CCI staff share recent surveys, reports and analysis on risk, compliance, governance, infosec and leadership issues. Share details of your survey with us: editor@corporatecomplianceinsights.com.
AI deployment is near-unanimous, but governance lags
The use of AI to inform at least one financial estimate or judgment reviewed by auditors is almost unanimous, according to a survey by BDO.
The survey of 200 financial leaders at US organizations found that 99% used AI to generate or inform at least one financial estimate or judgment reviewed by its external auditor. A majority (62%) said their companies are using the technology to calculate cash flow or earnings forecasts, while about 55% reported their organizations use AI for tax provisions or deferred tax calculations and fair value measurements or asset valuations.
Despite the ubiquitous deployment of AI, confidence in auditing its output isn’t as high, the survey found. Less than half of respondents (49%) said they had the documentation and processes needed to explain and substantiate all AI-assisted outputs. Another 46% can explain most outputs with some gaps, bringing up the prospect that AI use is outpacing governance, documentation and evidentiary needs.
The survey also found that financial leaders see value in more continuous, year-round auditing, citing potential benefits like earlier risk identification, fewer year-end surprises and quicker insight into financial reporting issues. However, only 6% said their organizations were ready for that change. The issues stopping them: moving to continuous auditing would require better internal data infrastructure (71% of respondents), stronger AI governance (63%), clearer regulatory guidance (62%), greater auditor capability in continuous auditing methods (57%) and lower costs (48%).
70% of compliance & sustainability specialist rely on spreadsheets
A global survey by Assent and Germany’s Pforzheim University of 131 specialists and managers across automotive, electronics and other industries found that 70% manage product compliance in spreadsheets.
Filling out spreadsheets is eating up time, the survey found. Of the respondents, 69% said they spend up to two hours a day on manual, repetitive tasks.
Data problems are also a major hurdle. Almost three in five (57%) named incomplete data and data integrity as their greatest challenge in meeting compliance and sustainability reporting requirements, while 55% said poor data quality and timeliness keep their supply chain carbon data from meeting their own standards.
More than 50% of tax departments are under-resourced
The majority of companies’ tax teams don’t have the resources they need, according to a survey by the Thomson Reuters Institute and the Tax Executives Institute.
A survey of 244 senior decision-makers in corporate tax departments found that 53% said their teams are under-resourced, lacking the employees and money needed to optimize their jobs. It’s the third year in a row that more than half of respondents reported that they lack resources. Among under-resourced departments, the most common reason given was that workload had grown faster than they could recruit (33%), while 19% said they didn’t request a larger budget because they didn’t expect it to be approved.
The scarcity might be affecting perceptions of tax departments, according to the survey. Nearly three-fourths (73%) of tax leaders said their departments are viewed primarily as a cost center, or at best an even split between cost center and value creator, despite them believing they’re building a value narrative for senior leadership. But CFOs might not even be getting that value message: The CFOs surveyed ranked audit/dispute outcomes (50%), tax authority audits opened (44%) and tax penalties incurred (41%) as the metrics most regularly reported to them. All those are downside-avoidance measures. So whether the tax department is a cost center or value creator is being determined by different scorecards by tax teams and CFOs, the survey concluded.
