The Strategic Importance of Intellectual Capital and Cloud Accounting: The Interactive Role in Enhancing the Financial Performance
By Mohammad Ghabayen
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This study investigated the impact of cloud accounting on financial performance, specifically examining the moderating role of intellectual capital. The research was conducted on a sample of 42 Jordanian industrial companies listed on the Amman Stock Exchange. Data was collected from financial managers, heads of accounting departments, and accountants using a specially designed questionnaire. A total of 164 questionnaires were distributed. The Partial Least Squares Structural Equation Modeling (PLS-SEM) method, using SmartPLS software, was employed for data analysis and hypothesis testing. The findings revealed a significant impact of cloud accounting on the financial performance of Jordanian industrial companies. Furthermore, the study identified a significant moderating role for intellectual capital (both as a comprehensive concept and through its components) in the relationship between cloud accounting use and financial performance. Specifically, both human capital and structural capital were found to play a positive and statistically significant moderating role, indicating that higher levels of these two components enhance and strengthen the positive impact of cloud accounting on financial performance. In contrast, relational capital did not demonstrate a moderating role in this relationship. The unexpected complexity regarding relational capital suggests a need for careful management of the interaction between technology and external relationships. The study recommends an integrated approach that emphasizes developing intellectual capital (especially human and structural) in conjunction with investments in cloud accounting.
Artificial Intelligence in Auditing: Transforming Processes for Enhanced Effectiveness
By Ahmad Hardan, Mohammad Ghabayen
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The digital transformation, driven by exponentially increasing data and complex business operations, necessitates a paradigm shift in the auditing profession. This qualitative study explores how the integration of Artificial Intelligence (AI) systems enhances the effectiveness of the auditing process. Through semi-structured interviews with nine auditors in Saudi Arabia, the research investigates AI's role across pre-planning, planning, execution, and reporting stages. Findings reveal that AI significantly improves audit accuracy, speed, and efficiency by automating repetitive tasks, enabling full-population data analysis, and facilitating continuous auditing. While cost, skill intensity, and potential algorithmic bias are challenges, the benefits, including enhanced professional judgment and compliance with standards, are seen to outweigh the drawbacks. The study proposes a modified research model emphasizing auditor competence and skepticism as crucial factors for maximizing AI's positive impact on audit effectiveness. This work contributes to the nascent literature on AI in auditing and offers practical insights for auditors and corporate governance.
The Moderating Role of Institutional Pressures: Adoption of Emerging Technologies in Audit Firms under a Regulated Environment
By Mahmoud jaradat
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This study examines the determinants of emerging technology adoption (e.g., AI, blockchain, RPA, data analytics) in audit firms operating within a regulated environment, drawing on the Technology-Organization-Environment (TOE) framework. It analyzes the direct effects of technological competence, organizational absorptive capacity, and institutional pressures, and investigates the moderating role of the environmental context on these relationships. A quantitative survey design was employed, collecting data from 114 audit professionals. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM), with measurement models ensuring reliability and validity and a structural model testing the hypotheses. The results validate the TOE framework, showing that organizational context (absorptive capacity) is the strongest predictor of adoption (β = 0.79, p < 0.001) followed by technological context (β = 0.67, p < 0.001) and environmental pressures (β = 0.34, p < 0.05). Crucially, normative pressure was found to be a significant positive moderator, while coercive and mimetic pressures were not. The study confirms that successful adoption in auditing hinges not just on technology but primarily on organizational learning capabilities and is significantly influenced by professional and regulatory norms. It offers practical insights for firms to prioritize capability building and for regulators to shape effective normative guidance, contributing to theory by integrating institutional and absorptive capacity perspectives into the TOE framework.
Artificial Intelligence in Corporate Governance: Opportunities, Risks, and Regulatory Pathways in the European Union
By Zaid Jaradat
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This study investigates the transformative role of artificial intelligence (AI) in corporate governance within the European Union (EU), focusing on its opportunities, risks, and regulatory implications. It examines how AI adoption influences governance effectiveness, regulatory compliance, environmental, social, and governance (ESG) reporting, and stakeholder trust. A convergent mixed-methods design was employed, combining survey data from EU-listed firms (n =250) with semi-structured interviews (n = 20–25) involving regulators, auditors, and board members. Quantitative analysis used structural equation modeling (PLS-SEM) to test hypothesized relationships, while qualitative thematic analysis captured perceptions of AI governance. Comparative case studies of Siemens, Unilever, ING, and BBVA further contextualized best practices. Results indicate that AI adoption significantly enhances governance effectiveness, compliance, and ESG reporting quality, while fostering stakeholder trust when accompanied by transparency and human oversight. However, algorithmic opacity and bias weaken trust and highlight the need for board-level AI literacy. Cross-industry and cross-company comparisons reveal that strong governance mechanisms such as AI oversight committees, independent audits, and public AI inventories are crucial for responsible implementation. This study contributes to theory by extending Agency, Stakeholder, and Algorithmic Governance perspectives to AI-enabled corporate oversight. It advances practice by identifying actionable governance mechanisms for boards and auditors. It informs regulation by aligning AI adoption with the EU AI Act, GDPR, DORA, and sustainability frameworks such as CSRD and ESRS. The findings underscore the importance of balancing innovation with accountability, positioning the EU as a global leader in responsible AI governance. Future research should explore cross-regional comparisons, explainable AI frameworks, and longitudinal impacts on governance and stakeholder trust.
Green Innovation and the Sustainability of Banks in Europe
By Ali Alababneh
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The transition toward a low-carbon economy has placed unprecedented pressure on financial institutions to adopt environmentally responsible strategies. Within the European Union (EU), banks are increasingly called upon to integrate green innovation (GI) into their operations and financing activities as part of broader efforts to achieve the goals of the EU Green Deal, Corporate Sustainability Reporting Directive (CSRD), and Sustainable Finance Disclosure Regulation (SFDR). This study investigates the impact of GI on the sustainability performance of European banks across three dimensions: environmental, financial, and social. Grounded in the Resource-Based View, Stakeholder Theory, and Institutional Theory, the research employs a quantitative, cross-sectional survey of European banks supplemented by secondary ESG data. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the findings demonstrate that GI positively influences all three dimensions of sustainability, with particularly strong effects on environmental and social outcomes. Moreover, the analysis reveals that regulatory pressure and transparency in ESG disclosure significantly moderate these relationships, albeit with regional variation: regulatory pressure exerts greater influence in Southern Europe, while disclosure quality enhances impacts more strongly in Northern Europe. The study contributes theoretically by extending existing governance and sustainability frameworks, practically by offering actionable guidance to banks seeking to align competitiveness with sustainability, and politically by informing policymakers on the need for harmonized standards, supervisory capacity, and incentives to encourage GI adoption. Limitations and future research directions are discussed, including the need for longitudinal and cross-regional studies, as well as investigations into emerging technologies such as AI in sustainability reporting.
Public-Sector Governance Reform in Saudi Arabia (2020–2025): Legal Modernization, Digital Innovation, and Accountability Outcomes
By Suliman Al-Sadan
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This study investigates the transformation of public-sector governance in Saudi Arabia between 2020 and 2025 through a mixed-methods approach that combines quantitative performance indicators with qualitative legal and institutional analysis. Quantitative data from the World Bank’s Worldwide Governance Indicators (WGI) and Transparency International’s Corruption Perceptions Index (CPI) reveal continuous improvement in key governance dimensions—Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. Between 2017 and 2022, WGI percentiles for Government Effectiveness and Regulatory Quality increased by nearly 10–12 points, while Saudi Arabia’s CPI score rose to 59 in 2024, ranking 38 of 180 countries. Complementary qualitative analysis of the Basic Law (A/90), Government Tenders & Procurement Law (2019), and Anti-Bribery Law (2021) demonstrates that legal modernization, digital transformation, and anti-corruption enforcement are mutually reinforcing. The establishment of Nazaha, Adaa, and the Digital Government Authority (DGA) operationalizes reform through performance measurement and interoperable digital platforms. Evidence from the OECD Digital Government Index (2025) supports the mediating role of digital governance, showing that proactive, data-driven systems enhance transparency and accountability. The integrated results confirm a Hybrid Governance Model in which rule-based legal reforms provide legitimacy, digital capacity mediates policy execution, and integrity institutions moderate compliance. Policy implications highlight the need for continuous legal updating aligned with global standards, expansion of digital interoperability, and institutionalization of preventive ethics. Overall, Saudi Arabia’s Vision 2030 reforms represent a coherent model for sustainable, data-driven public-sector excellence.