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Actual exam question for IAPP's AIGP exam Question #: 20 Topic #: 2
CASE STUDY Please use the following to answer the next question: You have recently assumed the role of AI Governance leader for a California-based medical technology company. The organization primarily serves hospitals and has recently expanded to include walk-in clinics located within local pharmacies. The company ' s core business focuses on diagnostic assistance powered by a large language model LLM and back-office process optimization using Agentic AI, including chatbots, medical record request handling, scheduling and billing. In preparation for its next round of funding, the board has asked you to prepare an AI Risk report to demonstrate to investors how the company is addressing AI-related risks. In preparing the report you learn that last year the company generated 30 million dollars in gross revenue across the US, EU, India, and South Korea and that vendors are engaged for various activities, including model testing and providing third-party AI solutions for chatbots. Which of the following responses is least likely to meet mandatory transparency requirements in any of the applicable laws?
The correct answer is C because simply publishing a general AI policy or code of conduct does not satisfy specific transparency obligations required by AI regulations. Transparency requirements focus on providing clear, context-specific disclosures to affected individuals about how AI is being used, particularly when it directly impacts them. For example, notifying users when they are interacting with an AI system or labeling AI-generated content are explicit transparency measures aligned with regulatory expectations. The AI Governance in Practice Report highlights that transparency includes informing users when they interact with AI systems and providing meaningful information about outputs and system behavior . Model cards and labels support system-level and output-level transparency, while real-time notices ensure user awareness. In contrast, a general policy link lacks immediacy, specificity, and user relevance, making it insufficient for mandatory transparency compliance.
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