AI can turn a 70-page annual report into a neat paragraph while quietly swapping million for billion, treating guidance as audited results, or calculating a margin with mismatched denominators.
Define the accounting boundary
State the company, reporting period, currency, consolidation perimeter and document version before extraction. Distinguish annual from quarterly results, GAAP from non-GAAP figures and current period from comparative period. For the same metric, management commentary and audited statements may use different scopes.
Make arithmetic reproducible
A growth claim needs numerator, denominator, period and formula. A percentage change from 80 to 100 is 25 percent, not 20 percent; an annualization assumption must be stated. Extract source table cells and independently recompute calculations in a deterministic tool. Do not rely on a language model to self-attest that arithmetic has been verified.
Check notes, caveats and material uncertainty
Read footnotes for discontinued operations, restatements, impairment and currency translation. Confirm whether numbers are provisional and whether financial projections are management estimates. Identify whether an AI-generated narrative silently drops risk factors or makes a company-specific claim beyond the cited report.
Separate investment advice and marketing claims
The SEC pursued AI-washing cases involving misrepresentations about advisers’ AI use in March 2024. Such enforcement concerns are distinct from the correctness of a financial-analysis model. Reporting a company’s claimed use of AI is not independent verification of its investment performance or the quality of a strategy.
Practical review example
For a liquidity analysis, verify cash, restricted cash, undrawn facility, maturity schedule and debt covenant definitions against the correct dates. Cite underlying table titles privately and flag where disclosures cannot resolve an ambiguity. Human analysts sign off material figures; the published explanatory text avoids pretending that a source table is a forecast.
Sources & Further Reading
- SEC settled AI-washing charges against two investment advisers — U.S. Securities and Exchange Commission.
- NIST AI RMF Core: govern map measure and manage — NIST.
- Copyright and Artificial Intelligence report hub — U.S. Copyright Office.
Evidence checked 25 October 2026. Applicability: Global; SEC enforcement example US. This material is general education, not legal, medical, investment or other professional advice. No vendor performance test is implied.