Leading consultant KPMG details the investment patterns, risks, and opportunities financial reporting experts anticipate from AI adoption in its most recent survey, Navigating the AI Era in Financial Reporting.

The most startling finding is that, compared to 71% who now do so, all US financial reporting leaders asked said they intend to be either experimenting or implementing AI in financial reporting.

Furthermore, 97% of respondents said they intended to use Gen AI for reporting requirements within the same time range.

The poll, which included 1,800 businesses from ten major markets, includes important viewpoints and conclusions from 300 respondents in the US. It follows the introduction of KPMG's new Digital Finance platform, which aims to provide financial professionals across the board access to a cutting-edge technological stack.

KPMG: Increased use of AI in financial reporting is anticipated.

KMPG anticipates that short-term IT investment in AI-related activities will increase as well, especially for Gen AI capabilities, which appear to be the top priority for financial reporting professionals in the upcoming year. AI is expected to become the focal point for financial reporters over the course of the next three years alone.

10.1% of US organizations' IT budgets are already allocated to AI-related projects, and as the need for integrating more Gen AI capabilities increases, this percentage is expected to rise.

According to KPMG's most recent study, IT directors at US companies are spending more time and resources on best practices for managing AI risk in addition to receiving more financing.

This involves upskilling external auditors so they can assess control environments with professional judgment in addition to using AI and Gen AI in audits. One illustration would be the capability of conducting third-party attestation about the application of AI by businesses and provide insights into the maturity of their AI governance.

"It's evident that financial reporting leaders are rapidly accelerating investments to use AI and Gen AI to not just gain efficiencies but create more value for their organizations by predicting trends and identifying emerging risks," states Scott Flynn, Vice Chair of Audit at KPMG US.

It is imperative for financial reporting leaders and external auditors to comprehend the array of complementary investments in cloud, data, and governance in order to minimize the risks associated with this fast shift.

AI's advantages and disadvantages for financial reporters

According to KPMG, 73% of organizations will experience enhanced advantages in real-time risk insights, fraud, and control weaknesses. This is in line with ambitions across US corporations to grow AI and Gen AI capabilities in the financial reporting function.

Furthermore, 67% anticipate improved data dependability and accuracy, and 62% will benefit from decreased expenses.

However, even while intentions are to go forward with onboarding AI and Gen AI capabilities, the largest obstacles to effectively integrating this new technology, according to 56% of KPMG's respondents, are privacy and data security issues.

Furthermore, 46% of the organizations polled expressed concern about the lack of personnel and skills needed to successfully apply Gen AI. To effectively utilize Gen AI, 44% of respondents are concerned about the quality of company data, and 43% believe that more financing and commitment levels are necessary to advance their technology.

Therefore, despite the fact that there are still obstacles standing in the way of the effective use of AI and Gen AI in financial reporting, everyone in the sector agrees that these technologies will increase organizational value and generate efficiency.