ISACA Certified Artificial Intelligence Auditor (CAIA) — Question 4

From a data appropriateness and bias perspective, which of the following should be of GREATEST concern when reviewing an AI model used in a credit scoring system?

Answer options

• A. The model incorporates the applicant’s loan history to assess spending habits.
• B. The model considers the applicant’s income level as a key factor in the credit decision.
• C. The model uses postal codes as a primary factor in determining creditworthiness.
• D. The model utilizes historical credit data to predict future credit behavior.

Correct answer: D

Explanation

The correct answer is D, as utilizing historical credit data can perpetuate existing biases present in the past data, leading to unfair credit decisions. Options A and B are generally accepted practices in credit scoring, while option C, while concerning, does not have the same level of impact as relying heavily on historical data, which may reflect systemic biases.