From potential to practice: AI’s real-world impact on the controllership function

By Bradley Niedzielski, Audit & Assurance Partner, Deloitte & Touche LLP; Cameron Andriola, Audit & Assurance Accounting and Reporting Advisory (ARA) Senior Manager, Deloitte & Touche LLP; Lisa Alden, Audit & Assurance ARA Senior Manager, Deloitte & Touche LLP; and Maggy Kozman, Audit & Assurance ARA Senior Manager, Deloitte & Touche LLP

Talking points

• Generative AI (GenAI) technology is being introduced as embedded functionality within solutions already widely used for close, consolidation, and reporting (CCR) processes, providing controllership teams with greater opportunities to streamline processes.
• GenAI in financial reporting and close processes stands to create less labor-intensive and more efficient processes.
• Deloitte can advise you on the systems and leading practices that can transform your CCR environment.

Over the past year, the artificial intelligence use cases we’ve explored in multiple editions of The Pulse have evolved from promising possibilities to transforming the industry as we know it.

At the end of last year, we highlighted the potential of autonomous GenAI tools to streamline controllership functions, such as the financial close (see “How Generative AI can serve as a catalyst for an autonomous close process”). Now, we’re diving into a couple use cases where we’re witnessing clients leverage GenAI-enabled tools embedded within technology already widely used to build upon efficiencies gained and further overcome inherent challenges in financial reporting and close processes. The impact of GenAI is no longer theoretical; GenAI tools are more at our fingertips than ever, driving greater efficiency and innovation.

GenAI solutions for financial reporting

Let’s explore the reality of the day-to-day financial reporting process, which is often heavily reliant on manual tasks. Reporting bottlenecks often occur when the transition from general ledger detail to consolidated financial statements involves multiple source systems, fragmented workstreams, complex manual account mapping, and the need to evaluate variances.

Fortunately, reporting teams can leverage advanced accounting and reporting technology to enhance these fundamental processes. By using technology like Workiva for financial reporting, teams can integrate enterprise resource planning (ERP), general ledger (GL), and other source systems upfront; create one streamlined workflow with version control; and take advantage of automation capabilities for calculations, data consolidation, and real-time reporting, ultimately improving accuracy and efficiency.

Now, incorporating technology in the reporting process offers even more advantages. Widely used solutions like Workiva are introducing new GenAI functionalities within core features like spreadsheets, documents, and presentations, taking the benefits of the application a step further from streamlining data/workflows to improving or even creating the first draft of some content. A few common use cases include:

• Creating initial drafts of narrative sections in financial reports based on financial data inputs.
• Producing charts and graphs to visually summarize key financial metrics, enhancing report readability.
• Analyzing financial data to identify and highlight significant trends.

GenAI and financial close

The financial close and consolidation process, much like financial reporting, is reliant on numerous manuals and complex tasks that can often lead to bottlenecks and delays. These complexities can emerge during data collection and validation, intercompany reconciliation, adjustments and journal entries, currency conversion, and other essential close and consolidation activities.

Technologies like BlackLine have been available to assist for years, creating efficiencies with functionalities such as automated data import, real-time data validation, automated match capabilities for intercompany transactions, and consolidation features for financial data from multiple countries.

With the integration of GenAI tools into close and consolidation technologies like BlackLine, controllership teams are empowered to achieve even greater efficiencies through advanced capabilities, such as:

• Detecting anomalies and potential errors in real time, allowing for quicker resolution and reducing the risk of inaccuracies.
• Automatically flagging and prioritizing exceptions during error handling tasks and providing recommendations for resolution based on historical data and patterns.
• Generating initial drafts of material variance explanations based on analyzing underlying transaction details and identifying key drivers of fluctuations.

GenAI and managing risks

It’s important to note that using GenAI in accounting and reporting poses unique risks in addition to the benefits discussed here, such as the possibility of producing unreliable results or “hallucinations” if, for instance, there is blind trust in AI-generated outputs. As we continue to explore the vast potential of GenAI, adopting a “human-in-the-loop” approach—in which ultimate outputs are validated through human competencies—will be essential in maintaining data integrity and achieving reliable, high-quality results.

What role can Deloitte play?

GenAI technology is expected to rapidly transform financial processes in the near future, and the beginning is already here. In this discussion, we’ve highlighted a sample of technologies paving the way, and together with leading Deloitte innovations such as Zora AI™, AIOPS.D™, C-Suite AI™, and others, GenAI is well on its way to becoming a core part of the controllership function landscape.

To maximize GenAI tools for financial controllership, it’s essential to engage a team that understands the complexities associated with automating finance processes and has the experience to implement GenAI technology strategically, thoughtfully, and effectively. A potential risk mitigation strategy based on Deloitte’s Trustworthy AI™ framework is also important to harness GenAI’s benefits while keeping risks in check. To learn more, please reach out to us or your preferred Deloitte Audit & Assurance representative, or visit our page.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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