IDEAS home Printed from https://ideas.repec.org/a/gam/jijfss/v13y2025i1p21-d1583237.html

The Impact of Artificial Intelligence Adoption on the Quality of Financial Reports on the Saudi Stock Exchange

Author

Listed:
  • Abdulkarim Hamdan J. Alhazmi

    (Institute for Sustainable Industries & Liveable Cities (ISILC), Victoria University, Melbourne, VIC 3000, Australia
    Department of Administrative Sciences, College of Applied Sciences, Northern Border University, Arar 91431, Saudi Arabia)

  • Sardar M. N. Islam

    (Institute for Sustainable Industries & Liveable Cities (ISILC), Victoria University, Melbourne, VIC 3000, Australia)

  • Maria Prokofieva

    (College of Business, Victoria University, Melbourne, VIC 3000, Australia)

Abstract

The aim of this study was to explore how artificial intelligence (AI) impacts the quality of financial reporting, providing insights into new opportunities in this field for the Saudi context. This study employed the UTAUT theory to examine the adoption of AI technology in auditing practices. This study also utilized bibliometric analysis techniques through an academic literature review and content analyses of the documentary evidence. The implication of this study is that non-Big 4 audit firms should adopt AI-powered drones, which consequently enhance decision making, decrease audit fees, and enhance the quality of financial reports, and the efficiency and accuracy of audits. Furthermore, this paper recommends that non-Big 4 audit firms adopting AI should foster a culture of change to ensure quality audits and consistency, overcome resistance to the change, and support the integration of technologies such as AI-driven audit automation. Our study also indicated the importance of integrating AI with the IFRS, developing a new framework for AI in auditing practices, incorporating AI into auditing courses, and modernizing auditing using AI. These implications lead to financial reports of enhanced quality. The results indicated four clusters, with artificial intelligence being the most significant keyword occurrence. This study has limitations, such as the lack of consideration of cyber-attack risks on drones, which may reduce the reliability of financial reports. Based on the findings of this research, audit companies and regulatory agencies in Saudi Arabia, like the Saudi Capital Market Authority (CMA), may evaluate the integration of AI to improve the quality of financial reporting. Implementing AI is expected to enhance the quality of audits, automate reporting, and support regulatory compliance to foster confidence and transparency in the financial industry.

Suggested Citation

  • Abdulkarim Hamdan J. Alhazmi & Sardar M. N. Islam & Maria Prokofieva, 2025. "The Impact of Artificial Intelligence Adoption on the Quality of Financial Reports on the Saudi Stock Exchange," IJFS, MDPI, vol. 13(1), pages 1-38, February.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:1:p:21-:d:1583237
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7072/13/1/21/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7072/13/1/21/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kevin W. Boyack & Richard Klavans & Katy Börner, 2005. "Mapping the backbone of science," Scientometrics, Springer;Akadémiai Kiadó, vol. 64(3), pages 351-374, August.
    2. Pomerol, Jean-Charles, 1997. "Artificial intelligence and human decision making," European Journal of Operational Research, Elsevier, vol. 99(1), pages 3-25, May.
    3. Benjamin P. Commerford & Sean A. Dennis & Jennifer R. Joe & Jenny W. Ulla, 2022. "Man Versus Machine: Complex Estimates and Auditor Reliance on Artificial Intelligence," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 60(1), pages 171-201, March.
    4. Philippe Mongeon & Adèle Paul-Hus, 2016. "The journal coverage of Web of Science and Scopus: a comparative analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 106(1), pages 213-228, January.
    5. Francesca Bartolacci & Andrea Caputo & Michela Soverchia, 2020. "Sustainability and financial performance of small and medium sized enterprises: A bibliometric and systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1297-1309, March.
    6. Vitali, Sonia & Giuliani, Marco, 2024. "Emerging digital technologies and auditing firms: Opportunities and challenges," International Journal of Accounting Information Systems, Elsevier, vol. 53(C).
    7. Nora Azima Noordin & Khaled Hussainey & Ahmad Faisal Hayek, 2022. "The Use of Artificial Intelligence and Audit Quality: An Analysis from the Perspectives of External Auditors in the UAE," JRFM, MDPI, vol. 15(8), pages 1-14, July.
    8. Ivy Munoko & Helen L. Brown-Liburd & Miklos Vasarhelyi, 2020. "The Ethical Implications of Using Artificial Intelligence in Auditing," Journal of Business Ethics, Springer, vol. 167(2), pages 209-234, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amir, Muhammad Sikander & Ali, Amjad & Audi, Marc, 2025. "Artificial Intelligence Investment and Firm Profitability: Evidence from Pakistan’s Financial and Audit Sectors," MPRA Paper 127314, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Delia DELIU, 2024. "Professional Judgment and Skepticism Amidst the Interaction of Artificial Intelligence and Human Intelligence," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 22(176), pages 724-741, October.
    2. Li, Yueqi & Goel, Sanjay, 2025. "Bridging IT auditors and AI auditing: Understanding pathways to effective IT audits of AI-driven processes," Advances in accounting, Elsevier, vol. 69(C).
    3. Favourate Y Mpofu & Queen Mpofu, 2025. "The application of digital technologies in external auditing: a double edged sword?," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 7(1), pages 39-56, January.
    4. Peters, Christian P. H., 2023. "The microfoundations of audit quality," Other publications TiSEM 6a2b12a5-6060-4544-883b-e, Tilburg University, School of Economics and Management.
    5. Liming Zhao & Chenli Yin, 2024. "Driving corporate social responsibility to be innovative: Insights from a systematic literature review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4115-4132, September.
    6. Pablo Sastrón-Toledo & Patricia Alonso-Álvarez & Jorge Mañana-Rodríguez, 2024. "Compliance with open access mandates and its effects on research visibility: the case of the Spanish National Plan of R&D," Scientometrics, Springer;Akadémiai Kiadó, vol. 129(4), pages 2057-2081, April.
    7. repec:bcp:journl:v:8:y:2024:i:10:p:2406-2413 is not listed on IDEAS
    8. Cecilia Correggi & Paolo Di Toma & Stefano Ghinoi, 2024. "Rethinking dynamic capabilities in light of sustainability: A bibliometric analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 33(8), pages 7990-8016, December.
    9. Lai, Jing, 2025. "Artificial intelligence applications and audit fees: An empirical study," International Review of Economics & Finance, Elsevier, vol. 103(C).
    10. Carmen Elena Stoenoiu, 2025. "Perspectives on the development of digital techniques and tools with implications for accounting and financial audit services," GATR Journals jfbr232, Global Academy of Training and Research (GATR) Enterprise.
    11. Maribel Vega-Arce & Gonzalo Salas & Gastón Núñez-Ulloa & Cristián Pinto-Cortez & Ivelisse Torres Fernandez & Yuh-Shan Ho, 2019. "Research performance and trends in child sexual abuse research: a Science Citation Index Expanded-based analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 121(3), pages 1505-1525, December.
    12. Annika Mies & Tim Gruchmann & Stefan Gold, 2026. "Conceptualising the Socio-material Context: An Ethical Enquiry into the Contextual Materialisation of Paradoxes in Transport Logistics," Journal of Business Ethics, Springer, vol. 203(1), pages 107-139, January.
    13. Serhat Burmaoglu & Ozcan Saritas, 2019. "An evolutionary analysis of the innovation policy domain: Is there a paradigm shift?," Scientometrics, Springer;Akadémiai Kiadó, vol. 118(3), pages 823-847, March.
    14. Andreas Bjurström & Merritt Polk, 2011. "Climate change and interdisciplinarity: a co-citation analysis of IPCC Third Assessment Report," Scientometrics, Springer;Akadémiai Kiadó, vol. 87(3), pages 525-550, June.
    15. Citron, Daniel T. & Way, Samuel F., 2018. "Network assembly of scientific communities of varying size and specificity," Journal of Informetrics, Elsevier, vol. 12(1), pages 181-190.
    16. Marek Kwiek & Wojciech Roszka, 2022. "Academic vs. biological age in research on academic careers: a large-scale study with implications for scientifically developing systems," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(6), pages 3543-3575, June.
    17. Mohd Rizaimy Shaharudin & Azyyati Anuar & Preecha Wararatchai & Natapat Areerakulkan & Wissawa Aunyawong, 2025. "Drivers and Constraints of Remanufacturing: A Global Bibliometric Review," Information Management and Business Review, AMH International, vol. 17(4), pages 141-163.
    18. Mike Thelwall, 2020. "Mid-career field switches reduce gender disparities in academic publishing," Scientometrics, Springer;Akadémiai Kiadó, vol. 123(3), pages 1365-1383, June.
    19. Nasrabadi, Mohamadreza Azar & Beauregard, Yvan & Ekhlassi, Amir, 2024. "The implication of user-generated content in new product development process: A systematic literature review and future research agenda," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    20. Cheng Xu & Yanqi Sun & Haibo Zhou, 2025. "Artificial Aesthetics and Ethical Ambiguity: Exploring Business Ethics in the Context of AI-driven Creativity," Journal of Business Ethics, Springer, vol. 199(4), pages 671-692, July.
    21. Mansoureh Beheshti Nejad & Seyed Mahmoud Zanjirchi & Seyed Mojtaba Hosseini Bamakan & Negar Jalilian, 2024. "Blockchain Adoption in Operations Management: A Systematic Literature Review of 14 Years of Research," Annals of Data Science, Springer, vol. 11(4), pages 1361-1389, August.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijfss:v:13:y:2025:i:1:p:21-:d:1583237. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.