The use of AI in UK corporate reporting is increasing, but uptake across the market remains measured and inconsistent, according to new research commissioned by the Financial Reporting Council (FRC).
The study indicates that generative AI is starting to gain ground, especially in narrative reporting, while its application in financial statements is still relatively limited.
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The study was carried out by Lancaster University, with a research team that included academics from Loughborough University.
The work forms part of the FRC’s efforts to understand how technology and changing business models are affecting the reporting environment.
The FRC said it was encouraged by the strong level of interest among market participants in how technology could influence the future of reporting and disclosures.
The findings show that companies are starting to introduce AI and other technologies into reporting processes.
However, most current use is concentrated in lower-risk and task-specific work. Areas that require significant professional judgement have seen far less adoption.
Those preparing reports pointed to trust, data quality, governance arrangements and worries over legal, reputational and stakeholder risks as the main obstacles to broader adoption.
The research also found that many respondents believe the emphasis investors and other users of corporate reports place on authenticity, as well as accuracy and accountability, is leading companies to move carefully when considering AI in higher-judgement aspects of reporting.
In June this year, the FRC made changes to three auditing standards in order to make reports concise and user-friendly for investors.
