Impact of Digital Accounting System on Financial Reporting

Abstract

The rapid advancement of technology has significantly transformed accounting practices, leading to the widespread adoption of digital accounting systems in modern business organizations. This research examines the impact of digital accounting systems on financial reporting, focusing on accuracy, efficiency, transparency, and decision-making. The study uses a descriptive and analytical research design with primary data collected from 120 respondents including accountants, business owners, and employees through a structured questionnaire, supplemented by secondary data from books, journals, and published reports. Findings indicate that digital accounting systems have a strongly positive impact on financial reporting reducing errors, saving time, enabling real-time information access, and improving GST compliance. However, challenges such as high implementation costs, cybersecurity risks, and need for technical training persist. The study concludes that the benefits of digital accounting systems significantly outweigh their limitations, and recommends continued adoption and investment in training and cybersecurity to enhance financial management practices.