The impact of digital accounting practices on agency costs management: Evidence from an emerging market

Type of the article: Research ArticleThe increased penetration of digital technologies has significant implications for the role of digital accounting practices in enhancing corporate governance, particularly in emerging markets where agency problems are more serious. This study aims to investigate the impact of digital accounting practices on agency costs management in emerging markets. Using the theoretical foundations of agency theory and institutional theory, the study investigates the role of the application of blockchain technology and artificial intelligence in the management of agency costs and the efficiency of financial reporting. The study used a balanced panel data set comprising 72 non-financial and financial firms listed on the Amman Stock Exchange from 2018 to 2023. To investigate the impact of applying digital accounting practices, the study used a multi-model approach by employing a fixed-effect regression model with a propensity score matching approach and a difference-in-differences approach. The study found that adopting digital accounting practices by firms is associated with a significant reduction in monitoring costs evidenced by a reduction in audit fees, a reduction in bonding costs captured by a reduction in the reliance on fixed management compensation, and a slight improvement in the efficiency of financial reporting. Industry-level analysis showed that financial sector firms are more inclined towards the application of digital accounting practices due to the regulatory environment, while the application of digital accounting practices by industrial sector firms is less pronounced resulting from capability constraints. The study provides empirical support that digital accounting practices can be used as a cost-efficient mechanism of corporate governance in the context of emerging markets.

• Publication year

  2026

• Venue

  Accounting and Financial Control

• Publication date

  2026-03-05

• Fields of study

  Not labeled

• Identifiers
  DOI 10.21511/afc.07(1).2026.06
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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