Abstract
A crucial issue in financial economics pertains to enhancing the transparency of accounting and financial reporting within companies. This paper focuses on China, aiming to quantify the relationship between digital finance and financial accounting transparency from 1990 to 2021 using the autoregressive distributed lag bounds test. The results confirm that digital finance exerts a significant effect only in the long term; in the short term, it lacks the necessary efficacy to enhance financial transparency. The proliferation of information and communication technology (ICT) in China, in both the short and the long term, is a pivotal policy for augmenting accounting transparency. Moreover, an increase in both the short- and the long-term corporate income tax rate is poised to undermine the transparency of Chinese companies' financial statements. The foremost policy implications encompass the advancement of digital finance markets through cryptocurrencies, promotion of ICT diffusion policies, and enhancement of societal financial transparency literacy.
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