Digital Accounting Systems, Big Data Analytics, and Ethical Awareness in Improving Public Sector Financial Reporting Quality

Salehoddin Salehoddin

doi:10.28944/masyrif.v6i2.2432

Digital Accounting Systems, Big Data Analytics, and Ethical Awareness in Improving Public Sector Financial Reporting Quality

Salehoddin Salehoddin

Abstract

This study aims to examine the integrated structural relationships among Digital Accounting Systems, Big Data Analytics Capability, and Ethical Awareness in enhancing Public Sector Financial Reporting Quality, with the mediating interplay of Professional Skepticism, Forensic Accounting Practices, and Public Value under AI-driven audit governance. A quantitative approach was employed involving 250 internal auditors/inspectors (regional inspectorates) across East Java Province as the research sample. Data were analyzed using WarpPLS with a Structural Equation Modeling (SEM-PLS) technique. The findings reveal that Digital Accounting Systems, Big Data Analytics Capability, and Ethical Awareness each have a positive and significant effect on Professional Skepticism, Forensic Accounting Practices, and Public Value. Furthermore, Professional Skepticism, Forensic Accounting Practices, and Public Value are proven to positively and significantly contribute to improving Public Sector Financial Reporting Quality. Mediation results also indicate that Professional Skepticism, Forensic Accounting Practices, and Public Value function as important mediating mechanisms in strengthening the influence of Digital Accounting Systems, Big Data Analytics Capability, and Ethical Awareness on financial reporting quality. This research contributes to public sector accounting literature by highlighting the strategic role of digital transformation, analytical capability, and ethical commitment in fostering trustworthy and value-driven government financial accountability. Practically, the findings provide insights for policymakers and internal audit institutions to optimize AI-driven audit governance and reinforce public trust through higher quality financial reporting.

Keywords

Digital Accounting Systems, Big Data Analytics Capability, Ethical Awareness, Professional Skepticism, Forensic Accounting Practices, Public Value, Public Sector Financial Reporting Quality, AI-Driven Audit Governance

References

Ahn, Y., & Lee, H. (2024). Digitalization and transparency in government financial reporting: The role of accounting information systems. Government Information Quarterly, 41(1), 112–129.

Alshurafat, H., Beattie, C., & Jones, G. (2023). Professional skepticism and audit judgment in the era of analytics: Evidence from public sector auditors. International Journal of Auditing, 27(2), 255–272.

Ayedh, A., Ramadan, M., & Almubark, R. (2024). Data analytics capability and fraud detection effectiveness in government audit institutions. Journal of Public Budgeting, Accounting & Financial Management, 36(2), 421–442.

Baihaqi, M., & Yudha, T. (2023). Ethical awareness in public financial accountability: Moderating political pressure on auditors. Asian Journal of Accounting Research, 8(3), 167–183.

Bouhadid, A., & Taktak, N. (2025). Digital accounting systems and audit quality in public sector modernization. Public Money & Management, 45(1), 39–51.

Dewi, R., & Kusuma, H. (2023). Big data analytics and forensic accounting effectiveness in preventing fraud: Evidence from Indonesian inspectorates. Jurnal Akuntansi & Auditing, 27(4), 310–326.

Fisher, R., & Salterio, S. (2024). Public value orientation and quality of governmental financial statements: An accountability view. Financial Accountability & Management, 40(2), 201–230.

Gomes, P., & Mendes, S. (2022). Ethics and skepticism in public sector auditing: A behavioral lens. Journal of Business Ethics, 181(3), 785–802.

Khan, I., & Hassan, M. (2023). Forensic accounting practice and financial reporting integrity in government sectors. Journal of Forensic and Investigative Accounting, 15(1), 99–123.

Krishnan, G., & Zhang, J. (2024). Auditor skepticism under AI-enabled audit environments: Judgment risks and safeguards. Auditing: A Journal of Practice & Theory, 43(1), 131–150.

Li, X., & Zhou, W. (2025). Artificial intelligence governance and public value creation in digital auditing. International Journal of Public Administration, 48(3), 210–226.

Mulyani, S., & Putra, W. (2024). Digital transformation in government accounting: Implications for fraud risk mitigation. Journal of Accounting and Organizational Change, 20(2), 390–410.

Nguyen, T., & Tran, K. (2023). Big data competencies for public sector auditors: Impacts on judgement and reporting quality. Journal of Accountancy & Technology, 19(4), 145–162.

Osei, E., & Kusi-Appiah, E. (2022). Public sector ethics and trust in financial accountability systems. International Review of Administrative Sciences, 88(5), 1134–1152.

Rahman, A., & Abdullah, N. (2025). Forensic audit integration for improving public financial reporting quality. Managerial Auditing Journal, 40(1), 59–80.

Siregar, G., & Ananda, F. (2024). Professional skepticism as a mediator in the relationship between digital accounting capabilities and audit outcomes. Journal of Public Sector Accounting, 18(2), 78–95.

Tariq, H., & Rasheed, S. (2023). Ethical competence, whistleblowing intent, and forensic audit performance in government agencies. Journal of Financial Crime, 30(4), 1206–1224.

Full Text: PDF

DOI: 10.28944/masyrif.v6i2.2432