This study aims to investigate how digital transformation (DT) impacts sustainability reporting (SR) by using audit quality (AQ) as a mediating factor in Palestinian stock exchange listed companies (PEX).
This research examined 43 companies from PEX through their audited financial reports spanning from 2014 to 2023. Data analysis was performed in STATA, beginning with multiple OLS regressions followed by generalized method of moments (GMM) analysis for main estimation. The GMM functioned as the main estimation technique because it addressed endogeneity issues and unobserved variables to produce superior results for dynamic panel data analyses.
This research demonstrates that DT alongside AQ improvement leads to better SR and DT enhances AQ which creates a partial link to SR.
This study examines Palestinian listed companies through their financial reports using secondary cross-sectional data but this method restricts findings to numerical data while omitting non-quantifiable elements; future studies need to use longitudinal and qualitative approaches to study additional elements affecting reporting practices. The research results maintain their value for Palestine because ongoing political instability together with inadequate institutional strength and insufficient funding resources block the development of digital technology. The research shows Palestinian organizations need enhanced regulatory support and digital infrastructure deployment and audit quality improvement to achieve better transparency and build stakeholder trust and enhance their SR standards. The research demonstrates that managers and policymakers require knowledge about how monitoring systems with oversight mechanisms and technological progress enhance SR results in developing countries.
This research creates fresh knowledge about DT impacts on SR and AQ for Palestinian listed companies operating in their developing market with its political and institutional obstacles. The research shows how digital tools and oversight systems enhance transparency, accountability and legitimacy while offering operational direction to managers and auditors and policymakers. The research creates an Islamic-based ethical reporting framework through its connection between amanah (trust) and responsible stewardship principles.
