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Artificial intelligence is gaining ground in the digitalisation of accounting – but still holds a lot of potential

The PwC study “Digitalisation in Finance and Accounting 2023” shows that almost 60 per cent of the companies surveyed are currently driving forward a comprehensive transformation of their finance function. Staff shortages and regulatory requirements are putting increasing pressure on the integration of technologies. Interestingly, just under 20 per cent of respondents stated that they would allow complete data extraction as part of the audit.

The majority of companies surveyed by PwC Germany are working on the comprehensive digital transformation of their finance and accounting systems – almost 60 per cent stated this. Artificial intelligence (AI, 62%) is an important topic in more than one in two companies. These are some of the results of the current study “Digitalisation in Finance and Accounting 2023” by PwC Germany. For this study, PwC surveyed 100 large and medium-sized companies in Germany on the use and potential of modern technologies in finance and accounting, including with regard to auditing.

Staff shortages and regulation are also increasing the pressure on technology

Two thirds of the companies surveyed have made progress in the use of technology in finance and accounting in the past year. Current market developments are likely to be reflected in the figures to a much greater extent than the increased use of technology due to the coronavirus pandemic: ERP systems and technologies such as process mining are increasingly available as cloud solutions. Increasing staff shortages and new regulatory requirements – not only, but especially in the area of sustainability – are increasing the pressure to use such systems more intensively.

"The time seems ripe for concrete AI solutions. Applications based on this technology can also play to their strengths in finance and accounting."

This is the case, for example, with checklist comparisons and the collection of information from unstructured data as well as the intelligent reading of texts; but also in order to preserve specific knowledge for the company.

Proportion of manual activities in consistency analyses at a consistently (too) high level

Powerful cloud-based solutions are an important prerequisite for digitalisation. Here, too, the study authors note significant progress: 19 per cent of companies have already switched to cloud-based ERP systems and 42 per cent are on their way to the cloud. “Data protection and security concerns are now largely obsolete because more and more solutions hosted and certified in Europe and Germany are available,” says PwC expert Prof Dr Rüdiger Loitz. Nevertheless, 37 per cent of those surveyed remain committed to on-premise solutions.

PwC asked about the proportion of manual activities. In the case of consistency analysis, for example – a task with great potential for automation in principle – this is at a consistently (too) high level: it has been around 40 per cent over the past five years. Hans-Peter Dittmar, responsible for digital transformation at PwC Germany, comments: “It is precisely in this area that companies could achieve significant efficiency gains without much effort.” The same applies to the use of technology for communication in connection with auditing and business processes.

"In our view, the potential still lying dormant there could be realised efficiently with process mining solutions, for example."

Around a fifth would allow full data extraction

According to the respondents, the automation of auditing will continue to increase: 58 per cent of them expect a degree of automation of 40 per cent or more over the next five years.

"This is a very ambitious figure - provided that companies standardise even more data and processes than before."

The motives for the digitalisation of the audit are striking: In addition to efficiency gains (89%) and future viability (76%), respondents also cite regulatory challenges quite frequently (55%).

Most companies also support a more data-based audit. However, they are prepared to provide the necessary data to varying degrees: Most do so for selected purposes. However, just under 20 per cent of respondents would be prepared to allow fully automated data extraction. “That’s a remarkably high figure. And indeed, such comprehensive data extraction helps to fully utilise the potential of high-performance technologies. As an auditor, PWC invested heavily in this area at an early stage and created the necessary conditions. Of course, the effect in individual cases always depends on the availability and quality of the imported data,” says Dietmar Prümm.

Digitalisation in finance and accounting 2023

PwC study: Progress and potential in the use of technology

Source: PWC

Source of Image: Pixabay

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