A thesis submitted to the Council of the College of Administrationand Economics, University of Karbala, as a requirement for the Master’s degree in Accounting Sciences.
Submitted by student
Hanan Abbas Hamza
Under the supervision of
Dr. Abdulrasool Abdulabbas Sahib Al-Salman
The contemporary world is witnessing a rapid digital transformation that has fundamentally reshaped economic and accounting practices. Digital transformation has become a strategic pillar adopted by organizations to develop their information systems, enhance operational efficiency, and improve the accuracy and reliability of financial reporting. In this context, sustainability accounting has emerged as a modern accounting approach that integrates environmental, social, and governance (ESG) dimensions into financial reporting, aiming to achieve a balance between financial performance and corporate social and environmental responsibility. However, the relationship between digital transformation, sustainability accounting, and the quality of financial reporting remains insufficiently explored, particularly within developing economies such as Iraq.
The main objective of this study is to analyze the impact of digital transformation on sustainability accounting and to identify its reflection on the quality of financial reporting, through developing a scientific model that explains the direct and indirect relationships among the three variables: digital transformation (independent variable), sustainability accounting (mediating variable), and quality of financial reporting (dependent variable). To achieve this objective, the study employed a descriptive–analytical approach for the theoretical framework and a quantitative field approach for the empirical investigation. A structured questionnaire was distributed to a sample of (270) respondents representing auditors, accountants, and academic specialists in accounting and auditing. A total of (262) valid responses were analyzed using the statistical software (SPSS.V.25).
The significance of the study lies in its integration of three contemporary research themes—digital transformation, sustainability accounting, and financial reporting quality—within a unified framework, which has not been sufficiently addressed in the Arabic accounting literature. The findings contribute to enhancing the financial reporting environment of Iraqi institutions by highlighting the pivotal role of digital transformation in supporting sustainable accounting practices and improving the qualitative characteristics of financial reports, such as reliability, transparency, and comparability.
The originality of the study is reflected in its attempt to combine two distinct yet interrelated research domains—digitalization and sustainability—within an applied model linking them to financial reporting quality. Furthermore, it examines the causal and mediating relationships among these variables using advanced quantitative and statistical analysis methods. The study’s application in the Iraqi context, where such research remains limited, adds practical value and expands the academic discourse on digital and sustainable accounting.
The results revealed that digital transformation exerts a significant positive impact on sustainability accounting across its technical, administrative, behavioral, and strategic dimensions. Moreover, sustainability accounting plays a vital mediating role in enhancing the quality of financial reporting. The findings also indicate that digital transformation contributes directly and indirectly to improving financial reporting quality by strengthening sustainable disclosure systems, thereby promoting transparency, accountability, and institutional trust.
