Re-Architecture of Financial Reporting Quality Through: Digital Technologies and the Evidence on Attribute-Level Heterogeneity and Trade-offs

ABSTRACT : Purpose: This study investigates how digital technologies re-architect financial reporting quality by generating heterogeneous and sometimes conflicting effects across its underlying attributes. Rather than assuming a uniform improvement in reporting outcomes, the study examines whether technologies such as artificial intelligence and blockchain simultaneously enhance certain quality attributes while constraining others. Method: An empirical analytical approach is employed using firm-level data from listed companies. Financial reporting quality is decomposed into its core qualitative attributes—relevance, faithful representation, understandability, verifiability, comparability, timeliness, and auditability—allowing for a disaggregated assessment of digital technology effects. Design and Approach: The study adopts a multi-dimensional research design combining regression analysis with interaction models to capture internal trade-offs among quality attributes. Digital technology adoption is proxied through disclosure-based and governance-related indicators. Robustness tests are conducted to address endogeneity concerns and alternative model specifications. Findings: The findings indicate that digital technologies do not uniformly enhance financial reporting quality. While adoption is associated with higher relevance, timeliness, and verifiability, it is also linked to reduced understandability and, in some cases, diminished comparability. These results provide systematic evidence of attribute-level trade-offs rather than a unidirectional quality improvement. Originality and Value: The study reconceptualizes financial reporting quality as a re-architected system shaped by digital technologies, moving beyond aggregate quality measures toward an attribute-level perspective. Theoretical, Practical, and Social Implications: The results advance accounting theory by highlighting internal tensions within reporting quality, inform regulators and standard setters about unintended digital consequences, and support stakeholders’ demand for balanced, transparent, and decision-useful financial reporting.