From Paper-Based Reports to AI-Generated Financial Statements: Examining Automation’s Role in Enhancing Accuracy, Efficiency, and Compliance
Keywords:
Artificial Intelligence, Financial Reporting, Accuracy, Efficiency, ComplianceAbstract
Purpose
This study investigates the impact of transitioning from traditional paper-based financial reporting to AI-generated financial statements, focusing on AI’s role in enhancing accuracy, efficiency, and compliance with global standards like IFRS and GAAP.
Design/Methodology/Approach
A mixed-methods approach was employed, incorporating regression analysis, paired T-tests, and Chi-Square tests to assess the effects of AI-driven automation on financial reporting. The study analyzed the changes in financial statement accuracy, reporting time, and compliance rates following AI implementation.
Findings
- Accuracy and Efficiency: AI adoption resulted in a 19% improvement in financial statement accuracy and a 58% reduction in reporting time, significantly enhancing the reliability and speed of financial reporting.
- Compliance: A 21% increase in compliance rates was observed, indicating better adherence to regulatory standards.
- Correlation Analysis: Strong correlations were found between AI adoption and improvements in accuracy (0.984), efficiency (-0.998), and compliance (0.972), underscoring AI’s positive impact on financial reporting quality.
Originality/Value
This research contributes to understanding how AI can transform financial reporting by reducing errors, optimizing processes, and ensuring regulatory compliance. It provides empirical evidence supporting the integration of AI in financial reporting systems.
Practical Implications
- Cybersecurity: Implement robust cybersecurity frameworks to protect sensitive financial data.
- Regulatory Standardization: Establish standardized AI regulations to address algorithmic bias and ensure consistent compliance.
- Hybrid Collaboration: Foster hybrid AI-human collaboration to leverage AI’s strengths while maintaining human oversight and judgment.
Conclusion
The study concludes that AI-driven financial reporting enhances transparency, reduces risks, and strengthens investor confidence. Despite challenges such as data security and regulatory complexities, the benefits of AI adoption justify its integration into financial reporting systems.
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