The Impact of Artificial Intelligence and Digital Transformation on Financial Reporting Quality: Insights From Saudi Arabia

The study explores the effects of the implementation of artificial intelligence (AI) and ‎digital transformation (DT) on financial reporting quality (FRQ) in Saudi-listed ‎companies. Based on the Technology-Organization-Environment (TOE) model and ‎Agency Theory, the study determines the effect of technological innovations on the ‎quality, timeliness, and reliability of financial reporting in an emerging market with a ‎rapidly changing environment under the Saudi Vision 2030. The study utilizes multiple ‎regression analysis to test the hypotheses proposed using panel data of the 150 non-‎financial companies listed on the Saudi Stock Exchange (Tadawul) between the years ‎‎2019-2023. Both AI adoption and DT transformation positively and significantly affect ‎FRQ, and, therefore, the conclusion that technology makes the transparency of ‎information, the lack of information asymmetry, and compliance with international ‎standards stronger can be made. The research adds to the literature because it expands ‎previous research on financial reporting and technology to the Saudi context, provides ‎a theoretical understanding of how innovation can solve agency problems, and it also ‎offers practical suggestions to managers, regulators, and investors. In general, the ‎results highlight the strategic relevance of AI and DT as complementary sources of ‎quality financial reporting in emerging markets‎.