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Digital Accounting Capabilities and Financial Reporting Quality in Kedu MSMEs: The Mediating Role of Accounting Process Efficiency and the Moderating Role of Owners’ Financial Literacy

  • Naila F. As-Syifa1*
  • Romandhon2
  • Eni Candra Nurhayati3
  • Desy Wulandari4
1,2,3,4 Universitas Sains Al-Qur'an image/svg+xml
* Corresponding Author: Naila F. As-Syifa

Abstract

The digitalization of transactions in micro, small, and medium enterprises (MSMEs) does not automatically produce high-quality financial reports, because application use often stops at recording cash or payments and has not yet become an integrated capability to capture, process, verify, and present accounting information. This study examines the relationship between digital accounting capability and the financial reporting quality of MSMEs in the Kedu area through accounting process efficiency and tests owners’ financial literacy as a moderator of the relationship between digital capability and process efficiency. The resource-based view frames digital accounting capability as a valuable organizational resource, while the technology–organization–environment framework explains the context of technology use. An online survey was completed by 400 MSME owners or managers, 100 each in Wonosobo, Magelang, Temanggung, and Kebumen. Data were analyzed using composite-score regression with 10,000 bootstrap resamples. Digital accounting capability was positively associated with process efficiency (β = 0.425) and reporting quality (β = 0.245), and process efficiency was positively associated with reporting quality (β = 0.738). The indirect effect at average literacy was 0.313 (95% CI [0.258, 0.369]). The interaction with literacy was 0.385, and the index of moderated mediation was 0.284 (95% CI [0.209, 0.352]), although the indirect effect was not significant at low literacy. Differences across regencies were not supported after correction for multiple testing. The findings underline the importance of integrating technology, accounting routines, and owners’ financial understanding. The results are associational, come from a cross-sectional nonprobability sample of digitally reachable owners, and rely on respondents’ perceptions of reporting quality.

Keywords

Digital accounting capability Financial reporting quality Accounting process efficiency Owners’ financial literacy MSMEs

How to Cite

Citation Format
As-Syifa, N. F., Romandhon, R., Nurhayati, E. C., & Wulandari, D. (2026). Digital Accounting Capabilities and Financial Reporting Quality in Kedu MSMEs: The Mediating Role of Accounting Process Efficiency and the Moderating Role of Owners’ Financial Literacy. International Journal of Management Science and Information Technology, 6(2), 3222-3233. https://doi.org/10.35870/ijmsit.v6i2.9047

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Author Biographies

Naila F. As-Syifa, Universitas Sains Al-Qur'an

Accounting Study Program, Faculty of Economics and Business, Universitas Sains Al-Qur’an, Wonosobo Regency, Central Java Province, Indonesia

Romandhon, Universitas Sains Al-Qur'an

Accounting Study Program, Faculty of Economics and Business, Universitas Sains Al-Qur’an, Wonosobo Regency, Central Java Province, Indonesia

Eni Candra Nurhayati, Universitas Sains Al-Qur'an

Accounting Study Program, Faculty of Economics and Business, Universitas Sains Al-Qur’an, Wonosobo Regency, Central Java Province, Indonesia

Desy Wulandari, Universitas Sains Al-Qur'an

Accounting Study Program, Faculty of Economics and Business, Universitas Sains Al-Qur’an, Wonosobo Regency, Central Java Province, Indonesia

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Copyright (c) 2026 Naila F. As-Syifa, Romandhon, Eni Candra Nurhayati, Desy Wulandari

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