Businesses preparing to introduce agentic AI into their finance functions risk creating serious governance and control gaps if they treat the technology simply as the next stage of automation, according to UAE-headquartered fractional CFO firm, CompassPoint Consulting.

Agentic AI represents a fundamental shift from the AI tools many companies already use for financial reporting, forecasting and administration. Rather than simply analysing information and producing an output for a person to act upon, AI agents can now take actions themselves within defined parameters.

In finance, that could mean things like chasing overdue invoices, posting journals, reconciling accounts, processing invoices or eventually triggering payments, with human intervention reserved primarily for exceptions.

CompassPoint says this changes the question business leaders need to ask.

Instead of focusing solely on which AI tools can make finance teams faster or more productive, founders and boards must now decide which financial decisions and actions they are prepared to allow AI to make on the company’s behalf, who remains accountable for those actions, and where human approval must remain mandatory.

Zaid Aboobaker, Founder of CompassPoint Consulting, said: “Agentic AI is not simply another finance automation tool. The significant change is that the technology moves from simply advising people to acting for the business.”

For example, he continued: “If an AI agent sends a client communication, approves a process or triggers a financial action, that remains an action of the company. But the board still has responsibility, the auditor still needs an audit trail and somebody still needs to be accountable when something goes wrong.

“That means the most important work happens before you deploy the technology. Businesses need to urgently decide what an agent is allowed to do, where the limits sit, what requires human approval and how every action can subsequently be explained and audited.”

CompassPoint expects high-volume, rules-based finance functions to be affected first, including the likes of bookkeeping, transaction posting, bank reconciliation, invoice processing, accounts payable and receivables management.

Cash flow forecasting, routine management reporting, procurement and approval workflows are also likely to become increasingly agentic as the technology develops. And it’s developing fast,

However, CompassPoint argues that some responsibilities should remain firmly human-led, even as AI becomes technically capable of performing more of the underlying admin work.

These include setting the rules under which AI operates, statutory filings, investor communications, audit responses, strategic forecasting, capital allocation and financial decisions involving employees.

Board reporting is also likely to remain highly dependent on human judgement.

Aboobaker said: “Producing numbers is one thing. Understanding which numbers matter, what needs to be challenged and when the board needs to have a difficult conversation is something very different.

“The CFO role is not disappearing. It is simply changing shape. As more execution becomes automated, senior finance leadership becomes increasingly focused on designing the framework, setting controls, challenging outputs and managing exceptions.”

CompassPoint identifies several potential risks for businesses that give AI agents significant financial autonomy without an appropriate governance framework.

One is auditability. If numerous agents are acting independently across a finance function, businesses must still be able to reconstruct why a decision was made, what rules were applied and who authorised those rules.

Speed can create another problem. Incorrect logic or corrupted data can potentially be applied across large numbers of transactions before a person recognises the error.

Aboobaker also warns that cybersecurity risks may also increase, where AI agents are given access to payment systems or commercially sensitive financial data.

A further concern is what CompassPoint describes as “human atrophy”, where teams become so accustomed to reliable automated outputs that they gradually lose the habit, or ability, to challenge them.

“The risk is not necessarily a spectacular AI failure,” Aboobaker added, “A much more realistic risk is an AI system that works well enough for people to stop questioning it, and then gets something important wrong without anyone noticing.”

The issue is particularly relevant for UAE businesses as regulatory finance becomes increasingly technology-driven.

Corporate tax, VAT compliance and the forthcoming implementation of e-invoicing create areas where agentic AI could deliver significant efficiencies by applying established rules consistently across large transaction volumes.

But CompassPoint warns that automation does not remove the need for expert interpretation. “Once the rule is correctly understood and the logic is properly established, AI can apply that logic extremely efficiently,” Aboobaker said.

“The danger comes at the interpretation stage. If the underlying rule has been misunderstood, the AI can execute the wrong logic at scale, consistently and confidently. The more you automate in a regulated environment, the stronger the governance around that automation needs to become.”

CompassPoint believes the rapid development of agentic AI may increase rather than reduce the need for senior financial leadership among SMEs and growth-stage companies.

As technology takes over more transactional work, CFO-level responsibilities will increasingly move towards determining the rules, permissions, controls and escalation points governing automated systems.

For businesses that don’t yet require, or cannot justify, a full-time CFO, CompassPoint says fractional leadership can deliver such oversight, while allowing companies to capture the productivity benefits of AI.

Aboobaker concluded: “The decisions that matter are shifting from doing the work to designing the framework within which the work gets done.

“SMEs have a real opportunity to use agentic AI to become more efficient, but without senior financial judgement they risk either underusing the technology or deploying it without understanding the exposure they are creating.

“The combination of capable technology and experienced human judgement is going to become more important, not less.”