The Influence of Artificial Intelligence Adoption on Financial Reporting Accuracy among Selected Firms in Livingstone, Zambia

Abstract

Artificial Intelligence (AI) has increasingly transformed accounting and financial reporting through automation, enhanced data processing, error detection, and improved reliability of financial information. This study examined the influence of Artificial Intelligence adoption on financial reporting accuracy among selected firms in Livingstone, Zambia. The study specifically sought to assess the level of AI adoption in financial reporting, determine the relationship between AI adoption and financial reporting accuracy, and examine the effect of AI adoption on financial reporting accuracy. The study was underpinned by the positivist philosophy and employed a deductive approach and quantitative cross-sectional research design. Data were collected using structured questionnaires from a sample of 60 accounting and finance professionals selected through purposive and stratified sampling techniques. Data were analysed using descriptive statistics, Pearson Product-Moment Correlation and regression analysis. The findings revealed a high level of AI adoption, with an overall mean of 3.90. A strong, positive and statistically significant relationship was established between AI adoption and financial reporting accuracy (r = 0.700, p < 0.001). Regression analysis further established that AI adoption significantly influenced financial reporting accuracy, explaining 49.1% of its variation (R² = 0.491, p < 0.001). The five AI dimensions collectively explained 58.4% of the variation, with Natural Language Processing emerging as the significant unique predictor. The study concluded that effective AI adoption significantly enhances financial reporting accuracy. It recommended increased investment in AI technologies, continuous professional training, improved technological infrastructure, stronger cybersecurity and data governance, clear AI governance frameworks, and continued human oversight to enhance accurate and reliable financial reporting.