AI-driven financial reporting and auditing revolution
100% of US financial reporting leaders surveyed report they expect to be using artificial intelligence (AI) in financial reporting within three years (up from 71% today), and 97% expect to be using generative AI (GenAI) (up from 46% today), according to the survey report, AI in Financial Reporting and Audit: Navigating the New Era. The global survey was conducted among 1,800 companies across ten major markets. Key perspectives and findings from 300 US respondents are highlighted below. More detailed US findings are available in the full report.
Expect to be using artificial intelligence (AI) in financial reporting within three years (up from 71% today)
100%
Expect to be using generative AI (GenAI) in three years (up from 46% today)
97%
Wholesale improvements in insight generation, anomaly detection, risk control, and data-enabled decision-making will make financial reporting smarter, faster, and more efficient than ever before. At the same time, audits will become of higher quality and more dynamic, with real-time insights into trends and risks.
Benefits far outweigh hurdles of responsible use of AI
Top 5 benefits of AI in financial reporting
58%
Lower costs
Real-time insights into risks, fraud, and control weaknesses
70%
Ability to predict trends and impacts
57%
Increased data accuracy and reliability
57%
Better data-enabled decisions
53%
It’s clear that financial reporting leaders are rapidly accelerating investments to use AI and GenAI to not just gain efficiencies but create more value for their organizations by predicting trends and identifying and mitigating emerging risks from this rapid transformation.
Scott Flynn
Vice Chair - Audit, KPMG US
The US has far more AI leaders—defined as those most advanced in using AI for reporting and in putting in place the needed governance—than any other country: 33% vs. 24% on average for the 10 countries surveyed. US AI leaders are substantially ahead of other companies in the US in adopting AI: 98% currently selectively or widely use AI in reporting vs. 22% of others.
AI Leaders: US substantially ahead in AI adoption
Using AI
Piloting
Planning/considering
98%
22%
2%
34%
40.0%
44%
Leader
Other
Use now
Priority next year
GenAI is the #1 technology priority for financial reporting leaders in the coming years, with companies focusing on complementary technologies today. While only 19% use GenAI in financial reporting at present, 58% have set it as a priority for next year—the highest percentage of the emerging technologies examined in the survey.
Shifting technology priorities
77%
27%
Cloud
Data analytics
36%
55%
ERP
15%
54%
AI
36%
46%
RegTech
12%
39%
Blockchain
41%
29%
Process mining
45%
23%
GenAI
58%
19%
How companies are overcoming barriers
Develop principles of how your organization will utilize Al
78%
60%
While some barriers to AI adoption have eased due to growing experience and improvements to AI governance, some have become more prominent. Having jumped ahead of others in the use of AI, US AI leaders are best equipped to show how to overcome barriers to adoption. Find out how we define “leaders”, “beginners” and more about the survey methodology in the full report.
Learning from the leaders: Overcoming barriers
AI Leaders
Beginners
US companies are investing more of their IT budgets on AI-related activities than other countries, on average, and those investments are expected to rise in the coming years. Companies overall intend to increase their AI budgets by 17% next year and nearly 25% over the next three years, where US leaders—those most advanced in using AI for reporting—dig deeper into their pockets saying they intend to increase their AI budgets by 25% next year and nearly 28% over the next three years.
AI investments: US companies plan to increase budgets
AI Leaders
Non-Leaders
All
Average percentage increase in AI investment
Next year
25%
13%
17%
Three years
28%
23%
25%
Ensure technology leadership is involved in systems integration discussions to promote Al enablement
70%
52%
Pilot Al initiatives to validate ROI
59%
51%
Consider increasing investment into Al adoption
46%
44%
Consider new data mining or reporting mechanisms for Al-related data
46%
33%
Formulate communications programs to keep up with regulatory and compliance changes
43%
38%
Incorporate the impact of Al into learning and training programs
42%
33%
As AI becomes more prevalent in financial reporting, organizations want their external auditors to thoroughly evaluate their use of the technology. More than 80% of companies overall want their auditors to utilize AI in performing their analysis (up from 61% last year). They would like their auditors to prioritize the use of AI for a broad range of activities, from data analysis, quality management, and anomaly identification to risk mitigation, fraud detection, and predictive analysis
Auditors to prioritize AI
83%
61%
Recently surveyed
Surveyed last year
Financial Reporting leaders want auditors to utilize Al in their analysis
AI in financial reporting and audit: Navigating the new era
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The use of AI across business activities—and particularly in financial reporting and auditing—continues to accelerate among companies around the world. Half of the US organizations surveyed work with multiple vendors of AI solutions to give them access to a wider range of expertise and technologies, and a larger percentage say they prefer to work with vendors with proven track records. Besides working with experienced outside vendors, companies can follow the example of AI reporting leaders by making the organizational, process, technological, and governance changes needed to become AI ready. The stakes are high. By harnessing AI in the reporting and auditing function, AI leaders are already enjoying a myriad of benefits, from real-time insights into risks and the ability to predict trends and impacts, to increased employee productivity and a greater ability to attract talent.
The road ahead
The potential benefits of AI are driving every conversation with financial reporting leaders. In the next year or two, AI FOMO (fear of missing out) will be replaced with just missing out.
Scott Flynn
Vice Chair - Audit, KPMG US
Scott Flynn
Vice Chair - Audit, KPMG US