Disruption caused by the pandemic is allowing finance leaders to “rethink the role of their function” and how corporate reporting can be structured and delivered, according to EY.
The firm’s sixth annual EY Financial Accounting Advisory Services (FAAS) survey of more than 1,000 CFOs and financial controllers shows that finance leaders anticipate their function to “look very different” in the future, with a major shift to a smarter operating model.
Some 53% of respondents thought it was “likely” that more than half of the finance and reporting tasks currently performed by people will be executed by AI over the next three years. A further 54% think it is likely that blockchain-based systems will underpin finance going forward.
To make the most of these smart technologies, respondents identified building trust as a “key prerequisite”, with 68% stressing that governance, controls and ethical frameworks still need to be developed and refined for AI.
Without those frameworks, 63% of respondents are concerned about the risk implications of using AI in finance and reporting. In addition, many did not have complete trust in the output of these systems, with 47% saying that the quality of the finance data produced by AI cannot be trusted in the same way as data from traditional finance systems.
As organizations look to adopt a longer-term perspective and focus on long-term value creation, the survey found that 72% of CFOs and financial controllers are embracing this shift, however.
In addition, 69% of respondents say that CFOs and senior finance leaders are increasingly seen by key stakeholders as the stewards of long-term value in their organization.
Respondents also reported that stakeholders are also looking for new insights on nonfinancial factors of corporate reporting, such as environmental, social and governance (ESG) data (55%).
Tim Gordon, EY Global Financial Accounting Advisory Services leader, said: “The Covid-19 pandemic has accelerated the transformation of finance functions and made the use of smart technologies increasingly the norm.
“The challenge for finance leaders now is to map out how finance and reporting are to be delivered in this new reality. Building trust into smart technologies can unleash a tech-powered future for finance functions, where digitally savvy people work seamlessly with smart machines to provide the forward-looking insights that stakeholders require.”
He added: “Finance leaders should rethink the role that reporting is expected to play in helping to tell the story of the value that the enterprise creates. If finance fails to play a central role in meeting these changing expectations, reporting could become increasingly irrelevant.
“There is an opportunity for finance leaders to establish their functions as a source that can provide what is expected by the business, with the speed and flexibility required.”