Digitization of Inputs and Comparability of Accounting Information: A U-Shaped Relationship

The integration of digital and physical domains accelerates the digitalization of enterprises, prompting a growing focus on digital inputs, which profoundly impacts the environment in which accounting information is generated. Thus, do digital inputs enhance or diminish the quality of accounting information? We propose a conceptual model based on strategic differentiation and internal control, finding that the impact of digital inputs on accounting information comparability follows a U-shaped trajectory of “suppression and enhancement,” rather than a linear relationship of “either-or.” Mechanism tests indicate that strategic differentiation and internal control quality are key channels through which digital inputs influence accounting information comparability. Additionally, external investors’ attention negatively moderates the U-shaped relationship between digital input and the comparability of accounting information. Further analysis reveals that the U-shaped relationship is more pronounced in state-owned enterprises, in the eastern region, with high levels of managerial myopia, and under high analyst scrutiny.