Impact of ERP-Enabled Digital Transformation on Cost Accounting Practices in Saudi Firms

Abstract

Enterprise Resource Planning (ERP) systems are major instruments of organizational digital transformation as they integrate operational and financial processes and uplift the overall performance. This research focuses on the effect of ERP implementation on cost accounting activities in Saudi firms, the mediating roles of process integra-tion and automation being the primary emphasis. Information was obtained from 60 companies with a total of 290 employees from the manufacturing, construction, retail, energy, and service sectors. Reliability and validity were established through Cronbachs alpha, composite reliability, and average variance extracted. For data analysis, multiple regression, independent t, tests, and Partial Least Squares Structural Equation Modeling were utilized. Findings suggest that the adoption of ERP leads to a significant improve-ment in cost accuracy, cost control effectiveness, variance analysis quality, and managerial decision, making. In addition, process integration and automation partially mediate these relationships, thus advocating the strategic ERP adoption aligned with Saudi Vision 2030 goals.