Governance effects of digital transformation: from the perspective of accounting quality

Fang, Qiaoling; Nu-tao, YU; Xu, Hui

doi:10.1080/21697213.2023.2148944

Cited by 7 publications

(11 citation statements)

References 33 publications

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“…According to the research results, the use of digital technology in accounting systems can improve accounting quality and increase transparency and accountability (Al Shanti & Elessa, 2023; Al‐Hattami & Kabra, 2022; Fang et al, 2023). The impact of digitalization on CG practices is discussed by Varoglu et al (2021), who highlighted the importance of developing technologies and cybersecurity in ensuring effective CG.…”

Section: Theoretical Framework and Research Hypothesesmentioning

confidence: 99%

“…The impact of digitalization on CG practices is discussed by Varoglu et al (2021), who highlighted the importance of developing technologies and cybersecurity in ensuring effective CG. Another study published in the China Journal of Accounting Studies indicated that digital transformation can improve the quality of financial reporting and increase the effectiveness of internal controls (Fang et al, 2023). On the other hand, Al‐Hattami, Hashed, and Kabra (2021) and Al‐Dalabih (2018) stressed the importance of DAS's security and risk‐freeness.…”

Section: Theoretical Framework and Research Hypothesesmentioning

confidence: 99%

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Digital accounting system and its effect on corporate governance: An empirical investigation

Al‐Hattami,

Almaqtari,

Abdullah

et al. 2024

Strategic Change

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This empirical investigation explores the impact of the digital accounting system (DAS) on corporate governance (CG). The rapid advancement of technology has revolutionized various aspects of business operations, including accounting processes. The transition from traditional manual accounting systems to digital platforms has been accompanied by significant changes in corporate governance practices. This study aims to investigate the influence of DAS effectiveness (bookkeeping system, DAS security, IFRS adoption, and budgeting system) and the success of DAS (system quality, information quality, and service quality) on CG. The study determined the relationship by conducting a questionnaire survey of 264 senior managers, accountants, and department heads of pharmaceutical companies in Yemen. Partial Least Squares (PLS) was used for data analysis. The results supported all assumed relationships except the relationship between the budgeting system and CG. Specifically, unlike all supposed relationships, the budgeting system had no significant impact on CG. Despite the fact that prior studies have investigated these issues from different aspects in developed countries, the evidence in less developed countries is still unknown. Further, revisiting DAS and CG aspects with different new insights and measures, particularly bookkeeping system, DAS security, IFRS adoption, budgeting system, system quality, information quality, and service quality, has not been the subject of prior studies. As a result, the present study bridges a serious gap in the existing stock of knowledge in DAS and CG studies. Moreover, this piece of research has useful implications for managers, investors, practitioners, academicians, and decision‐makers.

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Section: Theoretical Framework and Research Hypothesesmentioning

confidence: 99%

Section: Theoretical Framework and Research Hypothesesmentioning

confidence: 99%

Digital accounting system and its effect on corporate governance: An empirical investigation

Al‐Hattami,

Almaqtari,

Abdullah

et al. 2024

Strategic Change

View full text Add to dashboard Cite

show abstract

“…These terms describe the phenomenon of change experienced and disseminated by companies in the environment in which they operate by adopting digital technologies, with different intensities (Ionaşcu et al, 2022). Fang et al (2022) stated that companies with higher levels of digitalization have lower levels of earnings management because these companies have better quality accounting information. Digitalization reduces human involvement in the production and operation process, hence narrowing the scope of companies for earnings management (Wang et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

“…Similarly, study conducted by Zhan & Jing (2022) stated that the development of fintech reduces corporate earnings management by reducing information asymmetry and reducing corporate financing constraints. However, studies on the effect of digitalization disclosure on the quality of accounting information is still in the exploratory stage (Fang et al, 2022). The "Making Indonesia 4.0" program is a motivation for researchers to conduct research on this theme.…”

Section: Introductionmentioning

confidence: 99%

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Digitalization Disclosure and Accounting Information Quality

Pratama,

Dwita,

Md.Sum

2023

WRA

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Purpose -This study aims to examine how digitalization disclosures affect the quality of accounting information. The quality of accounting information is important for a company because it have an impact on internal and external parties. However, in Indonesia, digitilization disclosure is still an issue. Therefore, this study was conducted to address this problem by making digitalization a variable that can influence the quality of accounting information. Digitalization can increase transparency and accuracy through automation in the financial reporting process. Hence, increases the quality of financial reporting. However, the hypothesis of this research was rejected because the measurement of digitization used in this research was measured through voluntary disclosures by companies in the company's annual report, where in this case not all companies implementing digitization disclosed their digitalization efforts.Design/methodology/approach -The sample in this study are companies engaged in food and beverage, textile, and chemical sectors. This study focused on these three sectors because they are in line with a development initiative called "Making Indonesia 4.0". Research on this topic is still in the exploratory stage. Findings -The results of this study show that the application of digitalization in companies has not been maximized. However, this study shows that the application of digitalization has a negative but insignificant effect on absolute discretionary accruals which describes the behavior of accrual earnings management.Originality/value -Further research on the effect of digitalization disclosure on the quality of accounting information is still rare and is still in the exploratory stage. In addition, this study is supported by the Indonesian government's initiatives in order to encourage the implementation of digitalization of Indonesian companies called "Making Indonesia 4.0" which is in line with this research.Research limitations/implications -. The results of this study show that the application of digitalization in companies has not been fully maximized. This research shows that the application of digitalization is able to reduce the absolute level of discretionary accruals which describes accrual earnings management behavior. This can be seen from the negative influence of the variable implementing digitalization on absolute discretionary accruals. Hence, the application of digitalization is considered capable of reducing information asymmetry so that it can improve the quality of accounting information. The future aim is that this information can be useful to generate more profits or help resolve future financial problems because quality information is able to present the actual state of the company.

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Can digital M&A reduce the stock price crash risk?

Guan,

Wen

2024

Int. J Fin Econ

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With the rapid development of the digital economy, digital mergers and acquisitions (M&A) have become essential means for enterprises to acquire digital technologies and accelerate their digital transformation. This paper examines the impact of digital M&A on stock price crash risk using a sample of M&A transactions of China A‐share listed companies from 2010 to 2021. The results show that digital M&A can reduce stock price crash risk after M&A. Further discussions reveal that compared to non‐digital M&A, digital M&A has a better market effect, and the target firms of digital M&A generally are in different industries from the acquirers, have relatively low registered capital, have a shorter registration time, and have better financial performance. Mechanism tests indicate that during the transaction, digital M&A increases the probability of signing earnout contracts and reduces the cash payment ratio. After the transaction, digital M&A increases research and development (R&D) investment and improves R&D investment efficiency, ultimately reducing stock price crash risk. Cross‐sectional tests suggest that in situations with intense market competition, lower digitalization level of the acquirers, and higher business similarity between the acquirer and the target firm, digital M&A is more effective in reducing stock price crash risk. The findings enrich the research on the operational mechanisms and economic consequences of digital M&A, providing theoretical references for regulatory authorities to optimise M&A regulatory policies and for enterprises to assess the benefits and risks of digital M&A.

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Governance effects of digital transformation: from the perspective of accounting quality

Cited by 7 publications

References 33 publications

Digital accounting system and its effect on corporate governance: An empirical investigation

Digital accounting system and its effect on corporate governance: An empirical investigation

Digitalization Disclosure and Accounting Information Quality

Can digital M&A reduce the stock price crash risk?

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