THE IMPACT OF DIGITAL TRANSFORMATION ON FINANCIAL REPORTING QUALITY UNDER IFRS: EVIDENCE FROM EMERGING ECONOMIES

Abstract

Digital transformation has increasingly reshaped accounting information systems and financial reporting practices worldwide. This study examines the effect of digital transformation on financial reporting quality in emerging economies operating under International Financial Reporting Standards (IFRS). Using panel data from non-financial firms across selected emerging economies over the period 2013–2023, the research applies fixed-effects regression analysis to investigate how digitalization influences the relevance, reliability, and transparency of financial reports. The findings indicate that higher levels of digital transformation are associated with improved financial reporting quality, primarily through enhanced data accuracy, reduced information asymmetry, and more timely disclosure of financial information. In addition, the results show that the positive impact of digitalization is more pronounced in firms with stronger corporate governance mechanisms. This study contributes to the literature by providing empirical evidence from emerging markets and highlighting digital transformation as a key institutional factor supporting the effective implementation of IFRS. The results have important implications for regulators, policymakers, and firm managers aiming to strengthen the credibility and usefulness of financial reporting in the digital era.