The financial reporting sector is experiencing rapid growth in its reliance on generative artificial intelligence (GenAI), with auditors taking the lead in driving this revolution. According to a recent survey by KPMG targeting finance executives at companies with annual revenues exceeding $1 billion, 70% of AI users plan to expand its implementation within the next two years. Additionally, half of the respondents have already tested or implemented GenAI solutions for financial reporting tasks.
To ensure the effective utilization of GenAI, managers are seeking the expertise of accountants. Scott Flynn, the vice chair of Audit at KPMG, emphasized the pivotal role of auditors in responsibly deploying AI technologies. A significant 72% of participants noted that external auditors are surpassing businesses in adopting AI for auditing financial data. This trend is expected to continue, with executives foreseeing a greater reliance on AI for data analysis by external auditors.
As businesses increasingly embrace AI to enhance their financial assessment capabilities, external auditors are seen as key players in navigating this technological shift. Stakeholders such as leaders in financial monitoring, investors, regulators, and capital market participants believe that AI will elevate audit quality. They anticipate accountants to adeptly evaluate processes, detect anomalies in transaction data, and leverage real-time analysis to stay ahead of emerging risks.
The survey revealed that 65% of executives anticipate auditors to evaluate their AI usage through either comprehensive control environment reviews (36%) or third-party attestation (29%). Moreover, there is a growing expectation for accountants to assess AI applications on a broader scale.
Notably, a majority of American citizens (64%) support the establishment of a government agency dedicated to evaluating the reliability of AI systems. This sentiment aligns with the views of subject matter experts, with 98% agreeing that AI system developers should subject their models to third-party audits, as highlighted by the Artificial Intelligence Policy Institute.
Key insights from the KPMG study include the following:
- The primary benefit cited for AI in financial reporting is increased efficiency and reduced problem-solving time.
- 52% of executives believe that AI will attract more talent to financial reporting roles, with a positive impact expected on participation, capital, and diversity.
- Despite only 27% viewing AI as a solution to staffing shortages, 55% of respondents do not foresee a reduction in their workforce due to AI integration.
