Australia to fall behind without mandatory digital reporting, CA ANZ cautions
Australia’s failure to mandate digital reporting practices has placed it at a disadvantage in global capital markets, CA ANZ has warned.
A new report by CA ANZ has argued that Australia’s lack of digital reporting infrastructure has rendered its capital market invisible to the growing number of international investors that rely on algorithms and AI to inform investment decisions.
“In a complex global context where financial analysis and investment decisions increasingly rely on AI and other technology-driven approaches, Australia’s capital market is effectively invisible through continued use of paper and online PDF financial reporting,” the report said.
“When financial information is locked in static formats or contains inaccuracies, it cannot be reliably processed by algorithms."
In their report, CA ANZ urged the government to make it compulsory for firms to lodge their annual and half-year financial reports in digital form and adopt the internationally recognised eXtensible Business Reporting Language (XBRL).
Australia is among the few developed economies without a mandated digital reporting strategy, CA ANZ said. Over 65 countries now use the XBRL format, including nine of the 10 top global economies.
As AI tools become more ubiquitous, the professional body said there was a growing need for financial data to be machine-readable.
“Australia lags most leading economies in mandating digital reporting for listed entities. As investors increasingly rely on digital sources and data for decision-making, adopting digital reporting is essential to meet expectations and align with global standards,” CA ANZ said.
“Adopting digital financial reporting aligns Australia with global best practices and enhances the competitiveness of its capital markets.”
Financial reports that did not follow a standardised digital format posed the risk of introducing errors and uncertainty when analysed by AI, the accounting body warned.
“Digital financial reporting enables AI-driven sophisticated quantitative analysis and complex modelling. When there’s no single, definitive version of the truth, uncertainty rises – and in corporate reporting, uncertainty can translate to costly mistakes,” CA ANZ said.
They also argued that a digital financial reporting mandate would help Australian businesses harness productivity gains from AI tools. The Productivity Commission earmarked digital financial reporting as a topic they would investigate as part of a broader inquiry to resuscitate Australia’s stagnant productivity growth.
“Digital reporting enhances productivity by automating data collection, reducing manual errors, and streamlining compliance processes,” CA ANZ said.
“It also boosts investment by increasing transparency, improving data accessibility, and enabling faster, more informed decision-making by investors.
“Without digital reporting, the full capabilities of AI in financial analysis remain out of reach.”
