DIGITAL ACCOUNTING PRACTICES AND QUALITY OF FINANCIAL REPORTS
Abstract
Digital accounting has replaced the manual ways of processing financial transactions in almost all organisations. Digital accounting practices are very relevant in the processing of financial transactions. One of the many benefits of digital accounting is the improvement in the quality of financial reports. However, this role has often been overlooked. This study was therefore conducted to investigate whether the application of digital accounting practices hasany effect on the quality of financial reports. The main objective of this study was to investigate whether there is any relationship between the digital accounting practicesand the quality of financial reports. The independent variable in the study was the digital accounting practices which was measured by software application, network application and humanware application; while the dependent variable was the quality of financial statements which was modelled by the five attributes of financial reports: relevance, comparability, faithful representation, verifiability and understandability. The study adopted survey research design and the data were obtained from primary sources through questionnaires administered on randomly selected professional accountants in Akwa Ibom State, Nigeria. Seventy out of eighty questionnaires were retrieved. The data were analysed with SPSS version 20 using correlation and regression models. The results of analysis showed that all the components of independent variable were positively and significantly related to the quality of financial reports. However, the humanware component showed a very high positive correlation portraying the importance of humanware in digital accounting practice. The study concluded that digital accounting practices affect the quality of financial reports of firms. The study recommends amongst others, the adoption of digital accounting in all aspects of the processing of financial statements.
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