The Role of Management Accounting in Strategic Decision-Making under Digital Transformation

Abstract

This study aims to fill this gap by investigating the mediating effect of Management Accounting Practices (MAP) between Digital Transformation Practices (DTP) and Strategic Decision-Making Quality (SDQ). The research draws on the concepts of the Dynamic Capabilities Theory and views digital transformation as an organizational capability that can improve the ability of the management accounting systems to convert digital information into decision relevant knowledge. A quantitative survey design was used to explore the perceptions of accounting, finance and strategic decision making professionals. Descriptive statistics, reliability and validity, correlation analysis, regression analysis, and bootstrapped mediation analysis were employed in the empirical analysis. A complementary longitudinal analysis of corporate disclosures was also used to offer contextual evidence on the evolution of the discourse of digital transformation, AI and sustainability. Overall, the main findings suggest a strong positive correlation between digital transformation, management accounting practices and strategic decision making quality, with management accounting practices being found to be most associated with decision making quality. The results also suggest that attention should be paid to the consideration of construct distinctiveness and multicollinearity when interpreting the magnitude of these relationships. The secondary analysis offers additional insights into the rising importance of disclosure of digital transformation and AI in corporate reporting, whereas disclosure on sustainability showed a different temporal trend. The study has a contribution to the literature as it sees management accounting as an important organizational mechanism to which digital capability can be connected to the value created for strategic decision making. The implications for managers interested in the greater integration of digital technologies, management accounting systems and strategic decision processes are offered.