New research from the Financial Reporting Council (FRC) indicates that artificial intelligence is gaining traction in corporate reporting, although adoption remains cautious and varies considerably across the market.
The research found that generative AI is becoming an increasingly useful tool, particularly for narrative reporting, while its application in the preparation of financial statements remains relatively limited.
Conducted by Lancaster University in collaboration with academics, including researchers from Loughborough University, the study forms part of the FRC’s wider efforts to understand how technological developments and changing business models are influencing the corporate reporting landscape. The findings will help inform the FRC’s approach to ensuring regulation remains proportionate, effective and responsive to change.
The FRC also highlighted the strong interest among market participants in understanding how emerging technologies could influence the future of corporate reporting and disclosures.
Although businesses are starting to incorporate AI and other technologies into their reporting processes, most current applications are concentrated on specific, lower-risk tasks. Use remains more limited in areas that require substantial professional judgement.
According to the research, concerns around trust, data quality and governance, as well as potential legal, reputational and stakeholder risks, are among the main obstacles to broader adoption. Preparers also noted that investors and other users of corporate reports place significant value on authenticity, alongside accuracy and accountability. This is encouraging companies to remain particularly cautious when considering AI for areas involving greater judgement.
The findings will contribute to the FRC’s ongoing work, alongside initiatives such as the Audit Tech and AI Sandbox and continued engagement with stakeholders. Together, these efforts will help the FRC assess how regulation should evolve as technology continues to transform the corporate reporting environment.
Info obtained here
