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Original research PERCEPTIONS AND EFFECT OF ARTIFICIAL INTELLIGENCE ADOPTION ON FINANCIAL REPORTING QUALITY AMONGST NSUNGWI MARKET SMESPages 185-198 Abstract
The article provides insights and outcomes of artificial intelligence (AI) adoption on financial reporting quality. The target were small and medium enterprises in Nsungwi market of Lilongwe, Malawi. A convergent mixed methods research design was used. The survey questionnaires were administered to 80 respondents while 20 participants selected through a purposive sampling technique were interviewed. The results of Cronbach’s Alpha, AVE and CR tests indicated that the constructs used in the study had high reliability. In addition, the thematic analysis of the qualitative data revealed that the use of AI in financial reporting helps detect fraud, anomalies and enhance trustworthiness of financial statements. Further, the analysis of the reports on oversight also revealed that the use of AI improves adherence to acceptable auditing practices in Malawi, promote sustainability of SMEs and improve tax clearance of these enterprises. The study could not ascertain a specific percentage improvement in terms of financial reporting quality due to the sample used, which was limited to one locality. However, the responses were very insightful and scored very high, with a correlation of around 33%. Therefore, based on the high affirmative scores for AI, it is of necessity to agree that AI improves reporting quality to a high extent. The study also suggested a need for the Government to subsidise internet services. It should also localise these AI packages and educate the SMEs on the benefits of adopting the use of AI in their respective enterprises. The study conclusively established that AI adoption has been an eye opener to most SMEs who are now considering adopting it in their enterprises, thus refining financial reporting quality.
Keywords:
Artificial Intelligence, Perception, Financial Reporting, IFRS, SME.
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Temwa Msiska, 
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