AI is giving finance a severe improve.
It’s automating duties, rushing up shut cycles, and usually making life a bit of simpler for accountants all over the place. However when robots begin making selections that influence your backside line, issues get actual.
That’s the place auditable AI is available in: the key weapon to creating certain your AI instruments are sensible and accountable.
To interrupt all of it down, we spoke with Mike Whitmire, Co-founder and CEO of FloQast, a number one accounting platform. On this Skilled Highlight, Mike shares what led him to begin FloQast, how AI is being utilized in monetary administration immediately, and why making AI auditable is not elective.
This interview is a part of G2’s Business Insights collection. For extra content material like this, subscribe to G2 Tea, a weekly e-newsletter with SaaS-y information and leisure.
Deep dives with Mike Whitmire
Are you able to stroll us by your profession journey? What experiences led you to co-found your organization and give attention to accounting software program?
Accounting is in my blood. My mother is an accountant who runs a bookkeeping agency and offers enterprise consulting for small companies and household places of work in Los Angeles. And my dad is a tax lawyer turned writer who writes books about taxation legislation.
Once I began faculty, I initially pursued movie, which was clearly unrelated to what I do now. Alongside the best way, I found the enterprise program and took an accounting course. I spotted I used to be good at it and located it attention-grabbing, so I made a decision to main in accounting.
After graduating, I adopted the standard path: joined a Huge 4 audit agency, labored there for a number of years, earned my CPA license, after which transitioned out of audit. I wished to achieve expertise at a pre-IPO firm to see what that course of appeared like behind the scenes, however the alternative to work extra common hours was additionally fairly interesting.
On the time, discovering such alternatives in LA wasn’t straightforward, however in 2009, I joined an organization known as Cornerstone OnDemand. They’d simply taken on a spherical of enterprise funding and have been planning to go public inside 12 to 18 months. I liked it. I used to be the ninety fifth worker and the fifth particular person on the accounting group. Over three years, I helped scale the corporate, took half within the IPO course of, and noticed the accounting group develop to about 60 individuals.
It was an unbelievable studying expertise that finally led me to begin my very own firm, FloQast. Having labored in accounting, I rapidly noticed the inefficiencies of outdated, and sometimes handbook, workflows. I skilled firsthand the frustrations that got here with this — the lengthy hours, the complications, and the burnout, particularly in the course of the month-end shut, which was all the time a painful course of. I knew there needed to be a greater technique to deal with all this.
That realization pushed me to search for extra environment friendly strategies to alleviate these frustrations. My companions and I got down to create an answer that may enhance effectivity throughout varied areas of accounting workflows. In 2013, we launched FloQast with a easy however highly effective imaginative and prescient: to construct the product we wished we had throughout our early careers after we have been placing in these additional hours to shut the books.
For individuals who don’t know, inform us a bit about what auditable AI is. When did you first acknowledge the necessity for it in finance?
Auditable AI refers to synthetic intelligence methods designed with transparency, accountability, and compliance in thoughts. It’s AI that doesn’t function as a “black field” however as a substitute offers clear, traceable processes and outputs that may be independently verified. That is particularly crucial in fields like accounting, the place accuracy, belief, and regulatory compliance are non-negotiable.
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I first acknowledged the necessity for auditable AI when generative AI instruments started gaining traction. The second I noticed how these methods might course of huge quantities of knowledge and generate outputs in seconds, I believed, “How will we confirm this?” If AI spits out numbers or suggestions, auditors and accountants nonetheless want to make sure these outcomes are correct and compliant. With out auditable AI, the career dangers buying and selling effectivity for accountability — a trade-off we merely can’t afford.
That is when it turned clear: we would have liked AI methods in accounting that have been designed from the bottom as much as be auditable — methods that keep documentation trails, protect resolution logic, and function in ways in which exterior events can meaningfully confirm.
How are AI-powered instruments at the moment being utilized in company accounting and monetary administration?
AI-powered instruments are already reworking accounting in profound methods. Right this moment, they’re getting used to automate repetitive, time-consuming duties like information entry, reconciliations, and journal entry preparation, liberating up accountants to give attention to higher-value strategic work. AI can also be serving to groups analyze massive volumes of economic information extra effectively, uncovering insights that drive higher decision-making and enhance enterprise outcomes.
Nevertheless, the true potential lies in AI’s skill to adapt to the distinctive wants of every group. At FloQast, we’re taking this a step additional with our AI Brokers, which not solely automate workflows but in addition permit accounting groups to customise and construct their very own options. This stage of flexibility is crucial in a discipline as complicated and ever-changing as accounting.
The fact is that AI is rapidly changing into a necessity. With the rising expertise hole and growing workloads, organizations that fail to undertake AI threat falling behind. At FloQast, we’re dedicated to delivering AI options that accountants can belief, making certain they’ve the instruments they should thrive on this new period of finance.
In the end, our purpose is to place accountants accountable for constructing their very own reliable AI processes to allow them to evolve from preparers into strategic reviewers — a job that’s changing into extra essential in organizations with restricted sources and experiencing unpredictable exterior challenges.
One large impediment is the expertise scarcity throughout the accounting career. Whereas AI gained’t exchange accountants, adapting AI-powered options will keep productiveness and provides them extra time to give attention to high-impact work that drives enterprise methods ahead.
What are the important thing dangers related to AI in monetary processes, and why is it so necessary to make sure AI is auditable?
The important thing dangers revolve round accuracy, transparency, and compliance.
First, AI is simply nearly as good as the information it’s educated on, and if that information is flawed or biased, the outputs shall be too. This will result in important monetary errors or misreporting. On the subject of transparency, many AI methods, particularly massive language fashions (LLM), function as “black packing containers,” making it obscure how they arrive at their conclusions. This lack of readability can erode belief and make it practically unattainable to confirm outcomes.
There’s additionally the danger of non-compliance. Requirements like ISO 42001 replicate the rising recognition that AI methods should adhere to the identical verification ideas as human processes.
Because of this auditable AI is so crucial. It ensures that AI methods are clear, traceable, and accountable. Auditable AI offers clear trails displaying how conclusions have been reached, who reviewed them, and what controls have been in place.
With out auditable AI, we threat undermining the very basis of belief that the accounting career is constructed on. At FloQast, this isn’t theoretical. We have constructed auditability into our AI Brokers from the bottom up as a result of we perceive that automation with out accountability is a non-starter for accounting groups.
Are there present rules round auditing AI in accounting? Do you foresee new compliance necessities rising?
At present, there aren’t particular, universally adopted rules solely centered on auditing AI in accounting. However a number of present frameworks, like Sarbanes-Oxley (SOX) and GDPR, already impose necessities round information accuracy, transparency, and accountability, which not directly apply to AI methods. For instance, SOX mandates that firms keep inner controls over monetary reporting, and if AI is concerned in these processes, it have to be auditable to make sure compliance.
That stated, new requirements are rising to deal with the distinctive challenges of AI. As an illustration, at FloQast, we’ve made ISO 42001 central to our strategy. That is the primary worldwide commonplace particularly focused at AI administration methods, and we’re amongst a small group of organizations which have achieved this milestone certification.
Whereas not completely for monetary functions, ISO 42001 offers crucial guardrails round AI governance, threat administration, and bias mitigation. The usual requires organizations to ascertain clear AI insurance policies, conduct influence assessments, implement rigorous monitoring, and keep full documentation of AI methods — all ideas which might be deeply aligned with accounting’s inherent want for management and verification.
Whereas ISO 42001 might develop into the gold commonplace, I do foresee different compliance necessities rising as AI adoption grows. Regulators are already paying nearer consideration to how AI is utilized in delicate areas like finance, and it’s solely a matter of time earlier than extra particular guidelines are launched. The important thing for organizations is to remain forward of the curve by adopting auditable AI now, making certain they’re ready for no matter regulatory adjustments come subsequent.
What steps ought to company accounting groups take to make AI-powered processes extra auditable?
By establishing clear frameworks and controls, accounting groups could make methods extra auditable and keep away from any potential dangers. Listed here are 5 key steps:
- Keep a whole audit path of all AI-driven selections. Each transaction processed, each journal entry created, and each reconciliation carried out by AI ought to go away a transparent digital fingerprint displaying what was performed, when, and based mostly on what inputs. When auditors ask how your AI reached particular conclusions, you want rapid, thorough solutions.
- Design your AI workflows with human oversight in thoughts. AI ought to increase, not exchange, human judgment. Construct workflows that require accountants to evaluation and approve AI-generated outputs.
- Recurrently check AI outputs in opposition to established benchmarks. Simply as you’d check inner controls, you want mechanisms to confirm your AI is performing constantly and precisely over time, particularly after any mannequin updates.
- Leverage present AI platforms which might be already designed with auditability in thoughts. These platforms ought to log each motion, present detailed audit trails, and permit auditors to recreate and confirm outcomes simply.
- Keep watch over evolving rules and requirements, corresponding to ISO 42001, and proactively align your AI methods with these frameworks. This ensures compliance and positions your group as a pacesetter in accountable AI adoption. The AI Brokers at FloQast have been constructed with these ideas in thoughts, adhering to ISO 42001 requirements that emphasize transparency and accountability.
What developments do you see sooner or later for AI in company accounting? How ought to companies put together?
We’re heading towards a world the place AI methods will deal with complicated monetary workflows end-to-end, basically shifting what it means to be an accountant. As an illustration, we’re at a degree the place AI methods will have the ability to handle your entire month-end or year-end shut processes. This can primarily change the accountant’s function from preparer to strategic reviewer/advisor.
I additionally see AI evolving to develop into extra anticipatory and interconnected with methods that don’t simply course of what occurred yesterday however assist us perceive what’s more likely to occur tomorrow. The expertise will develop into extra collaborative, however it’ll all the time want to take care of the strict safety and governance requirements that the accounting career calls for.
All through historical past, our career has embraced new instruments that improve our capabilities. AI is the following step on this journey. Organizations that succeed on this new period shall be those who earn belief by balancing AI’s energy with human judgment and strategic considering.
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Edited by Supanna Das
