July 2026

zhaomichelle.substack.com · Jul 12, 2026

AI Model Validation: Beyond the Easy Cases to Uncover True Risks

This article emphasizes that effective AI model validation must go beyond testing easy, in-distribution data. Internal auditors should ensure testing protocols actively seek out model failures in hard cases, across diverse subgroups to detect bias, and under adversarial conditions to assess robustness. This proactive, skeptical approach is crucial for identifying and mitigating significant AI risks before deployment, aligning closely with core auditing principles.

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zhaomichelle.substack.com · Jul 11, 2026

AI Model Validation: The Critical Role of Independent Oversight and Robust Governance

This article emphasizes that the validation stage of AI models is fundamentally an audit function, requiring strict segregation of duties. Internal audit and assurance professionals must ensure that those validating AI models are independent from their developers, possess the necessary technical competence, and are empowered to challenge findings. The piece highlights the importance of documented evidence and predefined acceptance criteria to prevent validation from becoming a mere rubber stamp, drawing parallels with established financial model risk management frameworks.

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radicalcompliance.com · Jul 10, 2026 · Curated 4 weeks ago

Compliance and Audit Leadership Shifts: Key Appointments and Departures Across Industries

This week's Compliance Jobs Report highlights significant movements in compliance and internal audit leadership across various sectors, including fintech, manufacturing, retail, and government. Audit and assurance professionals should note the increasing demand for specialized compliance roles, the strategic importance of internal audit in navigating organizational changes, and the evolving landscape of risk management as companies adapt to new regulatory challenges and technological advancements.

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radicalcompliance.com · Jul 9, 2026 · Curated 4 weeks ago

Navigating AI Governance: Aligning Compliance with Strategic Business Objectives

As AI adoption accelerates, internal audit and assurance professionals must shift their focus from AI security to AI governance. This article highlights the critical need for robust governance frameworks to manage AI agent behavior, emphasizing that misbehavior, rather than security breaches, poses a more significant and often overlooked risk. It underscores the importance of aligning AI governance investments with strategic business priorities to secure necessary resources and ensure effective oversight.

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torontoauditor.ca · Curated 4 weeks ago

Toronto Auditor General's 2026 Follow-up Report: Status of Outstanding Recommendations for City Divisions, Agencies & Corporations

The Toronto Auditor General's 2026 Consolidated Follow-up Report details the implementation status of audit recommendations across City divisions, agencies, and corporations. The report highlights significant financial benefits from implemented recommendations, totaling an estimated $14 million, while also identifying a substantial number of high-priority recommendations that remain outstanding for over five years. It emphasizes the importance of expediting the implementation of these recommendations to maximize value and improve city operations.

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seattletimes.com · Curated 4 weeks ago

King County Establishes New Inspector General Office to Combat Fraud

King County, Washington, has created a new Office of Inspector General (OIG) to enhance oversight and combat fraud, waste, and abuse within its government operations. This independent body will investigate allegations, conduct audits, and recommend improvements to ensure accountability and efficient use of public funds.

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Blog · Curated 4 weeks ago

Segregating Duties for Federal Grant Compliance

The Washington State Auditor's Office emphasizes the critical role of segregating duties in ensuring compliance with federal grant requirements. Their updated Segregation of Duties Guide now includes a dedicated chapter on federal awards, detailing how to apply this internal control principle to common administrative tasks like reporting. This approach aims to enhance accuracy, detect errors, and prevent fraud in the management of federal funds.

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zhaomichelle.substack.com · Jul 9, 2026

Navigating AI Model Development: Key Risks and Audit Considerations for Assurance Professionals

This article delves into the critical risks inherent in the AI model development stage, moving beyond data-centric issues to focus on the model's construction and governance. For audit and assurance professionals, understanding these risks—such as overfitting, lack of explainability, brittleness, and poor version control—is crucial for evaluating the reliability, compliance, and ethical implications of AI systems before they reach deployment. The piece emphasizes that seemingly successful development can mask significant vulnerabilities, underscoring the need for robust audit scrutiny.

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alexandracar.substack.com · Jul 8, 2026

Federal Procurement: The Unseen Regulator of AI and Technology

The U.S. government, as the world's largest buyer, is leveraging its immense purchasing power to shape the AI and technology market. Through procurement mandates, it's effectively imposing regulatory standards on vendors, even those without direct federal contracts, creating a de facto regulatory framework that internal audit and assurance professionals must understand to assess compliance and risk across their organizations and supply chains.

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radicalcompliance.com · Jul 7, 2026 · Curated 4 weeks ago

FIFA's Red Card Reversal: A Case Study in Control Failures and Eroding Trust

This article uses a controversial FIFA decision to overturn a World Cup red card, allegedly influenced by political pressure, as a compelling case study for internal audit and assurance professionals. It highlights the critical importance of transparent processes for addressing control failures and the severe consequences of perceived management override on organizational integrity and stakeholder trust. The incident underscores how a lack of clear, consistent remediation procedures can undermine credibility, even when an initial control failure is acknowledged.

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