AI in finance and accounting
Rule 13a-15 makes the issuer maintain disclosure controls and procedures and, once it has an annual-report history, internal control over financial reporting. Management must then evaluate that internal control as of each fiscal year end, against a framework the rule describes but does not name. Where an AI system operates inside a control, the evaluation has to reach it.
§ 1Who it binds
United States registrants. Paragraph (a) reaches every issuer with a class of securities registered under section 12 of the Exchange Act, other than asset-backed issuers, small business investment companies registered on Form N-5, and unit investment trusts. The internal control limb attaches once the issuer has filed an annual report; the evaluation in paragraph (c) is management's, carried out with the participation of the principal executive and principal financial officers.
§ 2In practice
Paragraph (c) fixes the yardstick without naming one. The assessment "must be a suitable, recognized control framework that is established by a body or group that has followed due-process procedures, including the broad distribution of the framework for public comment." That is a description of a class, and the class has one member most registrants select — the COSO Internal Control—Integrated Framework, whose sponsors include the professional bodies a finance function already belongs to. Regulation S-K Item 308(a)(2) then requires the framework used to be identified in the annual report, which turns a private methodological choice into a disclosed one.
The definition that bites on AI is at paragraph (f)(1): internal control over financial reporting includes policies and procedures that "[p]ertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer". Reasonable detail is a documentation standard applied to the record, and an output nobody can reconstruct fails it before any question of accuracy arises. A matching engine that clears an item on a similarity score is producing a record; whether that record is in reasonable detail depends on whether the basis for the clearance survives anywhere.
Then the mismatch. The evaluation is made as of the last day of the fiscal year, about a control that a model runs on every day of it. A conclusion that the control was effective on 31 December is a statement about a system that may have been three versions old in March, and the rule offers no method for reconciling those two facts. The quarterly limb goes some way — see deploying an AI tool mid-year is a change you must disclose — but between two evaluation points the model is unsupervised by the regime, and only the registrant's own records fill that interval.
One structural point that the certification rules make visible: paragraph (c) puts the evaluation on management "with the participation of" the principal executive and principal financial officers. The duty to maintain and evaluate belongs to the entity; the personal exposure attaches elsewhere and to named individuals. A finance function that reads the whole regime as corporate misses that split, and with it the reason its papers will eventually be read by somebody who has to sign. What such a person needs is not an assurance that the model is good but a record of what it does, which is the same thing the ethics code asks the professional to be able to establish before relying on output at all: see using the output of technology.
§ 3What a weak answer looks like
A supplier assurance report, offered as though it were the assessment. It is evidence about the service organisation, produced for its customers generally, on a period the supplier chose and against criteria the supplier scoped. What it cannot do is stand in for management's own conclusion about a control as operated in this business, on this data, with these settings, as at this year end. Registrants that lean on it usually have no separate paper of their own, so removing the report from the file leaves nothing behind.
§ 4What discharges it
The artefacts an assessor asks to see, and what makes each one sufficient rather than merely present.
01
Naming the model, its version, the configuration in force, and — the field usually missing — whether the tool decides or proposes. Those two are different controls and cannot share one entry.
02
Item 308(a)(2) requires the framework used to be named. Where management supplements it with material published for generative systems, the file should say what was supplemented and why.
03
The paragraph (c) assessment has to cover controls a machine runs, not only those a person runs. Papers that stop at the human review layer describe half a process.
04
Take a single cleared item and rebuild how it was cleared: inputs, settings, the version in force that day, the disposition. If that cannot be done, "reasonable detail" is untested rather than met.
05
Somebody in or reachable by the organisation has to be able to account for how output is produced. Naming that person, and showing the conversation happened, is cheap and almost never present.
06
Who may deploy it, change its settings and act on what it returns. Controls over access are part of the evaluated population and tend to be held by a team that does not read accounting papers.
§ 5Worked example
In January 2025 the Securities and Exchange Commission settled an administrative proceeding against Presto Automation Inc., which sold an AI drive-thru ordering product. The Commission found that between November 2021 and May 2023 the company made materially false and misleading statements about that product: for a period the speech recognition in every deployed unit was owned and operated by a third party, and the company later claimed its own product removed the need for human order-taking when the vast majority of orders placed through that version required human intervention.
What did the Commission find about the company's controls, as distinct from its statements?
Paragraph 47 of the order finds a violation of Rule 13a-15(a) — the duty to maintain disclosure controls and procedures — alongside Securities Act section 17(a)(2) and Exchange Act section 13(a) and Rule 13a-11. The false statements were the harm; the controls finding is the part a finance function should read twice. A process that could not establish what the company's own AI system actually did, and could not stop a claim about it reaching a filing, was itself a violation, independently of anyone's state of mind. The matter settled with no civil penalty, on cooperation and remediation. The transferable point holds when the facts are inverted — a model operating inside a control rather than being sold as a product — because it is the same defect: where nobody in the reporting chain can say what the system does, the chain is not working, and its not working is available as a finding without proof that any number came out wrong.
§ 6Elsewhere
Where another instrument addresses the same obligation. These are correspondences, not comparisons — the Council does not rank one framework against another.
The audit material addresses how a control whose output varies between runs is tested. This rule addresses who must evaluate it and by what date. The two describe the same control from the two sides of the table.
The Annex A control families cover the organisational machinery around an AI system — ownership, change, data and supplier arrangements. An organisation running a conformant management system already holds much of what a paragraph (c) evaluation asks to see.
A correspondence indicates that two instruments address the same underlying obligation. It is not a mapping endorsed by either body, not a statement that one satisfies the other, and not a judgement about which is more demanding.
§ 7When it applies
14 August 2003
Rule 13a-15 in the form that carries both the maintenance duty at paragraph (a) and the annual evaluation at paragraph (c).
15 November 2004
The first fiscal year ending on or after this date for an accelerated filer, which is when management's annual assessment of internal control over financial reporting began for that class.
15 December 2007
The equivalent commencement for non-accelerated filers. A smaller registrant reading commentary written for large filers will find dates that were never its own.
§ 8Exposure
No fixed maximum — Commission enforcement, remedies determined on the facts
The duty is enforced by the Securities and Exchange Commission under section 13(a) of the Exchange Act. In the Matter of Presto Automation Inc. (Securities Act Release No. 11352, Exchange Act Release No. 102177, Administrative Proceeding File No. 3-22413, 14 January 2025) is a settled finding of a Rule 13a-15(a) violation on which no civil penalty was imposed, the Commission citing cooperation and remediation. Nothing in the rule sets a ceiling, and the absence of a penalty in one settled matter fixes nothing for the next.
§ 9Where this is assessed
Examined in 2 credentials, in the domains named on each card.
Close and reconciliation support · 20% of the paper
For finance and accounting professionals who use AI in analysis, close and reporting work — and verify the output before the numbers are relied on.
AI inside internal control and the close · 20% of the paper
For senior finance and accounting professionals who set the terms on which AI is used across a finance function — and answer for the estimates, controls and disclosures it touches.
§ 10provenance
This page sets out what the instrument requires and what discharges it. The official text is the authority — these go straight to it.
§ 11Also read
Certification
What this page sets out is examined, on work the candidate has not seen, in the credentials beside it. Every paper is machine marked against its key and every result is reviewed and released by a named person, and every credential is on the public register.
AIAC-FNAF
Certified AI in Finance & Accounting, Fundamentals2 hours · remote, proctored · valid 2 years
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Certified AI in Finance & Accounting, Professional2 hours · remote, proctored · valid 2 years
Ten questions on using AI at work. About two minutes, free. You finish as one of six types, with a card to share.
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