Software
Indian finance leaders are under increasing pressure to demonstrate returns on artificial intelligence investments, but governance and internal controls are failing to keep pace with rapid AI adoption, according to a new study by tax compliance software provider Avalara.
The survey, conducted among CFOs and senior finance executives across India, the US, the UK and Australia, found that 85% of Indian respondents face moderate or significant pressure to show measurable returns from AI agent investments.
The study also found that 71% said their organisations prioritise deployment speed, while only 8% said governance takes precedence over rapid implementation.
According to the report, the push for faster AI adoption is creating accountability gaps. More than one in four Indian finance leaders said responsibility for significant AI-related errors is either unclear or not assigned to anyone, a higher proportion than in the other markets surveyed.
The findings also point to growing regulatory risks. While AI agents are increasingly being used in finance, tax and compliance functions, 10% of Indian respondents said they are not confident they could clearly explain an AI agent's decisions to a regulator or auditor.
Governance practices also appear to be lagging behind AI deployment. Nearly 24% of finance leaders said their organisations have not updated internal controls over the past year to account for AI agents making or recommending business decisions. Only 28% reported that AI controls had been reviewed by IT or cybersecurity teams, while 34% said risk or compliance teams had evaluated those controls.
"While Indian enterprises are moving fast to automate, their internal rulebooks are being left behind," said Dulles Krishnan, vice president and general manager, India Operations at Avalara.
"Running new AI tools on outdated compliance policies is a massive blind spot. CFOs need to ensure their risk frameworks are updated to monitor automated decisions before an auditor comes knocking," he said.
The survey also highlighted a shortage of AI expertise within finance teams, with 76% of respondents saying they lack dedicated in-house knowledge to understand how AI agents operate.
When asked what would increase confidence in expanding AI use, finance leaders identified access to trusted tax and financial data, human oversight for high-risk decisions, comprehensive audit trails and stronger vendor accountability as the most important requirements.
The findings suggest that as AI agents take on a larger role in finance and compliance operations, organisations will need to strengthen governance, documentation and oversight to ensure automated decisions remain transparent, explainable and audit-ready.
The survey, conducted among CFOs and senior finance executives across India, the US, the UK and Australia, found that 85% of Indian respondents face moderate or significant pressure to show measurable returns from AI agent investments.
The study also found that 71% said their organisations prioritise deployment speed, while only 8% said governance takes precedence over rapid implementation.
According to the report, the push for faster AI adoption is creating accountability gaps. More than one in four Indian finance leaders said responsibility for significant AI-related errors is either unclear or not assigned to anyone, a higher proportion than in the other markets surveyed.
The findings also point to growing regulatory risks. While AI agents are increasingly being used in finance, tax and compliance functions, 10% of Indian respondents said they are not confident they could clearly explain an AI agent's decisions to a regulator or auditor.
Governance practices also appear to be lagging behind AI deployment. Nearly 24% of finance leaders said their organisations have not updated internal controls over the past year to account for AI agents making or recommending business decisions. Only 28% reported that AI controls had been reviewed by IT or cybersecurity teams, while 34% said risk or compliance teams had evaluated those controls.
"While Indian enterprises are moving fast to automate, their internal rulebooks are being left behind," said Dulles Krishnan, vice president and general manager, India Operations at Avalara.
"Running new AI tools on outdated compliance policies is a massive blind spot. CFOs need to ensure their risk frameworks are updated to monitor automated decisions before an auditor comes knocking," he said.
The survey also highlighted a shortage of AI expertise within finance teams, with 76% of respondents saying they lack dedicated in-house knowledge to understand how AI agents operate.
When asked what would increase confidence in expanding AI use, finance leaders identified access to trusted tax and financial data, human oversight for high-risk decisions, comprehensive audit trails and stronger vendor accountability as the most important requirements.
The findings suggest that as AI agents take on a larger role in finance and compliance operations, organisations will need to strengthen governance, documentation and oversight to ensure automated decisions remain transparent, explainable and audit-ready.
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