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ACCA Strategic Professional · Strategic Business Leader · Enabling success: disruptive technologies

Corvane Retail plans to use an AI system to automatically reject or approve staff expense claims with no human review. Internal audit notes that the model's logic is a 'black box' that managers cannot explain to employees who dispute a rejection. Which risk is most directly highlighted?

The most direct risk is lack of transparency and explainability. If managers cannot explain why the AI rejected a claim, accountability and fair treatment of employees are weakened, and disputes cannot be properly resolved. Human oversight or explainable models would mitigate this governance problem.

  1. ALack of transparency and explainability, which undermines accountability and fair treatmentCorrect
  2. BTechnological obsolescence, because the model will soon be replaced
  3. CData latency, because the claims are processed in batches
  4. DNetwork capacity risk, because the system will overload the servers

Explanation

The inability to explain how decisions are reached is an explainability and transparency problem. It weakens accountability, makes challenge difficult and may breach fairness expectations. The other risks are not indicated by the facts given.

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