ACCOUNTING FOR AI: ETHICAL AND LEGAL CONSIDERATIONS IN FINANCIAL AUTOMATION AMONG GHANA BUSINESSES

The growing integration of Artificial Intelligence (AI) in financial accounting among Ghanaian businesses has introduced substantial efficiency gains but also raised urgent ethical and legal concerns, particularly in areas such as data privacy, algorithmic bias, and transparency. This study is timely and essential, as Ghanaian firms-especially SMEs-face increasing challenges in responsibly adopting AI-driven financial automation amidst a lack of structured governance frameworks. The research aims to evaluate how ethical and legal considerations influence AI adoption and decision-making quality. Using a descriptive design and secondary data from 100 purposively sampled Ghanaian firms between 2019 and 2023, the study employed correlation, chi-square, and multiple regression analyses. Key findings reveal a strong inverse correlation (r = -0.82) between ethical concerns and AI adoption, while legal compliance mechanisms significantly reduced financial errors (β = -0.76, p < 0.01). Moreover, ethical oversight and legal compliance jointly explained 78% (R² = 0.78) of the variation in the quality of financial decisions. The overall correlation coefficient between AI adoption and efficiency gains was a striking +0.994, and a combined regression model with AI adoption, legal compliance, and ethical oversight yielded an R² of 0.84. These results confirm that robust governance enhances AI-driven accounting outcomes. The study concludes that ethical and legal governance structures are not optional but vital performance drivers. It recommends enforceable ethical codes, regulatory audits, and targeted SME support to ensure transparent, compliant, and responsible AI use. The findings contribute to advancing theories such as Deontological Ethics, Technology Acceptance Model, and Agency Theory, with implications for policymakers, corporate leaders, and regulators.