The Influence of Information Technology Capability on Financial Reporting Quality
Date Issued
2006
Date
2006
Author(s)
Cheng, Yi-Ting
DOI
zh-TW
Abstract
In the past, most of the researches on information technology (IT) primarily focused on its relationship with corporation performance. As to the relationship between IT and financial accounting, some researches investigated how IT could help accountants prepare financial information. But there were few studies analyzing whether IT could help firms improve their financial reporting quality. Therefore, this study wants to find out that whether the quality of financial reporting will be improved when firms devote to IT capability enhancing.
Through questionnaire, this study collected the information about their IT usage from 1,189 listed companies in Taiwan. Besides, we collected the annual reports of sample firms and the data needed for measuring financial reporting quality from the Market Observation Post System (MOPS). The research model and hypotheses are tested by 119 usable responses. The results are as follows:
Four critical IT resources, human resources of IT department, technological resources, relationship resources and strategical IT vision, all have significant positive influence on a firm’s IT capability. The better the firm’s IT capability is, the more the firm uses IT to support financial reporting. But the firm’s financial reporting quality does not improve at the same time. This unexpected result may have something to do with the top management’s attitude toward financial disclosure. The top managers may keep the financial information produced by IT for internal purpose only because of business confidentiality and the cost benefit trade-off of disclosure.
Subjects
財務報導品質
Information technology
financial reporting quality
Type
other