IMPACT OF DATA PRIVACY AND CYBERSECURITY IN ACCOUNTING INFORMATION SYSTEMS ON FINANCIAL TRANSPARENCY

Abstract

This study investigated the impact of data privacy and cybersecurity in accounting information systems (AIS) on financial transparency, emphasizing how integrated digital governance frameworks influence the accuracy, reliability, and accountability of financial reporting. As the reliance on technology in financial management grows, safeguarding data integrity and maintaining ethical information practices have become vital components of organizational governance. The research adopted a quantitative explanatory design, supported by an extensive review of 135 peer-reviewed studies published between 2010 and 2024, to establish both theoretical and empirical foundations for the analysis. The reviewed literature provided multidimensional perspectives from accounting, information systems, and governance disciplines, highlighting the progressive convergence of privacy compliance and cybersecurity control as determinants of transparent reporting. The empirical phase of the study utilized panel data from organizations disclosing digital governance information across a ten-year period, integrating both cross-sectional and longitudinal observations. Data privacy maturity was operationalized through structured privacy programs, designated data protection officers, and adherence to international compliance certifications, whereas cybersecurity maturity was measured through control frameworks, encryption standards, intrusion detection systems, and incident response readiness. Financial transparency was assessed using a composite index that included disclosure accuracy, reporting timeliness, audit reliability, and error frequency. The results revealed that both data privacy and cybersecurity maturity exerted significant positive effects on financial transparency, confirming that firms with advanced governance and protection mechanisms reported higher levels of accuracy and disclosure clarity. Moreover, the interaction between privacy and cybersecurity demonstrated a complementary effect, indicating that organizations achieving balance between ethical data stewardship and technical resilience attained superior transparency outcomes. The mediation analysis further showed that accounting information system control strength partially mediated these relationships, translating governance practices into tangible improvements in reporting integrity. Moderation effects indicated that firm size and regulatory intensity amplified these relationships, while technological complexity slightly weakened them. Collectively, the findings underscored that financial transparency in the digital era is not solely an accounting outcome but the result of comprehensive governance integration between data privacy, cybersecurity, and internal control systems.