AI is giving finance a critical improve.
It’s automating duties, dashing up shut cycles, and usually making life a bit simpler for accountants in all places. However when robots begin making choices that impression 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 good 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 Trade Insights sequence. 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 via 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 legal professional turned writer who writes books about taxation regulation.
After I began school, I initially pursued movie, which was clearly unrelated to what I do now. Alongside the way in which, I found the enterprise program and took an accounting course. I noticed 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 Large 4 audit agency, labored there for a number of years, earned my CPA license, after which transitioned out of audit. I needed to realize 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. That they had simply taken on a spherical of enterprise funding and had been planning to go public inside 12 to 18 months. I cherished it. I used to be the ninety fifth worker and the fifth individual 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 unimaginable studying expertise that in the end led me to begin my very own firm, FloQast. Having labored in accounting, I shortly noticed the inefficiencies of outdated, and infrequently handbook, workflows. I skilled firsthand the frustrations that got here with this — the lengthy hours, the complications, and the burnout, particularly through the month-end shut, which was at all times a painful course of. I knew there needed to be a greater solution 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 might enhance effectivity throughout numerous 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 had been placing in these further hours to shut the books.
For many 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 techniques 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 vital 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 techniques might course of huge quantities of information 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 occupation dangers buying and selling effectivity for accountability — a trade-off we merely can’t afford.
That is when it grew to become clear: we would have liked AI techniques in accounting that had been designed from the bottom as much as be auditable — techniques that keep documentation trails, protect choice logic, and function in ways in which exterior events can meaningfully confirm.
How are AI-powered instruments at present being utilized in company accounting and monetary administration?
AI-powered instruments are already remodeling accounting in profound methods. Immediately, 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 giant volumes of monetary 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 additionally permit accounting groups to customise and construct their very own options. This stage of flexibility is vital in a area as complicated and ever-changing as accounting.
The truth is that AI is shortly 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, guaranteeing they’ve the instruments they should thrive on this new period of finance.
Finally, our purpose is to place accountants in charge of 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 massive impediment is the expertise scarcity throughout the accounting occupation. Whereas AI received’t change 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 just pretty much as good as the info it’s skilled on, and if that information is flawed or biased, the outputs might be too. This could result in vital monetary errors or misreporting. With regards to transparency, many AI techniques, particularly giant language fashions (LLM), function as “black containers,” making it obscure how they arrive at their conclusions. This lack of readability can erode belief and make it practically unimaginable to confirm outcomes.
There’s additionally the danger of non-compliance. Requirements like ISO 42001 replicate the rising recognition that AI techniques should adhere to the identical verification rules as human processes.
Because of this auditable AI is so vital. It ensures that AI techniques are clear, traceable, and accountable. Auditable AI offers clear trails exhibiting how conclusions had been reached, who reviewed them, and what controls had been in place.
With out auditable AI, we threat undermining the very basis of belief that the accounting occupation 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 techniques. For instance, SOX mandates that corporations keep inner controls over monetary reporting, and if AI is concerned in these processes, it should be auditable to make sure compliance.
That mentioned, new requirements are rising to handle the distinctive challenges of AI. As an illustration, at FloQast, we’ve made ISO 42001 central to our method. That is the primary worldwide normal particularly focused at AI administration techniques, and we’re amongst a small group of organizations which have achieved this milestone certification.
Whereas not completely for monetary functions, ISO 42001 offers vital guardrails round AI governance, threat administration, and bias mitigation. The usual requires organizations to determine clear AI insurance policies, conduct impression assessments, implement rigorous monitoring, and keep full documentation of AI techniques — all rules which might be deeply aligned with accounting’s inherent want for management and verification.
Whereas ISO 42001 might develop into the gold normal, 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, guaranteeing 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 techniques extra auditable and keep away from any potential dangers. Listed below are 5 key steps:
- Preserve an entire audit path of all AI-driven choices. Each transaction processed, each journal entry created, and each reconciliation carried out by AI ought to go away a transparent digital fingerprint exhibiting what was accomplished, when, and based mostly on what inputs. When auditors ask how your AI reached particular conclusions, you want quick, thorough solutions.
- Design your AI workflows with human oversight in thoughts. AI ought to increase, not change, human judgment. Construct workflows that require accountants to evaluate and approve AI-generated outputs.
- Repeatedly take a look at AI outputs in opposition to established benchmarks. Simply as you’d take a look at inner controls, you want mechanisms to confirm your AI is performing persistently 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.
- Regulate evolving rules and requirements, comparable to ISO 42001, and proactively align your AI techniques with these frameworks. This ensures compliance and positions your group as a pacesetter in accountable AI adoption. The AI Brokers at FloQast had been constructed with these rules 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 techniques will deal with complicated monetary workflows end-to-end, essentially shifting what it means to be an accountant. As an illustration, we’re at some extent the place AI techniques will be capable to handle the complete month-end or year-end shut processes. This can basically change the accountant’s position from preparer to strategic reviewer/advisor.
I additionally see AI evolving to develop into extra anticipatory and interconnected with techniques that don’t simply course of what occurred yesterday however assist us perceive what’s more likely to occur tomorrow. The know-how will develop into extra collaborative, however it would at all times want to take care of the strict safety and governance requirements that the accounting occupation calls for.
All through historical past, our occupation has embraced new instruments that improve our capabilities. AI is the following step on this journey. Organizations that succeed on this new period might be those who earn belief by balancing AI’s energy with human judgment and strategic considering.
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Edited by Supanna Das
