The Impact of Artificial Intelligence Adoption on the Quality of Financial Reports on the Saudi Stock Exchange

Abdulkarim Hamdan J. Alhazmi (), Sardar M. N. Islam and Maria Prokofieva
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Abdulkarim Hamdan J. Alhazmi: Institute for Sustainable Industries & Liveable Cities (ISILC), Victoria University, Melbourne, VIC 3000, Australia
Sardar M. N. Islam: Institute for Sustainable Industries & Liveable Cities (ISILC), Victoria University, Melbourne, VIC 3000, Australia
Maria Prokofieva: College of Business, Victoria University, Melbourne, VIC 3000, Australia

IJFS, 2025, vol. 13, issue 1, 1-38

Abstract: The aim of this study was to explore how artificial intelligence (AI) impacts the quality of financial reporting, providing insights into new opportunities in this field for the Saudi context. This study employed the UTAUT theory to examine the adoption of AI technology in auditing practices. This study also utilized bibliometric analysis techniques through an academic literature review and content analyses of the documentary evidence. The implication of this study is that non-Big 4 audit firms should adopt AI-powered drones, which consequently enhance decision making, decrease audit fees, and enhance the quality of financial reports, and the efficiency and accuracy of audits. Furthermore, this paper recommends that non-Big 4 audit firms adopting AI should foster a culture of change to ensure quality audits and consistency, overcome resistance to the change, and support the integration of technologies such as AI-driven audit automation. Our study also indicated the importance of integrating AI with the IFRS, developing a new framework for AI in auditing practices, incorporating AI into auditing courses, and modernizing auditing using AI. These implications lead to financial reports of enhanced quality. The results indicated four clusters, with artificial intelligence being the most significant keyword occurrence. This study has limitations, such as the lack of consideration of cyber-attack risks on drones, which may reduce the reliability of financial reports. Based on the findings of this research, audit companies and regulatory agencies in Saudi Arabia, like the Saudi Capital Market Authority (CMA), may evaluate the integration of AI to improve the quality of financial reporting. Implementing AI is expected to enhance the quality of audits, automate reporting, and support regulatory compliance to foster confidence and transparency in the financial industry.

Keywords: artificial intelligence; drone; auditing; quality of financial reports in Saudi Arabia; unified theory of acceptance and use of technology (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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