Artificial Intelligence and Machine Learning In Accounting and Auditing: Transforming Financial Reporting, Audit Quality And Professional Practice

Abstract

Artificial Intelligence (AI) and Machine Learning (ML) are transforming accounting and auditing by shifting professional practice from manual, rule-based processing toward automated, predictive and data-driven systems. The present study examines the influence of AI and ML adoption on accounting efficiency, audit quality, fraud detection and decision-making while also considering organizational readiness, professional competencies, governance and ethical concerns. The study integrates evidence from major developments in accounting technology literature between 2000 and 2026 and proposes an empirical framework for examining the consequences of AI adoption among accounting and auditing professionals. For demonstration of the proposed analytical procedure, an dataset comprising 250 accounting and auditing professionals is employed. Descriptive statistics, reliability analysis, Pearson correlation and regression analysis are used for testing three hypotheses. The results indicate a significant positive association between AI/ML adoption and accounting efficiency (β = .62, p < .001), audit quality and fraud-detection capability (β = .66, p < .001), while organizational and technological readiness significantly predicts AI/ML adoption (β = .57, p < .001). The findings suggest that AI and ML can enhance transaction processing, anomaly identification, continuous auditing, risk assessment and financial decision-making. Nevertheless, issues involving algorithmic bias, explainability, cybersecurity, professional judgment, data privacy and accountability remain important. The study concludes that AI should be regarded primarily as an augmentation technology that restructures accounting and auditing work rather than merely replacing professional expertise. Effective implementation requires technological infrastructure to be combined with human judgment, governance mechanisms, ethical controls and continuous professional development.