The Effect Of Digital Accounting Information System Utilization On The Quality Of Financial Reporting Of Micro, Small, And Medium Enterprises (Msmes) In Medan City

Abstract

This study aims to examine and analyze the effect of digital Accounting Information System (AIS) utilization on the quality of financial statements among Micro, Small, and Medium Enterprises (MSMEs) in Medan City. The study is motivated by the relatively low level of digital AIS adoption among MSMEs and the suboptimal quality of their financial statements. Given the significant contribution of MSMEs to Indonesia's Gross Domestic Product (GDP) and national economic development, improving the quality of financial reporting has become increasingly important. This study employed a quantitative approach with an associative (causal) research design. Primary data were collected through questionnaires distributed to MSME owners in Medan City who had implemented digital Accounting Information Systems. The sample consisted of 93 respondents selected using a purposive sampling technique. Data were analyzed using validity and reliability tests, classical assumption tests, simple linear regression analysis, hypothesis testing (t-test), and the coefficient of determination (R²).The results are expected to indicate that the utilization of digital Accounting Information Systems has a positive and statistically significant effect on the quality of MSMEs' financial statements in Medan City. Higher levels of digital AIS utilization are associated with higher-quality financial statements, as reflected in the characteristics of relevance, reliability, understandability, and comparability. Therefore, the implementation of digital Accounting Information Systems can enhance the efficiency, accuracy, and timeliness of financial reporting, thereby supporting more effective decision-making for MSME owners. These findings are expected to contribute to the development of accounting practices and encourage the wider adoption of digital Accounting Information Systems among MSMEs.