Development of Accounting Practices and Disclosure in the Light of the Shift towards Artificial Intelligence

Abstract

 The purpose of this research is to contribute to the development of the accounting process and disclosure in the context of the disruption that brings in artificial intelligence by providing an integrated framework, from the perspective of internal development of accounting processes to the external requirements of the disclosure. The framework is based on the following five pillars: digital transformation policies; influence of artificial intelligence on the quality of accounting information; basic principles of intelligent models; governance mechanisms; and related risks. This is a descriptive and analytical study. It discussed the theoretical background and accounting implications of artificial intelligence, proposed a disclosure framework, and then it utilized content and gap analysis to determine to what extent the considered annual report met the requirements of the frameworkThe above analysis was based on the 2024 annual report of Asiacell Communications Company-Private Joint Stock Company. The disclosures of artificial intelligence, digital transformation, applications in accounting and finance, information quality, governance, and technological risk were selected and analyzed together with 24 disclosure items based on the proposed framework. The findings show a large disparity between the technological sophistication of the company and its level of accounting disclosure on artificial intelligence. The fermentations described in the present disclosure examples were at 25%, but only 25% of the disclosures were reached, and disclosures of assumptions underlying predictive models and related risks were missing. The results also suggest that the introduced framework, if adopted, would cover all the 24 disclosure items with a maximum proposed disclosure score of 100%.Also, based on model assumptions, data sources, levels of confidence, responsibilities in governance, and procedures for verification, transparency would be increased, the credibility of accounting estimates would be strengthened, the level of information uncertainty would be decreased, and the level of investor confidence in financial reports produced in an artificial intelligence milieu would be enhanced