The Impact of Digital Accounting Practices on the Financial Performance of Small and Medium Enterprises in Bangladesh

This interdisciplinary study examines the relationship between Information and Digital accounting can enhance the performance of enterprise where financial information is used to take managerial action. This paper discusses the links between digital accounting, quality of financial reporting, the effectiveness of financial decision making and perceptions of financial performance in a framework of small/ mid-size enterprises in Bangladesh. A qualitative analysis as an example is based on the provided synthetic practice dataset that has 470 records and twenty indicators. The partial least squares structural equation modelling is used to test six direct relationships and one sequential mediation hypothesis. Reliability, convergent validity, discriminant validity, collinearity, bootstrapped effects and repeated cross validated prediction are evaluated. The quality of reporting, effectiveness of decisions, and perceived performance have a positive correlation with digital accounting practices. There is also a positive relationship between the reporting quality and both the decision effectiveness and performance. The sequential indirect coefficient has a value of 0.039 with a confidence interval that does not contain zero. The model describes 18.2 percent, 27.4 percent, and 28.4 percent of the reporting quality, decision effectiveness, and the perceived performance variance. Predictive relevance is also positive in all endogenous indicators but is small with respect to linear benchmarks. The results depict a complementary interaction of accounting routines, information quality and managerial decisions. They back up a combined analytical framework instead of empirical arguments with regard to real businesses. Substantive generalisation should still be validated with confirmed field observations and objective financial results.