audit can perform a deeper dive into individual operations. Moreover, if a team audits its systems, it will have a deeper understanding of what’s involved.

If internal teams are used, they must also be trained to identify how to audit systems and what issues to look for.

Promote Transparency

An audit requires full cooperation and insight across departments. Sometimes, things can get stressful, and teams may feel that you are questioning the integrity of their work. A transparent approach ensures they understand the purpose of the audit and don’t feel attacked.

Ensure Data Accuracy

An audit often requires comparing data metrics to determine their accuracy. Therefore, all data collected must be measurable and correlated with the given subject matter. For example, data must be collected on the subjects’ race if an audit looks for racial biases.

Another example may be an audit that aims to determine how young people interact with its system. If data is collected during spring break, it may not provide typical metrics.

During the Audit

Know Things Can Get Messy

Audits can get messy and may even cause disruptions. Leaders should expect some disorder and be prepared to handle and embrace it. They should be helpful without micromanaging.

It’s an Evolving Process

Audits rarely follow a linear process. As such, different metrics are brought into play, and they don’t always align. Teams should always choose the metric that best supports business needs, which may not always be the most helpful.

Document Decisions

Documentation should be required in auditing processes. All technical decisions should be recorded, including any metric tradeoff decisions. The documents will help organizations interpret the results and effectively apply them.

Cutting the Red Tape

Red tape can come into play if teams don’t agree to release information that may be necessary in the auditing process. Leaders typically have the power to cut through red tape, but they may not be on hand. A team member should be assigned the task of allowing access when necessary.

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