Guide: AI and automation in financial reporting
Handbooks | November 2024
Our new in-depth guide offers insights for responsibly integrating AI into financial reporting, including governance and internal control considerations.
Our new guide is designed to assist with identifying the AI and automation used in financial reporting and provide guidance on how to identify the associated risks with those tools. We also share insights on governance – including developing appropriate entity-level controls, process control activities and general IT controls.
Applicability
- All companies
Key impacts
Intelligent Tools – encompassing the spectrum of Automation and Artificial Intelligence (AI) technologies – are being embraced across industries. Many departments within a typical entity have integrated these tools into their operations or are exploring doing so. Financial executives are no exception. These tools not only can meaningfully increase productivity but also can help entities stay ahead in today’s rapidly evolving business landscape.
Yet, these tools come with added, but manageable, operational and regulatory risks. New or existing rules and regulations may also require disclosures about how an entity uses this technology, the risks related to its use, and the role the Board of Directors plays in its oversight.1 Responsible use and strong governance of AI and automation tools promotes confidence of investors and other relevant stakeholders in the capital markets. Those tasked with corporate governance over the financial reporting process need a game plan for identifying the Intelligent Tools already being used in that process, evaluating the ones being considered, identifying the accompanying risks, and responding to those risks by establishing strong governance and control policies and procedures over the tools’ development, acquisition, deployment and operation. Management, with board oversight, plays a key role in establishing the right control environment for using these tools.
This publication is designed to assist you in developing and implementing such a game plan for Intelligent Tools used in the financial reporting process. It explains key considerations for identifying and understanding the risks and walks through the process of developing strong governance policies and procedures to respond to those risks.
[1] SEC.gov | The Sate of Disclosure Review
Report contents
- What are Intelligent Tools
- Entity-level controls related to Intelligent Tools
- Risk assessment
- Process understanding and process control activities
- General IT controls for Intelligent Tools
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AI and automation in financial reporting
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