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Artificial Intelligence for Financial Accountability and Governance in the Public Sector: Strategic Opportunities and Challenges

Author

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  • Ceray Aldemir

    (Public Administartion Department, Faculty of Economics and Administrative Sciences, Muğla Sıtkı Koçman University, 48000 Muğla, Türkiye)

  • Tuğba Uçma Uysal

    (International Trade and Finance, Faculty of Economics and Administrative Sciences, Muğla Sıtkı Koçman University, 48000 Muğla, Türkiye)

Abstract

This study investigates the transformative capacity of artificial intelligence (AI) in improving financial accountability and governance in the public sector. The study aims to explore the strategic potential and constraints of AI integration, especially as fiscal systems become more complex and public expectations for transparency increase. This study employs a qualitative case study methodology to analyze three countries, which are Estonia, Singapore, and Finland. These countries are renowned for their innovative use of AI in public administration. The data collection tools included an extensive review of the literature, governmental publications, case studies, and public feedback. The study reveals that AI-driven solutions such as predictive analytics, fraud detection systems, and automated reporting significantly improve operational efficiency, transparency, and decision making. However, challenges such as algorithmic bias, data privacy issues, and the need for strong ethical guidelines still exist, and these could hinder the equitable use of AI. The study emphasizes the importance of aligning technological progress with democratic values and ethical governance by addressing these problems. The study also enhances the dialog around AI’s role in public administration. It provides practical recommendations for policymakers who seek to use AI wisely to promote public trust, improve efficiency, and ensure accountability in governance. Future research should focus on enhancing ethical frameworks and investigating scalable solutions to overcome the social and technical challenges of AI integration.

Suggested Citation

  • Ceray Aldemir & Tuğba Uçma Uysal, 2025. "Artificial Intelligence for Financial Accountability and Governance in the Public Sector: Strategic Opportunities and Challenges," Administrative Sciences, MDPI, vol. 15(2), pages 1-19, February.
    • Handle: RePEc:gam:jadmsc:v:15:y:2025:i:2:p:58-:d:1588675
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    References listed on IDEAS

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    1. Omoshola S. Owolabi & Prince C. Uche & Nathaniel T. Adeniken & Christopher Ihejirika & Riyad Bin Islam & Bishal Jung Thapa Chhetri, 2024. "Ethical Implication of Artificial Intelligence (AI) Adoption in Financial Decision Making," Computer and Information Science, Canadian Center of Science and Education, vol. 17(1), pages 1-49, May.
    2. Bernd W. Wirtz & Wilhelm M. Müller, 2019. "An integrated artificial intelligence framework for public management," Public Management Review, Taylor & Francis Journals, vol. 21(7), pages 1076-1100, July.
    3. Aleksandrina Aleksandrova & Valentina Ninova & Zhelyo Zhelev, 2023. "A Survey on AI Implementation in Finance, (Cyber) Insurance and Financial Controlling," Risks, MDPI, vol. 11(5), pages 1-16, May.
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