Practitioner-built, principles-based guidance from FEI's Committee on Corporate Reporting on how AI impacts Internal Control Over Financial Reporting (ICFR)

MORRISTOWN, N.J., June 25, 2026 /PRNewswire/ -- Financial Executives International (FEI) today announced the release of the AI Framework: Internal Control Over Financial Reporting, a new whitepaper developed by FEI's Committee on Corporate Reporting (CCR) to help companies integrate artificial intelligence (AI) into financial reporting while maintaining effective internal control over financial reporting (ICFR).

The framework was authored by a cross-industry group of corporate controllers, chief accounting officers, and accounting leaders from Fortune 100 and large public companies, with input from academia. It is intended to be a living document that will evolve alongside AI technology and regulatory expectations.

"As finance leaders race to capture the value of AI, they are being asked to do so without disrupting the reliability of financial reporting that markets depend on. This framework reflects exactly what FEI does best: convening the most respected practitioners in the profession to translate an emerging challenge into practical guidance. It gives finance teams a credible, principles-based starting point to adopt AI responsibly while protecting the integrity of their internal controls."
— Andrej Suskavcevic, CAE, President and CEO, FEI

"AI doesn't change management's fundamental responsibility for effective internal controls — but it does change how we earn comfort over them. By focusing on validating outcomes, the framework gives companies practical control approaches they can put to work today, and a path to scale automation responsibly as their AI systems prove reliable over time."
— Aaron Anderson, contributing author and CCR member

As AI moves rapidly from experimentation into core finance and accounting processes, management teams face a dual challenge: capturing AI's efficiency and analytical benefits while preserving the reliability of financial reporting that capital markets depend on. The framework provides a practical, principles-based approach for identifying, scoping, and managing AI systems used in financial reporting — whether AI is embedded in a process or relied upon as a control — consistent with the Sarbanes-Oxley Act (SOX) and the COSO Internal Control – Integrated Framework.

Rather than attempting to audit the inner workings of "black box" AI systems, the framework emphasizes human oversight and outcome-based validation, and offers four business control approaches that companies can deploy individually or in combination:

• Human-in-the-Loop (HITL): Integrating human intervention at strategic decision points to validate system outputs and manage model uncertainty.
• Performance Testing: Leveraging curated test data sets to compare AI system outputs against known "ground truth" results to ensure ongoing mathematical and logic accuracy.
• Multi-Model Validation: Using a systematic comparison between the primary AI system and an independent "challenger" model to identify variance and confirm reliability.
• Data Analytics: Employing advanced monitoring techniques to analyze system trends, identify anomalies, and ensure the AI operates within established guardrails.

The framework also addresses AI-specific risks such as hallucination, model drift, and algorithmic bias; provides guidance on SOX scoping and risk assessment; and outlines an outlier management and resolution process.

The AI Framework: Internal Control Over Financial Reporting whitepaper is not intended as legal guidance or advice, and it should not be relied upon for decisions that may raise liability concerns. FEI is not responsible for how companies or individuals use the AI Framework: Internal Control Over Financial Reporting. Where questions exist concerning possible legal ramifications, readers of the whitepaper should consult with appropriate legal counsel.

The complete Framework is available for $195.00 on the FEI website here.

About FEI's Committee on Corporate Reporting (CCR)
The Committee on Corporate Reporting (CCR) is a high-powered, multi-industry committee of Financial Executives International composed of highly engaged Corporate Controllers and Chief Accounting Officers from Fortune 100 and large public companies. CCR focuses on engaging accounting standard setters and regulators and has a positive impact through comment letters and other advocacy, including direct engagement with the SEC, FASB, PCAOB, and the Big 4 accounting firms.

About Financial Executives International (FEI)
Financial Executives International (FEI) is the leading association and advocate for the views of corporate financial management. Its Members hold policy-making positions as chief financial officers, chief accounting officers, controllers, treasurers, and tax executives at companies in every major industry. FEI enhances Member professional development through peer networking, career management services, conferences, research, and publications. Members participate in the activities of local Chapters in the U.S. FEI is located in Morristown, NJ. Visit www.financialexecutives.org for more information.

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SOURCE Financial Executives International