"Contrary to the conventional wisdom, we find that the client tends to spend fewer corporate resources on precision with audit risk disclosure. As a result of lower precision, audit risk disclosure may lower the informativeness of audited financial reports, albeit ex-post communicating more information to the market. We also find that audit risk disclosure reduces the client's ex-ante payoff when the auditor bears a high misstatement cost due to audit failure."
“... we provide evidence that setting the risk-weighted ratio at 15\% and the simple leverage ratio at 10% would significantly decrease the probability of default without hampering banks' activities.”
The study investigated how ChatGPT and Bard categorize investor risk profiles compared to financial advisors. While there were no significant differences in the risk scores assigned by the chatbots an
The paper suggests that companies developing high-risk AI systems should demonstrate their safety before deployment, arguing for proactive risk management. It proposes a risk management approach where