Integrating Artificial Intelligence and Management Accounting Effect on Trust in Iraqi Banks: A Mediating Role of Financial Reporting Quality

Abstract

Purpose This study aims to examine the impact of integrating artificial intelligence techniques with management accounting methods on the financial reporting quality in Iraqi government banks. It also examines the impact of the Financial reporting quality on stakeholder confidence, and tests the mediating role of financial reporting quality in the relationship between the integration of artificial intelligence and management accounting and stakeholder confidence. Design/Methodology/Approach A structured questionnaire was used to survey 100 employees working in banks such Accountants, bankers, and specialized academics regarding AI and managerial accounting practices, and reporting quality. Quantitative models using structural equation modeling (SEM) were employed to analyze the direct and indirect relationships between the variables. Results The results indicate that integrating AI technologies with management accounting does not necessarily lead to a direct increase in trust in banks. Rather, this is achieved through high-quality financial reporting, which acts as an intermediary between technological advancement and trust building. While banks strive to generate strong internal key performance indicators (KPIs) and functional accuracy, these should be disseminated clearly to gain the trust of customers and investors. Practical Implications The researchers’ findings, which focus on integrating artificial intelligence with management accounting, do not directly increase trust in banks. Rather, this effect is mediated by high-quality financial reporting. Therefore, it is essential for the studied government banks to focus on producing accurate and clear performance indicators and publishing them transparently to enhance their credibility and gain the trust of customers and investors. Originality/Value This study makes a pivotal contribution to academic literature and adds to the limited body of research on the integration of artificial intelligence, management accounting, financial reporting, and trust in banks.