THE EFFECTS OF DIGITAL ACCOUNTING, FINANCIAL LITERACY, AND HUMAN CAPITAL ON MSME FINANCIAL REPORTING QUALITY

Minasari Nasution; Maya Syahlina

doi:10.24252/assets.v16i2.67481

Authors

Minasari Nasution Politeknik Unggul LP3M Medan, Medan, Indonesia
Maya Syahlina Politeknik Negeri Medan, Medan, Indonesia

DOI:

https://doi.org/10.24252/assets.v16i2.67481

Keywords:

Digital Accounting; Financial Literacy, Financial Reporting Quality, Human Capital, Micro, Small, and Medium Enterprises

Abstract

Purpose - This study examines the effects of Digital Accounting, Financial Literacy, and Human Capital on Financial Reporting Quality among MSMEs in Medan, Indonesia.

Methods - A quantitative explanatory design was applied using a cross-sectional survey of 100 MSME owners and managers selected through purposive sampling. Data were analyzed using SEM-PLS with SmartPLS 4. The measurement and structural models were evaluated through validity and reliability tests, VIF, R², Q², SRMR, effect sizes, and bootstrapping with 5,000 resamples.

Findings - Digital Accounting, Financial Literacy, and Human Capital each have a positive and significant effect on Financial Reporting Quality, with Human Capital showing the strongest effect.

Research Implications - Integrating digital accounting adoption, financial literacy development, and human capital strengthening can improve MSME financial reporting quality. These results can guide MSME owners, managers, and policymakers in designing training and technology programs to strengthen financial reporting practices.

Originality - This study offers an integrated perspective for improving reporting practices and supporting informed managerial decision-making in emerging-market MSMEs.

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