Besides the nearly universal use of artificial intelligence in financial reporting, companies also expect auditors to increasingly use AI to drive more proactive and predictive evaluation.
A recent KPMG study revealed that nearly 72% of companies surveyed are either piloting or using AI in financial reporting. Three years from now, that number is expected to increase to 99% of respondents, becoming a universal practice.
When surveyed, 57 % of 1800 companies from six different industries said they will implement generative AI for financial reporting over the next three years. Moreover, 64% of business managers surveyed expect auditors to evaluate their use of AI for this purpose, providing assurance and attestation over their AI controls, and increasingly use AI themselves for proactive checkups.
Region-wise, companies in North America are the most advanced when it comes to AI adoption. More than one-third (39%) of regional companies adopt AI for financial reporting. Next comes Europe with 32% and the Asia Pacific (29%).
AI for financial reporting is most widely used by telecoms and technology businesses, with 41% selectively or widely adopting intelligent technology within their financial reporting processes. Tech leaders are followed by energy, natural resources and chemicals segments (35%). Consumer products and retail businesses trail behind with 26%.
At the same time, all the companies surveyed have their boards taking strategic action regarding AI and investing strategically and substantively in the technology. Although AI currently accounts for 10% of the corporate IT budgets, its share is expected to rise significantly next year.
AI is transforming reporting and auditing with better identification and response to risk and a greater ability to detect anomalies. Besides, AI can automate routine tasks in financial reports, improve data accuracy and legal compliance, provide enhanced data analysis and insights, enable real-time reporting, leverage natural language processing for audio input, detect and prevent fraud, reduce costs, and offer scalable reporting solutions.
As AI’s role in the financial industry grows, ECB experts have admitted that initiatives related to monitoring and regulating the use of generative artificial intelligence in financial services may eventually be necessary.
