AI Transforming Financial Reporting Globally: KPMG

AI transforming financial reporting globally with near-universal adoption imminent: Almost three-quarters of businesses already using AI in financial reporting, set to rise to 99 percent in 3 years

  • Companies are looking to auditors to lead the transformation and to provide assurance over AI
  • 82 percent of companies believe that their auditors are ahead or equal with them in the adoption of AI for financial analysis
  • GenAI is the highest technology priority in financial reporting in the next year for Leaders

Toronto, ON (June 1, 2024) – Artificial intelligence (AI) is already being widely adopted in companies’ financial reporting processes, with nearly three-quarters (72 percent) of businesses piloting or using it, and this is set to grow to almost universal levels (99 percent) over the next three years, according to new global research from KPMG International. At the same time, companies expect AI to be increasingly used by their auditors to drive more proactive and predictive audits.

KPMG’s research – published in the report, AI in financial reporting and audit: Navigating the new era – was conducted amongst 1,800 companies across ten major markets and finds that organizations are seizing on the potential of AI to increase reporting insights, accuracy and efficiency.

Geographies, sectors and sizes

There are variations between geographies, sectors and company sizes. Among regions, companies in North America are moving at the fastest pace with 39 percent of companies in the region selectively or widely adopting AI for financial reporting, followed by Europe (32 percent) and Asia Pacific (ASPAC) (29 percent).

In terms of sectors, telecoms and technology businesses have made the most progress, with 41 percent responding that they are now selectively or widely adopting AI within their financial reporting processes, followed by energy, natural resources and chemicals (35 percent). Consumer products and retail businesses, however, trail other industries (26 percent).

Company size also influences adoption, with the largest businesses being the furthest ahead. KPMG’s research identifies a maturity framework with three cohorts – Leaders (24 percent of businesses), Implementers (52 percent) and Beginners (24 percent). Four in 10 of the largest companies, with revenue of over $10 billion, are Leaders, while less than half that percentage are Leaders at companies with under $5 billion in revenue.

Auditors expected to lead the way

In parallel with these tectonic shifts in financial reporting, AI is also having a huge impact on auditing, bringing new analytical capabilities and insights. Indeed, companies expect their auditors to lead the AI transformation and inspire and drive the transformation of financial reporting.

Over three-quarters of companies believe that AI is moderately to very important for their external auditors to use, along with automation and data analytics, which go hand in hand with the adoption of AI. The lion’s share of companies (82 percent) believe that their auditors are ahead or equal with them in the adoption of AI for financial analysis.

They are looking to their auditor to deploy AI in the audit for three main purposes:

  • Improve the efficiency and accuracy of audits
  • Develop more proactive, continuous and predictive procedures
  • Gather data and value-added audit insights

A significant number of companies want their auditors to take it one step further: 52 percent want their auditors to prioritize predictive analysis, and 47 percent want faster speed of delivery and 45 percent want real-time auditing throughout the year.

Commenting on the findings, Larry Bradley, Global Head of Audit at KPMG International, said: “Our study confirms it – AI is not just hype. It is already having a profound effect on how companies operate, including their systems, processes, controls and governance over financial reporting, and this is set to dramatically accelerate in the next few years. We are leaving the digital age and entering the AI age. As auditors, we are committed to utilizing the power of AI in everything we do, not just as a tool, but as a fundamental part of our approach to auditing. Our goal is to ensure that AI is used in a way that is trustworthy, human-centric and values-based. This is underpinned by KPMG’s Trusted AI Approach.”

Powerful benefits from AI – with Gen AI the next big focus

Companies that embrace AI for financial reporting see a myriad of benefits. Two-thirds of Leaders see the top benefits as the ability to predict trends and impacts (65 percent), while real-time insights into risks (60 percent), better data-enabled decisions and increased data accuracy (both 57 percent) also feature highly.

At the same time, the use of AI is translating into greater productivity for the financial reporting team, combined with higher talent acquisition and skills development. Over 4 out of 10 companies already report greater employee productivity and efficiency, and in three years the percentage will grow to 6 out of 10.

Looking forward, businesses are alive to the huge potential of generative AI (genAI). As a relative technology newcomer, fewer organizations are piloting or using it now (43 percent) compared to ‘traditional’ AI – but adoption is set to accelerate significantly over the coming three years. Indeed, over the next 12 months Leaders are set to prioritize genAI for financial reporting more than any other technology. Almost half (47 percent) will prioritize it, ahead of data & analytics (44 percent), process mining (39 percent) and cloud (36 percent).

Managing the risks – companies want auditor assurance and attestation

Businesses also want auditors to help them ensure that their use of AI is robust, safe and compliant with rules and regulations. In the future, companies expect their auditors to have a more important role in evaluating the use of AI in their financial reporting processes, and potentially providing assurance and attestation over their AI controls. Nearly two-thirds of respondents (64 percent) say they expect auditors to have the role of conducting a more detailed review of the control environment in relation to their use of AI in financial reporting. Over half (53 percent) foresee auditors carrying out an AI governance maturity assessment, while a third expect to ask them to provide third-party attestation over the use of AI technology. However, this is an area where regulation needs to move and maintain pace with the rapid pace of development of use of AI in financial reporting and in auditing.

Moving forward on the journey – learning from the leaders

Businesses are very cognizant of the risks of AI, with data security, privacy and ethical issues the top concerns. In general, there are currently more concerns over genAI than traditional AI, including cybersecurity issues and copyright & IP alongside other areas such as privacy and hallucinations.

Managing the risks and taking an ethical approach to AI implementation is critically important – and is why KPMG has created its Trusted AI Approach that enshrines qualities such as transparency, fairness and accountability.

To overcome the hurdles and mitigate the risks, organizations can learn much from the Leaders. KPMG’s report examines the various ways that Leaders are controlling their AI deployments, such as through AI frameworks, governance structures and training programs.

Reflecting on the findings, Sebastian Stöckle, Head of Innovation, Global Audit at KPMG International said: “It’s AI adoption at full speed now – but businesses need to proceed carefully and in the right way. They may need help to drive a safe and successful transformation in financial reporting – through expertise in data management and analysis, deep understanding of regulatory and independence processes, and access to best in class alliance partners to drive innovation. We are as enthused as anyone about the massive potential of AI and genAI, and we stand ready to help drive the innovation needed along with the assurance and attestation that is essential for safe adoption.”

About KPMG in Canada

KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada’s top employers and one of the best places to work in the country.

The firm is established under the laws of Ontario and is a member of KPMG’s global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see

About KPMG International

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. Learn more at

Source: KPMG LLP

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