The Role of Generative AI in Enhancing Financial Reporting Transparency and Accuracy
DOI:
https://doi.org/10.56830/IJAMS04202602Keywords:
Artificial Intelligence, Financial Report, Modern GovernanceAbstract
Generative Artificial Intelligence (GAI), particularly large language models such as ChatGPT, Bard, and Claudey, is transforming financial reporting through improvements in the clarity, consistency, and traceability of narrative disclosures. GAI relies on deep neural networks that have been trained on vast amounts of data to produce coherent content tailored to specific needs; this also enhances transparency by allowing generated text to be linked back to original inputs for purposes of auditability and error reduction. The capability of GAI to synthesize information from multiple sources improves the accuracy of disclosures by enabling anomaly detection and scenario modeling for full risk assessment and sensitivity analysis. These developments meet the ever-increasing demand for accurate and dependable financial narratives while simultaneously addressing issues of complexity and managerial subjectivity. However, the integration of GAI into financial reporting requires an appropriate governance framework with risk management and compliance mechanisms in place to ensure adherence to accounting standards as well as regulatory requirements to protect data integrity, model quality, etc. This paper highlights developing context-specific governance policies for mitigating operational and reputational risks when AI is deployed in financial services. Future research opportunities may include improving generative AI architectures, investigating audit methodologies, and studying stakeholder acceptance. In summary, GAI holds transformative promise for enhancing financial transparency and accuracy by providing advanced means for disclosure preparation and corporate reporting decision-making.
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