Corporate Reporting Trends
As markets evolve and investors seek information outside of financial statements to make critical decisions, public company auditors are bringing assurance to emerging reporting areas. The CAQ provides resources to keep all members of the financial reporting ecosystem up to date on trending topics in corporate reporting, including emerging technologies like AI.
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The corporate reporting landscape is ever evolving, and auditors continue to adapt to meet challenges and changing priorities in real time. The CAQ periodically develops resources that help all members of the financial reporting ecosystem stay current on these trends.
AI and the Future of Corporate Reporting
Artificial intelligence (AI) is transforming how companies operate and report information to investors. From process automation to predictive analytics, AI is being applied across business functions to improve efficiency, enhance decision-making, and enrich customer experiences. While AI is transforming businesses, it is also giving rise to new challenges and concerns that public companies need to navigate. One of the primary issues noted by both internal and external stakeholders is the lack of trust in the technology.
Auditors play a critical role in ensuring that AI-driven systems and outputs are trustworthy and transparent, and they apply AI technology throughout the audit process for enhanced reporting. Their oversight of AI helps reinforce investors’ confidence and keep our capital markets strong. That's the Audit Effect, building trust in the information that fuels our economy.
CAQ resources, including The Role of the Auditor in AI: Present & Future, help stakeholders understand:
- How companies are using AI in operations, financial reporting, and risk management
- Public disclosures and voluntary frameworks for AI governance
- Emerging assurance services that can enhance trust in AI systems
Erin Cromwell, CPA, Senior Manager of Professional Practice at the CAQ, answers how auditor assurance enhances confidence in AI systems and outputs.
Emerging Technologies
Investors and other stakeholders increasingly expect transparency on how companies integrate emerging technologies and innovations into their strategies. Technologies such as blockchain, digital assets, and AI are redefining financial reporting, audits, and risk management. Companies are considering how they can integrate digital assets, such as crypto and bitcoin, into their operations and investment portfolios. While these tools can streamline business operations and corporate reporting, they also introduce new risks that companies must carefully manage.
Auditors provide critical and irreplaceable human oversight to ensure these technologies are used responsibly, asset transactions are appropriately accounted for, and technology-driven outputs are reliable so investors can trust the information delivered by public companies.
Audit leaders explore the impact of technology on the audit and our capital markets.
Noncompliance with Laws and Regulations (NOCLAR)
Auditors can come across instances of non-compliance with laws and regulations (NOCLAR) during the course of their audit. What is the auditor’s role concerning NOCLAR? This is a developing area as the PCAOB has proposed amendments to its auditing standards.
Existing Priorities
Auditors provide stakeholders with reliable, decision-making and useful information, supporting the flow of high-quality, comparable financial reporting. Key areas include:
- Non-GAAP financial measures: Used for valuations, executive compensation, and communicating strategy
- Key Performance Indicators (KPIs): Provide additional insights into company performance
In times of uncertainty and market volatility, these tools remain critical to transparent and effective communication with investors and other stakeholders.
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