Most Australian companies now using AI for financial processes

Three quarters of Australian companies are now using or piloting artificial intelligence in their financial reporting processes.

A new KPMG survey has found 100 per cent of Australian companies will be using artificial intelligence in its financial processes within a few years. Picture: Sebastien Bozon

Three quarters of Australian companies are using or piloting artificial intelligence in their financial reporting processes, according to a KPMG survey, with the number on track to increase to 100 per cent in just three years’ time.

The survey of 1800 publicly listed and privately owned business leaders across 10 countries, including 100 in Australia, finds AI is set to transform the role of accountants and auditors in financial reporting and auditing.

The 76 per cent of Australian respondents currently piloting or adopting AI is slightly higher than the global figure of 72 per cent, and puts the country third behind Canada and the UK.

Asked how much progress they expected their companies to make over the next three years, 89 per cent of Australian companies suggest AI will be adopted in their financial reporting, with the rest expecting to have at least reached a piloting stage.

Respondents say the greatest benefit from AI is currently in anomaly detection and pattern recognition, followed by robotic process automation, machine learning and deep learning.

However, the biggest leap over the next three years is expected to come in the use of generative AI, currently being used by just 9 per cent of Australian companies, but which more than half (52 per cent) say will be their top priority of all technologies in financial reporting by 2027.

KPMG Australia partner and global audit head of AI Shane O’Connor said the research showed Australia was at the forefront of global investment in AI technologies.

“This is particularly noticeable in sectors such as telecommunications, technology and finance, where AI investments are being made to enhance productivity, cut costs, improve customer experiences and develop new products and services,” he said.

“GenAI is now being prioritised for use in financial reporting, enabling companies to identify anomalies in financial data, generate customised financial reports, assess the efficacy of internal controls, pinpoint inefficiencies in core processes and benchmark disclosures across their organisations.”

Most of the Australian respondents to the survey (51 per cent) are currently allocating 10-20 per cent of their IT budgets to AI, but the level of investment is expected to surge over the next three years, with 58 per cent of respondents planning to increase their AI spend by at least 25 per cent over that time frame.

Companies surveyed by KPMG are also expecting their auditors to increase their investment in AI technologies, with three quarters saying the use of AI in external audits was moderately to very important, and 45 per cent wanting it to result in some form of real-time auditing throughout the year.

Mr O’Connor said while audit firms had been using AI in the development of their services for some years, emerging technologies were likely to shake up the industry.

“AI-powered audit solutions are revolutionising audit methodology, and as companies undertake their data transformation journeys, the audit process can also evolve from a periodic assessment to continuous real-time monitoring,” he said.

“Our survey shows that generative AI is the imminent next step for many companies, both here in Australia and globally.

“GenAI will take financial reporting to the next level of analytical excellence as it cannot only evaluate massive data sets and every transaction, highlighting anomalies, but can create audit reports from its analysis of data and tailor them to the needs of different stakeholders.”