Treasury and FX

Currency risk management starts with exposures: invoices, orders and forecasts in foreign currencies. A hedging programme decides which exposures to hedge, with what instruments and when, within a board-approved policy. Reference rates matter for valuation and reporting; the Federal Reserve publishes daily foreign exchange rates in its H.10 release.¹

For a listed company, any automated step that feeds the financial statements sits inside internal control over financial reporting, which management must evaluate and report on; the SEC's interpretive guidance for that report is Release 33-8810.² COSO describes its Internal Control, Integrated Framework as originally issued in 1992 and refreshed in 2013.³ Hedge accounting and the valuation of derivatives carry their own documentation requirements.

Thresholds are a judgment, not a setting. The SEC staff's view on materiality is that "exclusive reliance on this or any percentage or numerical threshold has no basis in the accounting literature or the law."⁴ A forecast drift alert set as a percentage can miss a small change in a covenant-sensitive balance.

NIST's AI Risk Management Framework is a common reference for those questions. NIST says the framework is "intended for voluntary use and to improve the ability to incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, services, and systems."⁵ Its first version is published as NIST AI 100-1.⁶

Vendor claims about AI are claims, not findings. The SEC has brought settled charges against two investment advisers "for making false and misleading statements about their purported use of artificial intelligence (AI)."⁷ A finance team that relies on a vendor's description should ask for evidence of what the feature does with its own data.