Financial Reporting Integrity in the Digital and Sustainability Era: A Systematic Literature Review on Governance, ESG, and Technological Transparency

Winda Wulandari; Sri Widyastuti; Harnovinsah Harnovinsah; Dwi Prastowo

doi:10.59261/inkubis.v8i2.348

Authors

Winda Wulandari Institut STIAMI
Sri Widyastuti Universitas Pancasila
Harnovinsah Universitas Pancasila
Dwi Prastowo Universitas Pancasila

DOI:

https://doi.org/10.59261/inkubis.v8i2.348

Keywords:

Artificial Intelligence, Corporate Governance, ESG Reporting, Financial Reporting Integrity, Sustainability Accountability

Abstract

Background: Digital transformation, sustainability demands, and evolving governance standards have challenged financial reporting integrity. However, existing studies have largely examined governance, ESG disclosure, and digital technologies separately, resulting in fragmented perspectives that limit a comprehensive understanding of their interrelationships.

Objective: This study systematically reviews and synthesizes research on financial reporting integrity by examining how sustainability pressures, digital transformation, and governance mechanisms converge to reshape transparency and accountability in corporate reporting.

Methods: A Systematic Literature Review (SLR) guided by the PRISMA 2020 guidelines was conducted. Data were sourced from the Scopus database and covered publications from 2021 to 2025. Following rigorous inclusion and exclusion screening procedures, 28 peer-reviewed articles were selected from an initial pool of 713 records. The TCCM Framework (Theory, Context, Characteristics, and Methodology) was applied to classify, evaluate, and synthesize the research findings.

Results: Agency Theory and quantitative research methods dominate the field. Recent studies increasingly emphasize ESG disclosure, blockchain technology, and artificial intelligence (AI) as key determinants of transparency. Significant research gaps remain regarding cross-disciplinary approaches, emerging market contexts, and ethical risk assessments in digital reporting practices. This review reconceptualizes financial reporting integrity as a multidimensional socio-technical governance phenomenon shaped by governance accountability, sustainability legitimacy, and technological transparency.

Conclusion: Future research should adopt interdisciplinary, mixed-method, and cross-country research frameworks to investigate greenwashing mechanisms, digital reporting ethics, and the interplay between emerging regulatory frameworks, including the International Sustainability Standards Board (ISSB) Standards and IFRS Sustainability Disclosure Standards, and technological transformation within sustainability-oriented reporting environments.

Downloads

Download data is not yet available.

References

Allini, A., Prisco, M., Ziebart, D. A., & Macchioni, R. (2025). Earnings management by banks through loan loss provisioning during downturns. Journal of Accounting and Public Policy, 50. https://doi.org/10.1016/j.jaccpubpol.2025.107282

Budiman, M. A., Soetjipto, B. W., Kusumastuti, R. D., & Wijanto, S. (2023). Organizational agility, dynamic managerial capability, stakeholder management, discretion, and project success: Evidence from the upstream oil and gas sectors. Heliyon, 9(9). https://doi.org/10.1016/j.heliyon.2023.e19198

Bui, B., Houqe, M. N., & Zaman, M. (2021). Climate change mitigation: Carbon assurance and reporting integrity. Business Strategy and the Environment, 30(8). https://doi.org/10.1002/bse.2843

Cho, S., Lee, K., Cheong, A., No, W. G., & Vasarhelyi, M. A. (2021). Chain of Values: Examining the Economic Impacts of Blockchain on the Value-Added Tax System. Journal of Management Information Systems, 38(2). https://doi.org/10.1080/07421222.2021.1912912

Elaigwu, M., Abdulmalik, S. O., & Talab, H. R. (2024). Corporate integrity, external assurance and sustainability reporting quality: evidence from the Malaysian public listed companies. Asia-Pacific Journal of Business Administration, 16(2). https://doi.org/10.1108/APJBA-07-2021-0307

Freeman, R. E. (1984). Strategic management: A stokcholder approach. Pitman Boston, MA.

Hoor, Z., Nassirzadeh, F., Askarany, D., & Shandiz, M. T. (2025). Navigating the web of corporate dealings: related-party transactions, earnings management, and audit committee oversight. Business Economics, 60(2). https://doi.org/10.1057/s11369-025-00393-7

Kassem, R. (2024). External auditors’ use and perceptions of fraud factors in assessing fraudulent financial reporting risk (FFRR): Implications for audit policy and practice. Security Journal, 37(3). https://doi.org/10.1057/s41284-023-00399-w

Khaireddine, H., Lacombe, I., & Jarboui, A. (2024). The trilogy in sustainability of environmental performance, assurance quality and firm value. Sustainability Accounting, Management and Policy Journal, 15(2). https://doi.org/10.1108/SAMPJ-07-2022-0352

Khuong, N. V., Tai, V. T. T., & Anh, L. H. T. (2025). The Mediating Role of Financial Reporting Quality in the Relationship Between CEO Power and Carbon Emission Disclosures: Evidence From Vietnamese Companies. Business Strategy and the Environment, 34(4). https://doi.org/10.1002/bse.4196

Lindahl, F., Kantola, S. P., & Schadewitz, H. (2024). Impact of country-specific business integrity and firm-specific ESG on earnings quality: evidence from EU civil law jurisdictions. Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-02-2024-0089

Lucuț Capraș, I., Achim, M. V., Rahat, B., & Nicolò, G. (2025). Sustainable auditing governance in a changing landscape: Cross-country evidence on the effect of traditional and innovative audit mechanisms on fraud risk. Journal of Innovation and Knowledge, 10(5). https://doi.org/10.1016/j.jik.2025.100798

Luu, H., Nguyen, L., & Wilson, J. O. S. (2021). Organizational Culture, Competition and Bank Loan Loss Provisions. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3921043

Mahieux, L., Sapra, H., & Zhang, G. (2023). CECL: Timely Loan Loss Provisioning and Bank Regulation. Journal of Accounting Research, 61(1). https://doi.org/10.1111/1475-679X.12463

Murgolo, M., Tettamanzi, P., & Minutiello, V. (2024). Accounting, ESG dynamics and the pandemic: when the quality of disclosure becomes crucial to sustainable success. Corporate Governance (Bingley), 24(3). https://doi.org/10.1108/CG-04-2023-0161

Nindito, M., Afianti, I., Koeswayo, P. S., & Tanzil, N. D. (2024). AGENCY EFFECTS: RELATED-PARTY TRANSACTIONS, CORPORATE GOVERNANCE, AND FINANCIAL STATEMENT FRAUD IN INDONESIA. Economic Horizons, 26(2). https://doi.org/10.5937/ekonhor2402117N

Ongsakul, V., Chatjuthamard, P., Jiraporn, P., & Lee, S. M. (2025). Climate change, ethical accounting, and the Paris agreement: does financial statement divergence influence shareholder value? Journal of Sustainable Finance and Investment, 15(4). https://doi.org/10.1080/20430795.2025.2526409

Page, M. J., McKenzie, J. E., Bossuyt, P. M., Boutron, I., Hoffmann, T. C., Mulrow, C. D., Shamseer, L., Tetzlaff, J. M., Akl, E. A., Brennan, S. E., Chou, R., Glanville, J., Grimshaw, J. M., Hróbjartsson, A., Lalu, M. M., Li, T., Loder, E. W., Mayo-Wilson, E., McDonald, S., … Moher, D. (2021). The PRISMA 2020 statement: An updated guideline for reporting systematic reviews. The BMJ, 372. https://doi.org/10.1136/bmj.n71

Panic, N., Leoncini, E., De Belvis, G., Ricciardi, W., & Boccia, S. (2013). Evaluation of the endorsement of the preferred reporting items for systematic reviews and meta-analysis (PRISMA) statement on the quality of published systematic review and meta-analyses. In PLoS ONE (Vol. 8, Number 12). https://doi.org/10.1371/journal.pone.0083138

Perera, N. S., Costa, M. D. P., Macreadie, P. I., & Wartman, M. (2025). Trends in Market-Based Blue Carbon Projects. Sustainable Development, 33(3). https://doi.org/10.1002/sd.3293

Poiriazi, E., Zournatzidou, G., Konteos, G., & Sariannidis, N. (2025). Analyzing the Interconnection Between Environmental, Social, and Governance (ESG) Criteria and Corporate Corruption: Revealing the Significant Impact of Greenwashing. Administrative Sciences, 15(3). https://doi.org/10.3390/admsci15030100

Qayoom, I., & Chisti, K. (2025). “Earnings transparency: a systematic review, integrated framework and future perspectives.” In Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-11-2024-0815

Wibowo, A. S., Istianah, I., Sari, N. P., Rakhman, F., & Septiari, D. (2025). Does organizational integrity matter in enhancing financial reporting quality? Empirical evidence from local governments in Indonesia. Journal of Accounting and Organizational Change. https://doi.org/10.1108/JAOC-09-2024-0321