AI in financial reporting and auditing: Navigating the new era

Just as with other business processes, artificial intelligence is transforming financial reporting and auditing. In the past, these financial activities have stereotypically been seen as time-consuming and monotonous exercises, requiring statistical sampling methods and manual checking of financial data. But AI is changing that —helping businesses create smarter and more joined-up information flows with better identification and response to risk and a much greater ability to detect anomalies and outliers. Hand in hand, it is also bringing new capabilities to auditors.

But how far will this go? Our research conducted amongst 1,800 financial reporting executives across major economies around the world shines a new light on key questions — and finds that we are standing on the cusp of a genuine financial reporting revolution: moving from the ‘digital age’ to the ‘AI age’ in which nothing will ever be quite the same again.

While there are hurdles to overcome —notably around data privacy and security —the benefits that could be reaped in the areas of insight generation, trend and anomaly detection, risk control, and data-enabled decision making could power us into a new era where financial reporting is smarter and better than we have ever seen before —all subject to laser-focused and highly granular AI-enabled auditing processes.

As the path unfolds, companies expect their auditors to lead and inspire the transformation of financial reporting through AI. Audits are expected to become increasingly real time and more preventative than reactive.

View our latest report to find out how you can leverage AI to help your business. If you’d like to learn more about how KPMG can help your organisation with your AI in financial reporting journey, reach out to our experts below.