Artificial intelligence (AI) is fundamentally changing financial reporting and auditing. It helps companies to create more intelligent information flows and better recognise risks and anomalies.
How is AI developing in corporate financial reporting? What role do auditors play in this? 1,800 executives from ten countries provide exclusive insights.
Our English-language study ‘AI in financial reporting and audit: Navigating the new era’ among 1,800 managers shows that we are at the transition from the ‘digital age’ to the ‘AI age’. Both in Germany and worldwide, 60% believe that the use of AI brings high to very high added value for financial reporting.
AI in financial reporting and audit: Navigating the new era
How artificial intelligence is changing financial reporting and auditing
Download the study nowOrganisations that use AI for their financial reporting experience a variety of benefits. The most important are the ability to predict trends and impacts, make better data-driven decisions and gain real-time insights into risks, fraud and control weaknesses. At the same time, the use of AI reduces costs and increases the productivity of the financial reporting team - and facilitates the recruitment and training of employees. AI will help companies to better understand their financial data, make more informed decisions and strengthen their competitiveness.
However, companies also expect their auditors to fully utilise the many possibilities of AI. Over three quarters of companies believe that the use of AI in auditing is of great importance, along with automation and data analysis, which go hand in hand with the introduction of AI. Auditors are expected to use AI for three main purposes:
Improving the efficiency and accuracy of inspections
Over two thirds of companies want their auditors to prioritise the use of AI for data analysis and quality management. Slightly fewer would like auditors to focus on AI for identifying risks and anomalies as well as for risk mitigation and fraud detection.
Development of more proactive, continuous and predictive processes
Over half of companies want their auditors to prioritise predictive analytics, and slightly fewer want them to accelerate the speed of processing and conduct real-time audits throughout the year.
Collection of data and valuable audit findings
Many companies expect their auditors to use AI's ability to analyse vast amounts of data and gain insights that may not be available to human auditors.
As part of the study, 300 companies from Germany were surveyed. You can read about the special features of our local market and how Germany compares globally here.
Focus on Germany: Special features and recommendations for action
In Germany, only just over half of the companies surveyed make increased use of cloud services (65 per cent) or cyber security applications (50 per cent). This shows that many companies in Germany are not yet fully utilising the potential of cloud and cyber security technologies.
In order to remain competitive or assume a position as market leader, an early and focussed use of AI technologies and corresponding support technologies is necessary.
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Currently, over 46 per cent of the companies surveyed in Germany are in the practical planning and test phase and 42 per cent are already in active use. Three out of four of the companies surveyed are planning to switch to active use in the coming years.
In order to make the transition as smooth as possible, companies should set clear goals and milestones at the beginning to measure and ensure progress.
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The correct results generated by AI are a high priority for companies (85 per cent). This results in high demands on the quality and security of AI technologies and their use. This also applies in particular to the banks, insurance companies and asset managers surveyed in Germany, 73 per cent of whom see a challenge in ensuring that the AI-generated results are always correct.
To ensure the quality and security of AI-generated results, companies should introduce a quality control and risk management framework. This should include standards for data quality and regular system checks. In addition, it is important to create transparency in AI decision-making processes and establish effective feedback and correction mechanisms, especially in critical sectors such as finance.
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The companies surveyed in Germany consider the regular implementation of audits and monitoring measures for the ethical use of artificial intelligence to be extremely valuable. 45 per cent of respondents consider this to be very effective. Companies from the financial services sector in Germany in particular emphasise that monitoring measures are necessary (71 percent).
This emphasises the need for increased implementation of monitoring measures and audit processes to ensure ethical standards in the use of AI technologies and to strengthen trust in their use.
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Further Information
Our expertise for your AI transformation
Our experts have the technological AI expertise and specialist knowledge of cyber security to be able to provide support in the planning, realisation and subsequent monitoring of AI implementation projects. As an auditing company, we also provide the necessary quality and extensive knowledge in the regulatory and audit-related environment.
Sebastian Stöckle
Global Head of Innovation and AI, Audit, KPMG International and Audit CTO, KPMG Germany
KPMG AG Wirtschaftsprüfungsgesellschaft
Josephin Gleixner
Partner, Financial Services
KPMG AG Wirtschaftsprüfungsgesellschaft
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