KUALA LUMPUR (July 17): Asia-Pacific companies were the slowest in adopting artificial intelligence (AI) for financial reporting, according to a survey by KPMG International.
The study, based on a survey of 1,800 companies across 10 countries, found that only 29% of Asian Pacific firms were on board with AI, KPMG said in a statement. That compares to 39% of the firms in North America and 32% in Europe, the firm noted.
“The roles of auditors are being redefined as businesses are looking to their auditors to lead the AI transformation due to their deep understanding of financial reporting processes and their abilities to pinpoint areas where AI can add most value,” said Foong Mun Kong, head of audit at KPMG in Malaysia.
As a result, audits are shifting toward “being more real-time and predictive, significantly transforming how insights are delivered,” he said.
The findings were published in KPMG’s recently announced report entitled 'AI in financial reporting and audit: Navigating the new era.'
Businesses want more from auditors
More than half of businesses want their auditors to prioritise predictive analysis, according to the report, while 47% desire faster speed of delivery, and 45% seek real-time auditing throughout the year.
KPMG’s report also found that early adopters of AI in financial reporting are reaping further benefits as opposed to other companies which don’t. Nearly two-third of the respondents reported better ability to predict trends and impact and 60% seen real-time insight into risks.
On the downside, reported challenges experienced during the early stages of AI adoption included data privacy concerns (59%), limited AI skills and talents (56%), poor organisational knowledge of AI (51%), and uncertainty about best use cases to prioritise (41%).
However, these hurdles would diminish to “some extent” as organizations become more proficient in using AI, KPMG noted. AI advancements in financial reporting could be a “triple win” for companies, auditors, and information users by enhancing quality and efficiency, and supporting more informed business decision-making, Foong said.
“At present, no jurisdiction, including Malaysia, explicitly requires auditors to perform assurance reviews of AI governance,” he said. “However, I am confident that regulators and standard setters will keep pace with market expectations.”