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Review

The Role of Artificial Intelligence in Improving the Efficiency and Accuracy of Local Government Financial Reporting: A Systematic Literature Review

by
Darmawati Darmawati
1,*,
Noor Ismawati Jaafar
2,
Rahmawati HS
1,
Haniek Khoirunnissa Baja
1,
Asharin Juwita Purisamya
1,
Audrey Michelle Wenny Yolanda
1,
Baso Amir
1 and
Muhammad Reza Pahlevi Juanda
1
1
Department of Accounting, Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia
2
Department of Decision Science, Faculty of Business and Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia
*
Author to whom correspondence should be addressed.
J. Risk Financ. Manag. 2025, 18(11), 601; https://doi.org/10.3390/jrfm18110601
Submission received: 30 July 2025 / Revised: 14 October 2025 / Accepted: 18 October 2025 / Published: 27 October 2025
(This article belongs to the Special Issue Artificial Intelligence, Accounting, and Sustainability: Pathways to the SDGs)
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Abstract

Digital transformation has driven the use of artificial intelligence (AI) in local government financial reporting to improve efficiency, transparency, and accountability. This study employs a systematic literature review (SLR) approach to analyze 20 relevant articles, identifying common characteristics of publications, research focus, methods, AI technologies used, key findings, research gaps, and future research directions. The analysis results show the dominance of machine learning and expert systems in detecting fraud, predicting financial performance, and improving reporting accuracy. However, limitations in infrastructure, regulations, and system integration across government agencies remain significant challenges to implementing AI in the public sector. This study proposes the need for the development of practical implementation models, collaboration between academics, government, and technology developers, as well as the formulation of policies that support ethical and responsible AI governance. These findings make a significant contribution to shaping the strategic direction of AI utilization to strengthen local government financial reporting systems sustainably.
Keywords: Artificial Intelligence; digital financial reporting; local government; public sector accounting; transparency Artificial Intelligence; digital financial reporting; local government; public sector accounting; transparency

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MDPI and ACS Style

Darmawati, D.; Jaafar, N.I.; HS, R.; Baja, H.K.; Purisamya, A.J.; Yolanda, A.M.W.; Amir, B.; Juanda, M.R.P. The Role of Artificial Intelligence in Improving the Efficiency and Accuracy of Local Government Financial Reporting: A Systematic Literature Review. J. Risk Financ. Manag. 2025, 18, 601. https://doi.org/10.3390/jrfm18110601

AMA Style

Darmawati D, Jaafar NI, HS R, Baja HK, Purisamya AJ, Yolanda AMW, Amir B, Juanda MRP. The Role of Artificial Intelligence in Improving the Efficiency and Accuracy of Local Government Financial Reporting: A Systematic Literature Review. Journal of Risk and Financial Management. 2025; 18(11):601. https://doi.org/10.3390/jrfm18110601

Chicago/Turabian Style

Darmawati, Darmawati, Noor Ismawati Jaafar, Rahmawati HS, Haniek Khoirunnissa Baja, Asharin Juwita Purisamya, Audrey Michelle Wenny Yolanda, Baso Amir, and Muhammad Reza Pahlevi Juanda. 2025. "The Role of Artificial Intelligence in Improving the Efficiency and Accuracy of Local Government Financial Reporting: A Systematic Literature Review" Journal of Risk and Financial Management 18, no. 11: 601. https://doi.org/10.3390/jrfm18110601

APA Style

Darmawati, D., Jaafar, N. I., HS, R., Baja, H. K., Purisamya, A. J., Yolanda, A. M. W., Amir, B., & Juanda, M. R. P. (2025). The Role of Artificial Intelligence in Improving the Efficiency and Accuracy of Local Government Financial Reporting: A Systematic Literature Review. Journal of Risk and Financial Management, 18(11), 601. https://doi.org/10.3390/jrfm18110601

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