KPMG's survey reveals a surge in AI adoption among Canadian companies for more insightful financial reporting
A survey from KPMG in Canada reveals that most Canadian companies (87 percent) are already exploring the use of Artificial Intelligence (AI) in financial reporting, surpassing the global average of 72 percent.
However, despite this interest, a significant majority (73 percent) are still in the pilot stage, with only 14 percent implementing AI either selectively or widely in their financial operations—compared to 33 percent globally.
Kristy Carscallen, Canadian managing partner of Audit and Assurance at KPMG in Canada emphasized the transformative potential of AI, automation, and data analytics in enhancing the quality of financial reporting for various stakeholders.
“The future of financial reporting is here,” she stated, underscoring the importance of embracing these technologies to achieve deeper insights and greater transparency.
The survey, which included 1,800 companies across ten major markets, including Canada, shows strong expectations for AI integration into financial processes. Canadian companies are particularly bullish, with all respondents anticipating the use of AI in their financial reporting within the next three years.
Key findings also show that 59 percent of Canadian organizations allocate more than 10 percent of their IT budget to AI, compared to 45 percent of their global peers. Additionally, the use of Generative AI in financial reporting is expected to triple in the next year, from 13 percent to 35 percent.
Canadian companies recognize several benefits of AI in financial reporting, such as the ability to predict trends and impacts (75 percent), make better data-enabled decisions (66 percent), and enhance data accuracy and reliability (61 percent).
This adoption is translating into greater productivity and necessitates increased focus on talent acquisition and skills development.
Despite these advancements, challenges remain, including regulatory compliance, skills gaps, and data security concerns.
The most significant obstacles to AI adoption in Canada are regulatory and compliance changes (60 percent), limited skills and talent (59 percent), and concerns about data security and privacy (58 percent).
Companies prioritize transparency and data privacy when adopting AI, but sustainability and explainability of AI applications are seen as the biggest blind spots, highlighting the need for robust AI governance frameworks.
Bryant Ramdoo, partner and Audit Innovation leader at KPMG in Canada, advocates for a careful approach to AI integration.
“Businesses need to invest in AI technologies and upskill their entire organization to get ready for Gen AI-powered financial reporting and auditing,” he remarked, emphasizing the need for a values-driven, human-centric approach to ensure safe and successful technology adoption.
The survey also reveals that Canadian firms are ahead of their global counterparts in piloting Gen AI technology, with 45 percent already testing these tools, compared to 30 percent worldwide. Moreover, 88 percent believe Gen AI will soon be a common practice among auditors.
Looking forward, companies expect their external auditors to leverage AI to improve audit accuracy, develop more proactive and predictive processes, and enhance data gathering and insights.
Additionally, 82 percent of companies anticipate a more detailed review of their AI usage by auditors in the future, indicating a significant role for auditors in ensuring the robust and compliant use of AI in financial reporting.
“As AI adoption accelerates, there is a call to action not just for companies, but for all parties in the reporting ecosystem to move forward together to understand and carefully manage the associated risks,” said Carscallen.
