From Digital Accounting Capability to MSME Sustainability: The Mediating Role of Financial Reporting Quality and the Moderating Role of Financial Literacy

Martinus Budiantara; Rochmad Bayu Utomo; Rini Setyastuti

doi:10.61255/jeemba.v4i6.2331

Authors

Martinus Budiantara Universitas Mercu Buana Yogyakarta
Rochmad Bayu Utomo Mercu Buana University, Yogyakarta
Rini Setyastuti Universitas Atma Jaya, Yogyakarta, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i6.2331

Keywords:

Digital accounting capability, Financial reporting quality, Financial literacy, MSME sustainability, Structural equation modeling

Abstract

Purpose - This study examined whether digital accounting capability was associated with the sustainability of micro, small, and medium-sized enterprises (MSMEs), and whether financial reporting quality and financial literacy served as a mediator and moderator, respectively.

Methodology: An explanatory cross-sectional survey of 258 MSME managers in the Special Region of Yogyakarta and Central Java, Indonesia, was analyzed using structural equation modeling with LISREL. Six hypotheses covered direct, indirect, and interaction pathways.

Results: Digital accounting capability was not significantly associated with financial reporting quality or MSME sustainability. Financial reporting quality was positively associated with sustainability (coefficient = 1.45; t = 9.57). Its indirect pathway from digital accounting capability was not significant (coefficient = −0.05; t = −1.31). Financial literacy did not significantly moderate the digital accounting capability–reporting quality relationship (coefficient = 0.01; t = 1.94), but the financial reporting quality × financial literacy interaction was significant and negative (coefficient = −0.02; t = −3.84).

Contribution: The results distinguish digital accounting capability from the quality of accounting information and show that financial literacy did not uniformly strengthen the tested relationships. The cross-sectional estimates support associations, not causal claims.

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