INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,

MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)

ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue I, January 2025

www.ijltemas.in Page 277

Digitalization of Accounting Practices and Financial Reporting

Quality: The Experience of Professional Accountants in Nigeria

Abdullahi Mohammed Ndakutigi*

& Ejike Sunday Okoroigwe, PhD

Department of Accountancy, Niger State Polytechnic Zungeru, Nigeria

Department of accounting, Ibrahim Badamasi Babangida University Lapai, Niger, Nigeria

*Correspondence Author

DOI : https://doi.org/10.51583/IJLTEMAS.2025.1401030

Received: 18 January 2025; Revised: 01 February 2025; Accepted: 04 February 2025; Published: 18 February 2025

Abstract: This paper examines the effect of digitalization of accounting practices on financial reporting quality in Nigeria. A web-

based self-completing questionnaire (Google form) was used to gather primary data from a sample of 372 registered and active

members of Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN).

A survey research methodology was used. A total of 352 completed questionnaires were utilised for analysis. Software such as

SPSS and SPSS AMOS were used to analyse the data. The findings showed that artificial intelligence significantly and favourably

affects the quality of financial reporting. On the other hand, the study shows that blockchain technology has negative and

insignificant impact on quality of financial reporting in Nigeria. This implies that in order for accountants to remain relevant in the

accounting profession they must urgently abreast themselves with these emerging technologies. The paper recommends that entity

managers should give top priority to implementing and incorporating of cutting-edge digital technology, such as artificial

intelligence, into their accounting procedures. Accounting professionals are also encouraged to keep up with the latest developments

in digital tools and technologies that can improve the quality of their work and financial reporting. Policymakers should create and

enforce rules and regulations that promote the use of digital tools and technologies in accounting practices. Finally, stakeholders

should continue to be receptive to the possibilities of block chain technology and stay up to date on any advancement that may

affect its usefulness in financial reporting.

Keywords: Digital Accounting, Artificial Intelligence, Blockchain Technology, Financial Reporting Quality.

I. Introduction

Producing useful information for making an informed decision among stakeholders is among the main goals of financial reporting

and accounting. The quality of accounting information presented in financial reports is crucial for all management since it is the

only way for shareholders, potential investors, and other third parties to remain informed about the activities and performance of

the companies (Olumide, Tanko & Nyor, 2016). High-quality financial reporting is increasingly more important given the present

status of the economy, as mono economies like Nigeria and emerging market nations struggle with the unpredictability of fluctuating

oil prices and currency rates. According to Owolabi, Okere & Adeleke (2020), “Accounting information system is essential to a

company's smooth operation and to complex economic decisions”. Since a lot of economic decisions rely on data from accounting

information systems, it's critical to evaluate, preserve, and enhance financial reporting quality.

The main aim of financial reporting, as stated by the International Accounting Standards Board (IASB) (2008), is to offer decision-

makers reliable and accurate accounting information about companies. This enables capital providers and other stakeholders to

make informed decisions regarding financing, investments, and other similar allocations, ultimately benefiting the overall market

efficiency. Therefore, the availability of high quality financial reporting data is crucial. Furthermore, financial statements that

include non financial information useful for decision making are considered to be a part of such high-quality financial reporting.

According to Hasan (2023), “the quality of financial reporting is significantly impacted by the information presented in the financial

report, particularly in the notes that go with it”. When evaluating the financial situation and economic activity at the conclusion of

the reporting period, high-quality reports provide pertinent and helpful information.

Additionally, according to IASB (2008) and Okoroigwe, Umar, Umar, Mohammed, & Yusuf, (2021), the two primary indicators

of the quality of corporate information regarding accounting standards are reliability and relevance, which make the information

pertinent for decision makers, as well as the enhancement of qualitative attributes like timeliness, comparability, verifiability, and

understandability. Therefore, the effect that improved quality would have on an entity's potential future performance—more

especially, how the stock market will react to it—is at the heart of one of the main arguments over the quality of financial reporting.

According to Okoroigwe, Gabriel, Umar, & Ndagi, 2022), today, an organization's digital competence is critical in the present

competitive market. Digital technology is changing quickly, making businesses more competitive and requiring them to grow

quickly and precisely. Technology is no longer an optional component in the present world of economic unification; rather, it is a

basic corporate strategy. Benefits of digital transformation that can help a business grow and increase its chances of success include

INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,

MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)

ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue I, January 2025

www.ijltemas.in Page 278

improved collaboration involving both more staff creativity and productivity, more tailored consumer interaction tactics including

both inside and between economic units, and more accurate data-driven insights (Hasan, 2023; Okoroigwe, et al., 2022).

The accounting industry has been impacted by the considerable advancements in artificial intelligence (AI) (Ke-afoon, 2023). AI

is defined by Davenport and Ronanki (2018) as the technical and scientific study of creating intelligent robots, especially smart

computer programmes that enable computers to comprehend human cognition. Among the fields where AI has had a significant

impact are accounting, auditing, and financial reporting. To be more productive and efficient in their everyday work, accounting

professionals are starting to embrace automation fields. As a consequence, accounting, auditing, and financial reporting systems

are evolving and using computer-based formats. Ke-afoon (2023) states that “As accounting databases are becoming bigger,

incorporating AI concepts is essential to reducing the likelihood that the existing system would encounter issues. In a similar spirit,

blockchain technology is expected to open up new opportunities for the accounting sector.”

The Institute of Chartered Accountants of England and Wales (ICAEW) (2018) assert that blockchain is fundamentally an

accounting technology. This assertion is based on the notion that blockchain technology might be useful for precisely recording

financial and non-financial data as well as for transferring asset ownership. The ICAEW (2018) claims that blockchain might

improve the accounting industry by giving complete control over asset ownership and history and lowering expensesassociated

with ledger maintenance and reconciliation, and enabling more efficient bookkeeping and reconciliation procedures. According to

Ernst and Young (2016), the potential value of real-time financial reporting and audits is increased since all transaction data is

maintained in current, immutable, and historical distributed ledgers. Blockchain may make it possible for auditors to examine every

transaction without ever having to use a random sample.

Consequently, studies have provided evidences on the correlation between e-accounting practices and the current state of financial

report quality. For instance, how artificial intelligence affects the calibre of financial reporting; Al-Sammarraee and Alshareeda

(2021) in Bahrain, Aljinovic and Bilic (2021) in Croatia, Abdullah et al. (2021) in Jordan, Ke-afoon (2023) in America had provided

results showing correlation between e-accounting practices and financial report quality. All these studies are foreign thereby

creating a geographical gap to investigate further in different location using different subjects.

Also, blockchain technology and, studies reviewed indicated a mixed result. Alkafaji et al. (2023), Alshanti and Elessa (2023), Han

et el. (2023) all reported significant positive correlation between blockchain technology and quality of financial report. On the other

hand, Cadiz et al. (2022), Siyue (2022) reported a contrary view. These divergence views have created empirical evidence gap for

this study to analyze further using different methodology. This study is different from previous studies in terms of population,

location and data collection procedure.

II. Literature Review

Conceptual Review

Financial Reporting Quality

The official method of informing interested parties about a company's financial activity is via financial reporting. Financial

reporting, according to Johnson and Festus (2021), is a way of informing shareholders and other consumers of such information to

make judgments about the financial state of an entity's activities in the previous year. Stated differently, it is the method by which

an organisation shares its financial performance that has been produced and presented in accordance with standard practice, giving

shareholders and other interested parties, the chance to evaluate the organization's performance and make choices (Okoroigwe et

al. (2021). It is widely acknowledged that it is considered imperative to possess a crucial instrument for any form of participation

in the market, as it serves to mitigate uncertainty and discord among all parties concerned (Olufemi et al., 2021).

The concept of financial reporting quality is widely comprehended to encompass the delivery and revelation of both financial and

non-financial data that is indispensable for users to render well-informed choices (Okoroigwe, et al., 2021). It is held that the worth

of accounting information, contingent upon the employed information system, has an impact on the excellence of financial reporting

(Olufemi et al., 2021). High-quality financial reporting is thus necessary to improve market efficiency and help users make

investment choices (Olufemi et al., 2021). Therefore, in order to provide the necessary data that will be pertinent and trustworthy

for users' decision-making, the implementation and use of proper technology to an entity's accounting information system is

important (Olufemi et al., 2021).

Financial Reporting Quality Indicators

The primary and secondary qualitative features of financial information as outlined in the IASB's financial reporting framework are

used to assess the dependent variable of this study, financial reporting quality. Relevance, consistency, dependability,

comprehensibility, and comparability are some of the most prominent reporting quality indicators (Okoroigwe, Ukagha, Abalaka,

Ibrahim and Shaba, 2021; Asukwo and Enobong 2023; Hassan, 2023).

Relevance is defined as the effectiveness of financial data and reports as well as their capacity to offer adequate and pertinent

information to support decision-making, with the goal of ensuring that this information is appropriately presented, timely, and

deemed suitable for use in making decisions (Okoroigwe, et al. 2021).

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Reliability is the capacity to depend on something. If accounting data is impartial and error-free, it may be considered dependable.

(That is, faithfully represented and verifiable) (Okoroigwe, et al., 2021; Hassan, 2023). When an organization employs a fixed

accounting procedure from one period to the next without modification, consistency is attained.

Understandability: This attribute aids in assessing the importance the data provides to the user of accounting information contained

in the financial reports and their contents (Okoroigwe, et al. 2022).

Comparability: This function enables decision-makers using financial reports to assess accounting data over several periods

(Okoroigwe et al. 2021).

Digitalization of Accounting Practices

The modern world is undergoing immense change at an accelerating pace, which has a variety of effects on people, organizations,

and communities (Olufemi et al., 2021). The introduction of new technologies, which often offer a wealth of potential advantages,

is one of the most significant developments (Olufemi et al., 2021). Due to the phenomenon of globalization, it has become

imperative for business entities to cultivate information systems that possess prompt responsiveness and sufficient efficiency in

order to furnish timely, precise, and reliable business information for the purpose of bolstering decision-making (Olufemi et al.,

2021). This is because business value chain activities are changing at a faster rate than ever before (Olufemi et al., 2021). However,

commercial markets and users of business information require procedures and circumstances to improve the reporting process's

speed, accuracy, and openness since users of accounting and conventional financial reporting continue to distort facts and lack

proper analysis. Thus, it is essential to establish a number of suitable corporate reporting systems in order to address these issues

(Borhani et al., 2021). As a result, any company that wants to process, communicate, and distribute cutting edge financial

information continuously and sustainably must apply information strategies for accounting information systems that are designed

to enhance productivity and also maintain business processes.

Asukwo and Enobong (2023) characterize advanced accounting as the age, portrayal, and move of monetary information in an

electronic manner as opposed to using traditional paper techniques. Each accounting exchange happens electronically, and pertinent

computerized advances are utilized to make monetary reports. In this activity, an organization of PCs processes monetary

exchanges. Essentially, Oladejo and Yinus (2020) characterized computerized accounting as any accounting framework that utilizes

ICT application apparatuses and gadgets to gather, record, process, investigate, and spread data about monetary transactions and

accounting exchanges for stakeholders to make sound judgment. Therefore, this study utilized online accounting (distributed

computing), blockchain innovation (BCT), man-made reasoning (artificial intelligence, AI), to show the presence of an e-

Accounting framework. The coherent and physical objects, information, programming, equipment, rules, processes, ranges of

abilities, and obligations interacting to robotized organization financial reporting capabilities is known as digital accounting Oladejo

and Yinus (2020).

Indicators of Digital Accounting

The adoption and use of the following digital mechanism by the organization's accountants to generate financial reports will serve

as the measurement tools for this study's independent variable, the digitalization of accounting practices as adopted from Ke-afoon

(2023), Borhani et al. (2021), Hassan (2023), Asukwo and Enobong (2023).

Artificial Intelligence (AI)

A computer or piece of software that can exhibit behavior that is indistinguishable from that of the human brain is referred to as

artificial intelligence (AI) (Oladejo and Yinus, 2020). These days, a lot of software comes with expert knowledge preinstalled and

has the ability to "learn" how to enhance its own operations and output (ACCA, 2013). Bots, or software agents, are all over the

internet. They imitate human behavior by learning, making choices on their own, and interacting with one another. AI has

ramifications for business and practice (ACCA, 2013). While smart systems, bots, and other AI technologies might be beneficial,

they can also provide possibilities and difficulties for accountants.

Blockchain Technology

A blockchain is an electronic record that has been designed to document transactions occurring within a network involving various

participants (Nielson, 2023). It functions as a distributed ledger, utilizing the Internet and a peer to peer system, which maintains a

comprehensive record of all transactions since its inception (Nielson, 2023). Each user within this shared database is regarded as a

"node" linked to the blockchain, whether it is owned by a person or an organisation, thereby retaining a singular version of the

ledger (Oladejo and Yinus, 2020). Each addition of a transaction to the blockchain represents an exchange of value between the

involved parties, typically in the form of a digital asset indicating ownership, rights, or responsibilities (Nielson, 2023).. Various

blockchains are presently being created and scrutinized, although the majority adheres to this overarching structure and

methodology (Nielson, 2023).

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Figure1: Conceptual Framework of the Study.

Empirical Review

Artificial Intelligence (AI) and Financial Reporting Quality

Al-Sammarraee and Alshareeda (2021) carried out a study that focused on the contribution of artificial intelligence statements in

Bahrain via the use of automated accounting information systems. The results showed that a number of variables may be used to

improve the calibre of financial accounts. The researchers recommended the incorporation of AI techniques into accounting systems

to increase efficiency and effectiveness of financial reporting. Furthermore, they emphasized the need for universities to enhance

the scientific and practical qualifications of accountants. In a similar time frame, Aljinovic and Bilic (2021) examined, using

machine learning especially, the impact of corporate variables on the calibre of financial reporting. But their research was carried

out in a different area and industry. The goal was to assess the financial reporting quality (FRQ) of listed companies in Croatia,

which has an immature capital market and a macro-based accounting system. The research also sought to determine the

characteristics of businesses that affect FRQ. In addition to critically analysing the driving policies and directives that impact a

variety of qualitative and quantitative, as well as financial and non-financial, elements inside organisations, the study offers a

thorough examination of the body of information currently available on financial ratio analysis (FRQ). The methodology involved

a joint examination of economic assumptions and the utilization of machine learning techniques (MLT). The M5 algorithm was

employed to determine factors which impact quality of volunteer reporting and the direction and strength of those influences.

Findings demonstrated that profitability; the length of time a company Having been listed on the stock market for a certain number

of years, and the size of the business has a big impact on the level and scope of reporting quality via voluntary information disclosure

in Croatian quoted companies' annual financial statements. Furthermore, variations in FRQ were discovered based on the type of

auditor and across various economic activity sectors. According to the paper's conclusion, Croatian businesses should use strong

reporting methods to satisfy international standards and so enhance the system's overall openness. The appropriate regulatory bodies

are expected to do the same and promote complete disclosure.

Employing an exploratory and analytical methodology, the researchers engaged in data gathering and evaluation to derive their

findings. The theoretical literature on the subject matter, as presented in references and scientific publications, was thoroughly

reviewed prior to the administration of a questionnaire to elicit the perspectives of the study participants. To assess the significance

of the research inquiries, the researchers utilized several statistical measures including the mean, standard deviation, T-test,

ANOVA. Furthermore, Abdullah Saleh et al. (2021) a basic linear regression analysis was employed to scrutinize impact of applied

the use of artificial intelligence in Jordanian hotels to integrate accounting information systems. The findings revealed a correlation

between the two variables, denoted by R=0.596. Moreover, this percentage could be attributed to the utilization of applied artificial

intelligence in Jordanian hotels, with an R2 value of 0.355 accounting for the variance of dependent variable (accounting

information systems integration). Additionally, the examination demonstrated that the independent variable artificial intelligence,

incorporated into accounting systems of Jordanian hotels, possessed a Beta value of 0.596, while the fixed limit value was

determined to be 2.060.

The study by Ke-afoon (2023) sought to illustrate how artificial intelligence is currently used in financial reporting, auditing, and

accounting in United States. Descriptive research design was used and obtained data using secondary sources. Results indicated

that financial reporting, auditing, and accounting are currently using variety of AI technologies. Artificial intelligence (AI) systems

attempt to develop collective behaviour and practice by using technological know-how and human experiences as givens. AI enables

automated data input, which has broadened the accounting area and allowed for the integration and handling of enormous volumes

of data in contemporary accounting.According to the study, standardizing the AI system within the accounting paradigm is crucial

for future policymakers to guarantee high-quality systems that follow accounting principles.

Blockchain Technology (BCT) and Financial Reporting Quality

Alkafaji, Dashtbayaz, and Salehi (2023) investigated the impact of blockchain on the quality of information for Iraqi companies

that were listed and those that were not. The statistical population for the study was divided into two parts: the first part examined

the level of knowledge that managers, independent auditors, and accountants had about blockchain technology, and the second part

examined the impact of blockchain technology on accounting data accuracy. A Likert scale was included into a structured survey.

PLS statistical software was used to analyse the collected data. Cochran's technique was used to calculate the sample size, and 1528

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respondents were chosen as indicative of the sample size. The findings demonstrate that knowledge of blockchain technology has

raised the calibre of data in both publicly traded and privately held businesses. Put another way, the use of blockchain technology

has led to a notable improvement in the quality of accounting data. This suggests that the quality of accounting data for Iraqi

companies, both public and unlisted, is influenced by information technology (Blockchain). Additionally, Alshanti and Elessa

(2023) conducted a theoretical and empirical study to examine the impact of digital transformation on the precision of financial

records and the efficacy of corporate governance by using blockchain technology in banks. The descriptive-analytical method was

used to analyse the variables and dimensions of the study. Data lists were developed to collect data from members of the field

research community who were employed by Jordanian banks as analysts, auditors, and financial managers. The analysis was done

using SPSS. The rejection of the first and third null hypotheses suggests that integrating blockchain technology into digital

transformation might enhance company governance and the quality of accounting information. Similarly, the second and fourth

alternatives were ruled out. A digital move towards blockchain adoption in business operations is recommended in order to profit

from the advantages that blockchain technology provides, such as its capacity to improve accounting information accuracy and

fortify corporate governance.

Similarly, Han et al. (2023) looked at whether experts might use blockchain data to make better decisions. To achieve this,

consideration was given to the characteristics of consensus-driven blockchain data, which include immutable, append-only,

shareable, and verifiable. The study also looked at how blockchain technology may increase openness and confidence in the

accounting sector. Blockchain protocol certification by various parties provides real-time, reliable data that boosts auditors'

confidence and efficiency in the area of AI systems. The study on blockchain technology's impact on accounting record keeping

has yielded four main themes: event-based accounting, real-time accounting, triple entry accounting, and continuous auditing. Using

agency theory and stakeholder theory, the study explains how blockchain technology may reduce information asymmetry and

encourage stakeholder cooperation. The report carefully outlines the challenges that come up and highlights how crucial it is to

employ blockchain technology cautiously in business settings. The study suggests that future research exploit the themes identified

and address the challenges raised in this analysis to help practitioners and policymakers improve their methods. It also emphasises

the need for collaboration among practitioners, system developers and designers, and regulators to foster the development of

blockchain ecosystems suitable for accounting and auditing in the era of digital transformation.

Additionally, Cadiz and Seethamraju (2022) examined how blockchain technology was being used by clients and how this would

affect Australian accounting companies' financial statements and audits. The majority of the data was collected via semi-structured

interviews with a range of participants, including audit partners from first- and second-tier accounting firms in Australia. These

interviews focused on how blockchain technology affects several aspects of financial statement audit management, such as

planning, risk assessment, audit evidence, engaging and retaining stakeholders, and reporting. Changes to financial statement audits

were evaluated through the lenses of professionalism and commercialism.The findings suggested that, although the number is small,

Australian accounting firms have engaged with or explored relationships with clients involved in bitcoin businesses and blockchain

platform. Some individuals believe that blockchain technology, due to its uniqueness, introduces risks that have not been

encountered in previous audit engagements. These risks may result in changes to organizational structures, audit procedure, and the

conduct of financial statement audit. The study results demonstrated that professionalism and commercialism have complementary

logics rather than being mutually exclusive. They provide businesses with opportunities to apply and enhance their audit knowledge

in a new area of auditing, while also presenting challenges.

Siyue (2022) hypothetically investigated how blockchain technology might affect financial reporting. The study contrasts the

benefits of blockchain technology on three areas: digital financial information, high-quality accounting information, and

bookkeeping. Blockchain may significantly improve accounting bookkeeping procedures and solve the issues of traditional

bookkeeping, which is labor-intensive and prone to manipulation, using its distributed bookkeeping and timestamp technology.

Enterprise financial information can be more timely, secure, and reliable thanks to its digital signature, timestamp, and real-time

data transmission technologies. Innovative contract technology can actualize the digitalization of financial data and accomplish the

goal of business economic integration by enabling inter-enterprise transaction procedures to be executed automatically and recorded

in real-time.This study also reveals that most academic research is still in the theoretical stage because of the incomplete

development of current technologies. Most researchers are optimistic about the widespread practical application of blockchain and

pay less attention to potential issues that may arise. Based on current research and literature, this study also offers some predictions

for the future of financial reporting, predicting that financial reporting will become more intelligent, safe, and personalized, and

that corporate financial management systems will change.

Using the technology acceptance approach, using blockchain technology to improve financial reporting. Borhani et al. (2021)

examined existing theoretical and experimental underpinnings, produced theoretical model, and identified variables influencing

adoption of technology in financial reporting. The study employed a sequential-exploratory design and employed cross-sectional

data. The population of the study included professors in accounting and auditing, members of the Society of Certified Public

Accountants, and specialists in IT, and finance. The findings showed that blockchain technologies are being adopted by financial

reporting, with primary driver being the technology's perceived utility based on has positive impacts on the information's quality

component. The characteristics that influenced the current goal of system application in the financial reporting area and caused

financial reporting developers to embrace new methodologies are better understood thanks to this study.Pizzi et al. (2022) studied

how to manage and integrate blockchain technology into sustainability reports in Italy. The study expands on what is known

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scientifically regarding the effects of notarizing required sustainability reports via a blockchain that is accessible to the general

public. In order to reduce the information asymmetries that has a detrimental effect on stakeholder involvement. The analysis shows

that one effective way to lessen the information asymmetry between businesses and stakeholders is to notarize non-financial data

using a publicly accessible blockchain.

Underpinning Theories

This research work is anchored on information system success theory and technology acceptance theory in line with the previous

studies such as Borhani et al. (2021), Asukwo and Enobong (2023). Relating these theories with this study, an information system

is fundamentally made up of people, information, software, hardware, and processes working together to provide the intended

outcomes. This study's independent variable, digital accounting practices, and dependent variable, financial reporting quality, have

direct bearing with these theories. Furthermore, regardless of an information system's complexity, users' acceptance and trust are

essential to overcome their reluctance to adopt new technology and enable its adoption and implementation. As a result, it's critical

to understand and consider the elements impacting users' decisions to use a particular system at every stage of the development

process. Since technology gave rise to the hardware and software that are currently revolutionizing the role and responsibilities of

accountants worldwide, as shown by Technology Acceptance theory, organizations and individuals will embrace new technology

with positive attitudes and intentions if they find it to be practical and user-friendly.

III. Methodology

This research adopted a survey design method, population comprise of 2,716 registered and practicing professional members of the

Association of National Accountants of Nigeria (ANAN) and the Institute of Chartered Accountants of Nigeria (ICAN) as of May

2024. A sample of 338 people was chosen for the study using basic random sampling techniques and Krejcie& Morgan's (1970)

methodology for calculating sample size of a known population. However, the research added 10% of the calculated sample size to

account for the impact of respondents who may not return their questionnaire, resulting in a final sample size of 372 members. This

decision is in line with (Bolarinwa, 2020). The study employed structured close-ended likert scale questionnaire to obtain responses

from the respondents via Google survey form. SPSS and SPSS AMOS were utilized to conduct data and regression analysis between

study variables. Reliability and validity of the study instrument was ensured using Cronbach’s alpha test, content and construct

validity.

IV. Results and Discussion

This study grouped analysis of data into two groups. While the second group deals with the study's findings, the first group deals

with the demographic data of the respondents.

Table 1 Professional Membership

Frequency Percent Valid Cumulative Percent Percent

Valid

ICAN

ANAN

180

172

51.0

49.0

51.0

49.0

51.0

100.0

Total

352

100.0

The table 1 outlines the professional memberships of the respondents. The majority are members of ICAN (Institute of Chartered

Accountants of Nigeria), making up 51.0% of the sample, followed closely by ANAN (Association of National Accountants of

Nigeria) at 49.0%. This distribution highlights that responses from ICAN members is 2% higher than those from ANAN members

representing the two dominant professional affiliations of the respondents.

Table 2 Collinearity Statistics

Model

Tolerance VIF

(Constant)

Artificial Intelligence

Blockchain Technology

0.798 1.253

0.640 1.564

a. Dependent Variable: Financial Reporting Quality

The table provides collinearity statistics for the independent variables in a model predicting Financial Reporting Quality. The

Tolerance values range from 0.640 to 0.798, and the Variance Inflation Factor (VIF) values range from 1.253 to 1.564. Since all

VIF values are below 10 and all Tolerance values are above 0.1, there is no significant multicollinearity among the variables

(Artificial Intelligence and Blockchain Technology) in this model. This suggests that each variable provides unique information in

predicting Financial Reporting Quality.

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Table 3 Squared Multiple Correlations: (Group number 1 Default model)

R-square

FRQ

0.844

The R-square value of 0.844 for Financial Reporting Quality (FRQ) shows that the independent variables in the model account for

around 84.4% of the variation in FRQ. This high R-square value indicates that the result and the predictors have a significant

connection. This implies that the model is effective in capturing the factors that influence financial reporting quality. An R-square

value above 0.8 typically indicates a very good fit, demonstrating that the model provides significant explanatory power regarding

the variations in FRQ, thereby highlighting the importance of the included independent variables in understanding and predicting

financial reporting quality.

Table 4 Regression Weights: (Group number 1 - Default model)

Estimate

S.E.

C.R.

FRQ

<---

AI 0.623

0.140

4.441

***

FRQ

<---

BT-0.236

0.149

-1.586

0.113

The regression weights table summarizes the relationships between various independent variables and Financial Reporting Quality

(FRQ) in the default model. The estimates represent the strength and direction of these relationships, while the standard errors (S.E.)

provide an indication of the variability of these estimates. The critical ratios (C.R.) and p-values (P) help assess the significance of

each relationship.

V. Discussion of Findings

The first research hypothesis posited that Artificial Intelligence (AI) would not significantly impact Nigeria's financial reporting

standards. Nonetheless, the study's conclusions showed that AI does, in fact, significantly and favourably affect the nation's financial

reporting standards. This result implies that improving the precision and efficacy of financial reporting is facilitated by the

incorporation and use of AI technology. The findings are consistent with those of earlier studies conducted by Al-Sammarraee and

Alshareda (2021)., Abdullah Saleh et al. (2021), and Ke-afoon (2023), which also reported that AI positively influences financial

reporting quality. This consistency with existing literature underscores the growing importance of AI in improving financial

practices and supports the notion that AI-driven advancements are beneficial for achieving higher standards in financial reporting.

According to the second study hypothesis, Nigerian financial reporting quality will not be significantly impacted by blockchain

technology. The investigation's conclusions showed that, in contrast to predictions, blockchain technology has a detrimental and

statistically negligible effect on the nation's financial reporting standards. This result is in contrast to previous research that

demonstrated that blockchain technology considerably improves the quality of financial reporting, such as that conducted by Cadiz

and Seethamraju (2022) and Alkafaji et al. (2023). This discrepancy suggests that the degree to which blockchain technology

enhances financial reporting may fluctuate based on the situation or method of deployment, underscoring the need for further study

to determine the variables affecting its effects in various contexts.

Conversely, the research discovered that the nation's financial reporting requirements are significantly and favourably impacted by

artificial intelligence (AI). According to this research, implementing and using AI technology enhances financial reporting's

precision and effectiveness. These findings align with earlier research by Al-Sammarraee and Alshareda (2021).

VI. Conclusion

The study's goal was to find out how the digitalization of accounting processes, in particular blockchain technology (BCT) and

artificial intelligence (AI), has affected the quality of financial reporting in Nigeria. The results show that the quality of financial

reporting is much improved when digital technology, such artificial intelligence, is included into accounting procedures. This

significant effect suggests that AI tool and systems improve accuracy, transparency of financial reports leading to more reliable and

timely financial information. The results underscore the importance of adopting advanced digital solutions in accounting to achieve

higher standards of financial reporting, thereby benefiting stakeholders and contributing to more robust financial management

practices in Nigeria. Blockchain Technology had no discernible effect on the quality of financial reporting in this study, exploring

its potential for other applications within the organization might still be beneficial.

Recommendations

The paper recommends that entity managers should give top priority to implementing and incorporating of cutting-edge digital

technology, such as artificial intelligence, into their accounting procedures. Accounting professionals are also encouraged to keep

up with the latest developments in digital tools and technologies that can improve the quality of their work and financial reporting.

Policymakers should create and enforce rules and regulations that promote the use of digital tools and technologies in accounting

practices. Finally, stakeholders should continue to be receptive to the possibilities of block chain technology and stay up to date

on any advancement that may affect its usefulness in financial reporting.

INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,

MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)

ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue I, January 2025

www.ijltemas.in Page 284

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