The use of AI in corporate reporting in the UK is increasing, but adoption across the market remains unmeasured and inconsistent, new research commissioned by the Financial Reporting Council (FRC) has found.
This study shows that while generative AI is becoming more prevalent, especially in narrative reporting, its application to financial statements is still relatively limited.
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The study was carried out by a research team including academics from Lancaster University and Loughborough University.
This research is part of the FRC’s efforts to understand how changes in technology and business models are impacting the reporting environment.
The FRC said it is encouraged by the strong interest among market participants in how technology will impact the future of reporting and disclosure.
The findings show that companies are beginning to incorporate AI and other technologies into their reporting processes.
However, most of its current use is focused on low-risk, task-specific work. Fields that require significant professional judgment are far less likely to be hired.
The report authors identified concerns about trust, data quality, governance structures, legal risk, reputational risk, and stakeholder risk as key barriers to widespread adoption.
The survey also found that many respondents believe that companies are becoming more cautious when considering AI in the higher-level judgment aspects of their reports, as investors and other users of company reports value reliability as well as accuracy and accountability.
In June, the FRC made changes to three auditing standards to make its reports more concise and easier to use for investors.
