An IS auditor is reviewing AI-driven processes that automate financial approvals.

Separation of Duties (SOD) is intended to prevent errors or fraud by ensuring no single person (or entity) has control over all stages of a transaction. When AI automates financial approvals, the " Lack of transparency in the algorithm " creates a challenge because the logic that grants approval is often opaque. If the algorithm functions as a " Black Box, " it may consolidate decision-making power that was previously spread across multiple human roles, without sufficient visibility into how those decisions are made. This can lead to unauthorized or erroneous approvals going undetected. Effective AI governance must ensure that automated approvals are subject to transparent audit trails and secondary human reviews to uphold SOD principles.