Finance leaders are turning to artificial intelligence to combat crisis of confidence in corporate reporting, according to a survey by EY.
The 2024 EY Global Corporate Reporting Survey, which polled more than 2,000 finance leaders and 815 institutional investors, found that fears about the integrity and reliability of crucial corporate reporting data are weighing on the minds of finance leaders, but they are seeing hopes that AI may bring in the answers they need.
Among the key findings from the study is an almost universal concern among finance leaders that the nonfinancial data produced by their organisations is not fit for purpose to support decision-making.
Ninety-seven percent of the surveyed finance leaders in Singapore say they worry about the integrity and reliability of this data, and many have reported problems with data formats and inconsistencies.
The findings of the EY survey raise additional concerns on corporate reporting standards, as they expose fears over the impact that poor data may have on important global goals.
At least a third of those surveyed are extremely worried that organisations will miss vital sustainability targets over the coming years, while 65% of surveyed finance leaders in Singapore and 53% of investors believe that most corporates are on track to achieve stated goals.
The survey shows that the focus by stakeholders on nonfinancial drivers of value is growing, with the 81% of finance leaders in Singapore saying that they have noticed investors asking more questions about these issues than they did two years ago.
Sixty-eight percent of those polled in Singapore are fearful that allegations of greenwashing could be leveled against companies in their various industries, highlighting underlying doubts that nonfinancial disclosures are backed up by the necessary due diligence, data and processes.
Meanwhile, investors are hopeful that new reporting standards could help businesses’ efforts to improve sustainability disclosures – 83% of investor respondents in Singapore say they think new regulations could have a positive impact.
However, finance leaders seem to have worries, with 64% of surveyed finance leaders in Singapore say they expect costs to be burdensome, and 58% believe that meeting the new rules would be highly complex.
