Dive Brief:
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While recent breakthroughs in generative AI have sparked renewed workplace worries about jobs being replaced by technology, just over half (55%) of senior financial leaders surveyed do not think AI will shrink financial reporting teams. However, 39% think AI-related efficiencies will cut team size and 21% expect team size will grow because its value will be enhanced, according to a recent survey from the Big Four accounting firm KPMG.
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Business executives are cautiously looking past the hype to harness AI’s technological promise in financial reporting, with 65% of financial executives saying they are using AI in that space in some capacity, citing benefits related to increased efficiency and a reduced burden on employees (51%); greater data accuracy, reliability and predictability (50%); and increased visibility into end-to-end processes and controls (50%), according to the findings of the AI in Audit Survey released by KPMG this week.
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Given the current mixed perceptions about AI, KPMG National Managing Partner-Audit Operations Tim Walsh said he was “pleasantly surprised” by the share of respondents who did not believe AI will cut their staffing and by “the optimism financial reporting leaders showed for the value of AI to their functions. That is similar to how we view the value of AI to our own workforce — that it will free up our people to focus on areas of higher risk and not supersede the kind of professional judgment that really only humans can provide,” he said in an emailed response to questions from CFO Dive.
Dive Insight:
The survey results come as President Joe Biden this week signed a sweeping executive order directing the Labor Department to lead the development of artificial intelligence guidelines for employers amid growing concerns over its risks as companies rush to adopt it.
The survey’s findings evidenced both interest and caution about AI and generative AI on the part of the finance execs, with 70% of respondents expecting to adopt AI solutions for financial reporting in the next two years even as less than half (47%) agree that GenAI will live up to the hype swirling around it.
Reflecting a glass-half-full expectation surrounding AI’s impact on workforce size, a little over half (52%) of those surveyed expect increased use of AI will help them attract more potential workers to financial reporting function. As AI changes and elevates some of the jobs that might have previously involved more rote drudgework, the technology go a ways toward solving the accounting talent shortage by attracting more younger professionals into the field.
“We’re very used to getting pieces of data, testing parts of that data, reviewing back to physical pieces of paper and saying whether there are exceptions or not,” Walsh said in an interview. “Now we’re taking data right from a client’s system and there is an outcome from that and that result needs to be interpreted. It’s a different level of engagement and of learning around financials at an earlier point in a professional’s career.”
Walsh does not see AI replacing the accountants or auditors. The information AI can yield is only as good as what’s put into it in terms of the quality and reliability of the data and the output is not something that can simply be relied upon, he said. He doesn’t expect AI to change that.
“There’s an entire piece around trust and ethics right now that requires a human at a different point within the process looking at the analysis to ensure that it’s reliable and that it’s accurate,” Walsh said, noting that in the auditing field he views AI as a tool that will simply help professionals do their jobs better. “At the end of the day we need to do our jobs as auditors and that is to provide reasonable assurance the financial records are appropriate.”
The survey’s data was collected between July 24 and Aug. 4 from executives in finance-focused business functions with authority or oversight of financial reporting, accounting, analysis and audits at large organizations with more than $1 billion in annual revenue.
