Digital Accounting Transformation and Its Implications for Financial Reporting Quality in SMEs

Abstract

This study aims to explore the process of digital accounting transformation and its implications for financial reporting quality in small and medium-sized enterprises (SMEs). The research adopts a qualitative approach using a case study design to capture in-depth insights into how SMEs experience and interpret digital transformation in their accounting practices. Data were collected through semi-structured interviews, participant observation, and documentation involving SME owners, financial staff, and users of digital accounting systems selected through purposive and snowball sampling techniques. The findings reveal several key themes, including improved efficiency and accuracy of financial reporting, shifts in roles and competencies of accounting actors, challenges in implementation such as limited digital literacy and resource constraints, and enhanced transparency and reliability of financial information. These results indicate that digital accounting transformation not only improves technical reporting processes but also reshapes organizational practices and decision-making capabilities. The study contributes to the literature by providing a contextual and experiential understanding of digital transformation in SMEs, emphasizing its socio-organizational dimensions beyond technological adoption. Practically, the findings highlight the need for capacity building, accessible digital solutions, and supportive policies to ensure effective implementation. Future research is recommended to expand the scope through multi-case or mixed-method approaches and to examine the influence of institutional and cultural factors on digital transformation outcomes in SMEs.