In an era where environmental, social, and governance (ESG) reporting has emerged as a critical avenue for companies to demonstrate their commitment to sustainability, the demand for reliable and transparent ESG reports has never been greater. However, the landscape of ESG assurance remains relatively uncharted, with research in this area still in its infancy.
The paper Using Artificial Intelligence in ESG Assurance by Nichole Li, Meehyun Kim, Jun Dai, and Miklos A. Vasarhelyi, published in the Journal of Emerging Technologies in Accounting, addresses the complexities inherent in ESG assurance, which presents more challenges than traditional financial auditing due to the diverse range of subjects and types of information contained in ESG reports.
To navigate these challenges, the authors propose the integration of artificial intelligence (AI) technologies and exogenous data as potential solutions. They articulate how AI can significantly enhance both the efficiency and effectiveness of the ESG assurance process by enabling the assessment of vast and intricate data sets. This innovative approach not only streamlines the assurance process but also helps ensure that the quality of ESG reports meets the growing expectations of stakeholders.
The paper delves into the application of AI throughout the entire ESG assurance process, highlighting its role in improving the quality of assurance services. By leveraging AI, auditors can more effectively analyze and interpret complex data, ultimately leading to higher-quality ESG assurance outcomes.
Furthermore, the authors provide practical implications for auditors, regulators, and stakeholders, emphasizing the importance of adopting advanced technologies to bolster the credibility of ESG reporting. As companies increasingly prioritize sustainability, the integration of AI into ESG assurance practices will be vital for maintaining transparency and trust.
For those interested in the evolving intersection of technology and sustainability, this paper contributes valuable insights into how AI can transform ESG assurance. To read the full article and explore its findings, visit the Journal of Emerging Technologies in Accounting here.