Key impact points:
- 96% of global CFOs are concerned about the reliability of business reporting data
- More than half of investors (57%) believe AI could assess the credibility and accuracy of data.
- Finance executives are concerned about AI costs and compliance, but recognize its potential.
Finance executives around the world are grappling with concerns about the integrity and reliability of non-financial data in corporate reporting, according to the EY 2024 Global Corporate Reporting Survey. A staggering 96% of finance leaders express concern that their organization’s non-financial data is not suitable for supporting decision-making, citing issues with data formats (39%) and inconsistencies (35%).
Half of financial executives surveyed fear that organizations will miss vital sustainability goals in the years to come. Only 47% of financial executives and 53% of investors believe that most companies are on track to achieve their stated goals. Attention to non-financial value drivers is intensifying, with 69% of finance executives seeing more investor inquiries on these issues compared to two years ago.
“This is a tumultuous time for all business leaders and CFOs are no exception,” says Myles CorsonEY global and US strategy and markets leader, financial accounting consulting services. “The task of guiding an organization through short-term volatility while keeping a firm hand on long-term growth relies largely on the finance function’s effective use of data to build a clear picture of plans and future prospects. But it is clear that there are significant concerns among CFOs and the investment community around data transparency and non-financial information, which they cannot afford to ignore.
Investors hope new reporting standards could improve sustainability disclosures, with 78% believing new regulations could have a positive impact. However, more than half of finance executives (55%) expect the costs to be onerous, and 44% say compliance with the new rules will be very complex.
“Financial executives’ apprehensions about companies’ ability to meet crucial goals underscore the growing importance of building confidence in reporting on sustainability efforts,” says Nicolas LecoqEY global leader in financial accounting consulting services. “Customers, shareholders, regulators and investors are increasingly demanding that companies report on their environmental impact and commitment to sustainable practices. This means that the integrity of corporate reporting is now more critical than ever: it reflects an organization’s commitment to its sustainability goals and can have a direct impact on the trust that investors, and the general public , are ready to invest in it.
Amid these concerns, more than half of investors (57%) believe AI could play a key role in assessing the credibility and accuracy of financial and non-financial information. Additionally, 52% believe AI could evaluate alternative data, and 51% believe it could help detect discrepancies in information disclosed by companies.
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While 43% of finance leaders are excited about using AI in business reporting, 29% are waiting until the risks are better understood. Concerns about costs (39%) and compliance with AI-related rules and regulations (36%) persist. Only 32% say they have high-quality technology to manage and analyze data.
“While no one can claim that there is an easy path, there are certainly ways in which organizations can successfully navigate challenges,” adds Corson. “Financial leaders who focus on creating sustainable value and building confidence in reporting and leveraging technology to enrich data analysis can rest assured that they are moving in the right direction.
Lecoq agrees: “While AI is still in the early stages of adoption, and while it is clear that many financial executives are nervous about potential costs, compliance and broader possible risks, there is no doubt about its immense potential to transform data analysis and business reporting for the benefit of all. »
For more detailed information, refer to EY 2024 Global Corporate Reporting Survey.