The Use of Artificial Intelligence to Determine Contingent Legal Liabilities Provisions.

11 Pages Posted: 25 Oct 2021

See all articles by Daniel Broby

Daniel Broby

Ulster University

Andrea Coulson

affiliation not provided to SSRN

Viktor Dörfler

University of Strathclyde Business School; Széchenyi István University; University of Zagreb Business School

Date Written: June 19, 2021

Abstract

We suggest how Artificial Intelligence (AI) can help us make more accurate legal liability provisions under International Accounting Standards. International Financial Reporting Standards provide considerable guidance on how uncertain legal events should be recognized on the balance sheet. The process is subjective and, we argue, a more qualitative approach would be beneficial. We recommend the use of Artificial Intelligence to get a tentative outcome and a more reliable liability assessment for use in financial statements. This would provide a more true and fair view of the outcome of disputes. We discuss the theoretical and practical issues raised by using Artificial Intelligence to value provisions and propose a way of applying it to calculations of
provisions under IAS 37

Keywords: IAS 37, Contingent liabilities, Artificial Intelligence in accounting, legal provisions

JEL Classification: M40,M41,M42

Suggested Citation

Broby, Daniel and Coulson, Andrea and Dörfler, Viktor, The Use of Artificial Intelligence to Determine Contingent Legal Liabilities Provisions. (June 19, 2021). Available at SSRN: https://ssrn.com/abstract=3945406 or http://dx.doi.org/10.2139/ssrn.3945406

Daniel Broby (Contact Author)

Ulster University ( email )

Accounting, Finance and Economics
Cathedral Quarter
Belfast, Northern Ireland BT15 1ED
United Kingdom

HOME PAGE: http://https://pure.ulster.ac.uk/en/persons/daniel-broby

Andrea Coulson

affiliation not provided to SSRN

Viktor Dörfler

University of Strathclyde Business School ( email )

130 Rottenrow
Duncan Wing
Glasgow, G4 0GE
United Kingdom

HOME PAGE: http://www.strath.ac.uk/staff/dorflerviktordr/

Széchenyi István University ( email )

Egyetem tér 1.
Egyetem tér
Győr, 9026
Hungary

University of Zagreb Business School ( email )

Trg J. F. Kennedyja 6
Zagreb, City of Zagreb 10000
Croatia

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