The majority of finance leaders in Singapore are worried about the integrity and reliability of the non-financial data produced by their organisations. They have reported problems with data formats (30%) and inconsistencies (43%).
The recent report by EY raises additional concerns on corporate reporting standards as they expose fears over the impact of poor data on important global goals.
At least a third of those surveyed are extremely worried that organisations will miss vital sustainability targets over the coming years.
Most finance leaders in Singapore (81%) also highlighted that investors are asking more questions about non-financial drivers of value than they did two years ago.
Additionally, the report reveals that investor respondents are hopeful the new reporting standards could help businesses’ efforts to improve sustainability disclosures.
“Data is the heart of corporate reporting. Hence, it is understandable that stakeholders are concerned about the quality and value of the reporting. We are beginning to see finance leaders taking the initiative to drive quality and reliability of reporting by enhancing due diligence over processes and data and ensuring there is robust data lineage within the organisation,” says Ronald Wong, EY Asean and Singapore Financial Accounting Advisory Services leader.
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More than half of surveyed investors in Singapore believe artificial intelligence (AI) could play a key role in corporate reporting by assessing the credibility and accuracy of financial and nonfinancial disclosures (60%), evaluating alternative data (50%), and identifying discrepancies in company disclosures (48%).
While 68% of finance leaders in Singapore are eager to adopt AI in corporate reporting, they remain concerned about the potential costs and the challenges of ensuring compliance with AI-related regulations.
“As corporates owe a duty of care to stakeholders, it is important to understand the risks and ensure there is governance ringfenced around AI adoption. In the meantime, it is important to note how AI is progressing, observe how technology vendors incorporate it in their solutions, explore use cases, and assess how it can be leveraged and integrated into finance operations and technology ecosystems to fully harness its capabilities,” says Wong.
