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FRC Lab report on artificial intelligence in corporate reporting

  • FRC (United Kingdom Financial Reporting Council) Image

Jan 22, 2019

In January 2019, the Financial Reporting Lab of the UK Financial Reporting Council (FRC) published a new report that considers how technology might impact the production, distribution and consumption of corporate reporting.

The report explains what artificial intelligence (AI) is, where its use might make sense in corporate reporting, and explores some of the possible and current use cases for the technology. For each use case it considers what is currently being achieved and what might be achieved in the future. The report finds:

  • Production – AI can enhance efficiency by replacing mechanistic human processing of underlying transactions and transforming that data into accounting and management information; ultimately feeding into annual reports.
  • Distribution – AI can support auditors and boards in the internal and external validation processes needed to ensure that the annual report is credible and compliant in an efficient and effective way.
  • Consumption – Investors are already using AI to enhance effectiveness of investment analysis by extracting meaning and value, not only from company reporting, but also from various sources of alternative data.

Overall, the report concludes hat it is not a question of whether AI will become important for corporate reporting, but when.

Review the report Artificial Intelligence – How does it measure up? on the FRC's website.

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