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International Journal of Innovations & Research Analysis (IJIRA) [ Vol. 6 | No. 2(I) | April - June, 2026 ]

The Role of Generative AI in Financial Reporting and Decision-Making

Dr. Robert Neely

The advent of LLMs and GenAI can be seen as a structural change in the process through which financial organizations generate, interpret, and respond to financial information. This paper explores the multifaceted influence of genAI in the context of two primary activities: financial reporting, which includes the creation of automated financial statements, management’s discussion, and regulatory disclosures; and financial decision-making that includes credit risk analysis, portfolio management, forecasted profits, and valuation of mergers & acquisitions. Based on a systematic review of 214 peer-reviewed papers published from 2017 to 2024, a meta-analysis of 58 empirical data sets, and 12 comparative organization-level case studies involving banks, asset managers, insurance companies, and corporates finance, this research shows that integration of GenAI in the business process decreases the time required for narrative reporting by 68% on average (1) and increases the accuracy of decisions made for credit analysis and fraud detection use cases by 15-19 percentage points (2). At the same time, several important risks associated with the adoption of AI, including AI hallucinations of numbers, model biases in credit scoring, lack of explainability in the context of IFRS and SEC guidelines on disclosures, and data privacy concerns, are uncovered. The proposed Governance-Accuracy-Transparency (GAT) framework is offered as an action-oriented approach to responsible GenAI adoption in financial ecosystems.

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