The term artificial intelligence (AI) has perhaps been much misused, not least in hyperbolic reports in the media of its potential to destroy the creative industries and to wreak havoc on the job market. However, AI encompasses so many disparate tools not just the generative software that magics up images, music, video, and text from user prompts but also the analytical tools that can spot latent patterns in data whether that’s financial reports or medical scans.
Despite the hyperbole, it can be said that AI and related tools are changing the way many processes across industries and academia are carried out. Sometimes the transformation is certainly for the better when the AI tools can detect patterns that would normally be missed by human or even conventional software analysis. Research in the International Journal of Behavioural Accounting and Finance has looked at how AI might benefit corporate operations in terms of financial reporting, decision-making, and stakeholder engagement.
Adel Almasarwah of Georgia College and State University in Milledgeville, Georgia, Assyad Al-Wreikat of Frostburg State University in Frostburg, Maryland, USA, Yahya Marei of Seneca College, Toronto, Ontario, Canada, and Nizar Alsharari of Jackson State University in Jackson, Missouri, USA, point out that conventional labour-intensive tasks can be automated using machine-learning tools, neural networks, algorithms. These could allow businesses to handle data, make decisions, and communicate transparency more readily than previously.
The shift reflects the ability of AI tools to process enormous quantities of data quickly and accurately. Given that financial reporting is usually an arduous task prone to human error, the refinements offered by AI’s capacity to identify trends and anomalies could ensure greater accuracy in corporate disclosures. This should allow companies to meet increasingly stringent regulatory requirements and the expectations of investors and other stakeholders more effectively.
Accurate and timely financial reporting, supported by AI, has the potential to foster trust among stakeholders and strengthen corporate governance practices. For investors, in particular, the ability to rely on clear, data-driven insights should enhance confidence in a company’s management and operations.
Almasarwah, A., Al-Wreikat, A., Marei, Y. and Alsharari, N. (2024) ‘AI’s influence on corporate transparency and financial performance: a new era‘, Int. J. Behavioural Accounting and Finance, Vol. 7, No. 3, pp.233-253.