The Impact of Artificial Intelligence and Digital Transformation on Financial Reporting Quality: Insights From Saudi Arabia
Year: 2025
Type: article
Abstract: The study explores the effects of the implementation of artificial intelligence (AI) and digital transformation (DT) on financial reporting quality (FRQ) in Saudi-listed companies. Based on the Technology-Organization-Environment (TOE) model and Agency Theory, the study determines the effect of technological innovations on the quality, timeliness, and reliability of financial reporting in an emerging market with a rapidly changing environment under the Saudi Vision 2030. The study utilizes multiple regression analysis to test the hypotheses proposed using panel data of the 150 non-financial companies listed on the Saudi Stock Exchange (Tadawul) between the years 2019-2023. Both AI adoption and DT transformation positively and significantly affect FRQ, and, therefore, the conclusion that technology makes the transparency of information, the lack of information asymmetry, and compliance with international standards stronger can be made. The research adds to the literature because it expands previous research on financial reporting and technology to the Saudi context, provides a theoretical understanding of how innovation can solve agency problems, and it also offers practical suggestions to managers, regulators, and investors. In general, the results highlight the strategic relevance of AI and DT as complementary sources of quality financial reporting in emerging markets.
DOI: 10.14419/933yjb41
Author: Amani Ebnaoof
Institution: University of Tabuk
Language: English
Topic: Financial Reporting and XBRL
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4415167493
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