Guide: AI and automation in financial reporting

Our new guide is designed to assist with identifying automation and AI 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

• Companies implementing, or thinking about implementing, AI.

Key Highlights

Automation and AI are being embraced across industries. Many departments within a typical entity have integrated automation and AI tools into their operations or are exploring doing so. Finance departments 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. Responsible use and strong governance of automation and AI 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 automation and AI 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 automation and AI 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.