AI Organizational Processes and Alignment AAIR Practice Questions (Page 6)

Questions 26–27

1. 26application · medium

   A multinational bank is integrating AI risk management into its enterprise risk management (ERM) framework. The bank's ERM framework uses a three-lines-of-defense model. The AI model development team reports directly to the Chief Data Officer, who also owns the data quality function. During a model validation, the second line identifies a conflict: the same team that develops the models also performs the initial independent validation. Which action best aligns AI processes with the ERM framework?

   • AOutsource the validation to the external auditor to guarantee objectivity.
   • BEstablish a separate model risk management function reporting to the Chief Risk Officer to perform independent validation.
   • CHave the Chief Data Officer sign off on the validation results to ensure data quality is considered.
   • DDocument the conflict in the model risk register and accept the residual risk.
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2. 27application · medium

   A logistics company is developing an AI route optimization system. The team has completed the design phase and is about to start development. A risk assessment identifies that the system could cause safety issues if it fails. The project manager wants to proceed. Which action should be taken to embed risk management in the lifecycle?

   • AProceed with development and conduct the safety review during testing.
   • BAsk the development team to informally consider safety during coding.
   • CRequire a safety review and mitigation plan before development proceeds.
   • DDocument the safety risk and defer mitigation until after deployment.
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