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Making Non-Financial Information Auditable: AI’s Influence on the Operationalization of Non-Financial Materiality

Heydarova, Firangiz LU and Jocz, Mateusz LU (2025) BUSN79 20251
Department of Business Administration
Abstract
Abstract
Title: Making Non-Financial Information Auditable: AI’s Influence on the Operationalization of Non-Financial Materiality
Course: BUSN79 Degree Project: Accounting and Finance
Course: BUSN79 Degree Project: Accounting and Finance
Authors: Firangiz Heydarova and Mateusz Jocz
Supervisor: Liesel Klemcke
Examiner: Anders Anell
Purpose: The study aims to explore how AI technologies influence the operationalization of materiality in non-financial assurance engagements. It seeks to uncover AI systems' role in addressing materiality challenges and discuss how AI affects professional judgment in this area.
Methodology: This study adopts a qualitative research method using an interpretivist approach. Data was collected through... (More)
Abstract
Title: Making Non-Financial Information Auditable: AI’s Influence on the Operationalization of Non-Financial Materiality
Course: BUSN79 Degree Project: Accounting and Finance
Course: BUSN79 Degree Project: Accounting and Finance
Authors: Firangiz Heydarova and Mateusz Jocz
Supervisor: Liesel Klemcke
Examiner: Anders Anell
Purpose: The study aims to explore how AI technologies influence the operationalization of materiality in non-financial assurance engagements. It seeks to uncover AI systems' role in addressing materiality challenges and discuss how AI affects professional judgment in this area.
Methodology: This study adopts a qualitative research method using an interpretivist approach. Data was collected through semi-structured interviews with six audit professionals specializing in non-financial assurance within the EU, namely in the Nordics. Thematic analysis, informed by Braun and Clarke (2006), and Gioia et al. (2013), was used to analyze the interview data.
Theoretical perspectives: The study draws on Power's "Making Things Auditable" framework to understand the influence of AI on the emerging non-financial materiality operationalization. This is supplemented by literature on financial and non-financial materiality, on AI in auditing, and professional judgment.
Empirical foundation: Based on interviews with assurance professionals regarding their experiences with non-financial materiality.
Conclusions: The non-financial assurance field, especially under CSRD, is evolving with a lack of standard methodologies and increased reliance on professional judgment. AI is found to be used in a supportive role for tasks like identification and review, with potential benefits in efficiency, and lesser to objectivity. The integration of AI does not diminish but increases the importance of professional judgment, particularly for reviewing AI output and interpreting qualitative data. Lastly, non-financial materiality operationalization is found as a negotiated practice influenced by human judgment and control. (Less)
Please use this url to cite or link to this publication:
author
Heydarova, Firangiz LU and Jocz, Mateusz LU
supervisor
organization
course
BUSN79 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
AI, Artificial Intelligence, Non-Financial Assurance, Materiality, Operationalization, Professional Judgment, Audit, Non-financial reporting
language
English
id
9205673
date added to LUP
2025-06-26 15:38:23
date last changed
2025-06-26 15:38:23
@misc{9205673,
  abstract     = {{Abstract
Title: Making Non-Financial Information Auditable: AI’s Influence on the Operationalization of Non-Financial Materiality
Course: BUSN79 Degree Project: Accounting and Finance
Course: BUSN79 Degree Project: Accounting and Finance
Authors: Firangiz Heydarova and Mateusz Jocz
Supervisor: Liesel Klemcke
Examiner: Anders Anell
Purpose: The study aims to explore how AI technologies influence the operationalization of materiality in non-financial assurance engagements. It seeks to uncover AI systems' role in addressing materiality challenges and discuss how AI affects professional judgment in this area.
Methodology: This study adopts a qualitative research method using an interpretivist approach. Data was collected through semi-structured interviews with six audit professionals specializing in non-financial assurance within the EU, namely in the Nordics. Thematic analysis, informed by Braun and Clarke (2006), and Gioia et al. (2013), was used to analyze the interview data.
Theoretical perspectives: The study draws on Power's "Making Things Auditable" framework to understand the influence of AI on the emerging non-financial materiality operationalization. This is supplemented by literature on financial and non-financial materiality, on AI in auditing, and professional judgment.
Empirical foundation: Based on interviews with assurance professionals regarding their experiences with non-financial materiality.
Conclusions: The non-financial assurance field, especially under CSRD, is evolving with a lack of standard methodologies and increased reliance on professional judgment. AI is found to be used in a supportive role for tasks like identification and review, with potential benefits in efficiency, and lesser to objectivity. The integration of AI does not diminish but increases the importance of professional judgment, particularly for reviewing AI output and interpreting qualitative data. Lastly, non-financial materiality operationalization is found as a negotiated practice influenced by human judgment and control.}},
  author       = {{Heydarova, Firangiz and Jocz, Mateusz}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Making Non-Financial Information Auditable: AI’s Influence on the Operationalization of Non-Financial Materiality}},
  year         = {{2025}},
}