FRC publishes report on AI in corporate reporting
The Financial Reporting Council’s Financial Reporting Lab has published a report examining the potential role of artificial intelligence (AI) in the corporate reporting process.
The report is the latest in the Lab’s series of technology deep-dive reports. It explains the basics of different AI technologies and their implications and potential use cases for corporate reporting. The key points from the report are as follows:
- The Lab believes AI systems could be used to auto-classify expenses and accounts payable with a view to systemising data so that they can be assimilated into an annual report.
- Robotic process automation (RPA) technology could be used to create elements of a company’s annual report by rolling figures from previous accounting periods into the next report and automatically applying XBRL tags to allow onward financial analysis. Reports could be prepared initially using standardised “building blocks” populated using AI technology.
- In time, the ability to create an entire annual report quickly and accurately may mean that the annual reporting cycle becomes meaningless. Companies could instead generate a report at any time covering any time period.
- AI could allow boards to check that annual reports comply with and address all legal, regulatory, technical and industry guidance content requirements. This in turn could provide additional comfort to the company’s auditor when preparing its report.
You can read more about the legal implications of artificial intelligence and other disruptive technologies on our Digital and Innovation hub here.