Artificial intelligence in accounting and sustainability performance: moderated-mediating model with IT capability and circular economy

Thuy Hong Thi Tran, Malik Abu Afifa, Tho Hoang Nguyen, Long Duc Huynh and Nha Minh Nguyen

Asian Review of Accounting, 2026, vol. 34, issue 4, 904-928

Abstract: PurposeDrawing on dynamic capabilities theory (DCT), this study investigates how firms leverage two specific internal capabilities—artificial intelligence in accounting (AIA) and information technology capability (ITC)—to enhance sustainability performance (SUP) within a circular economy (CE) framework. We conceptualize CE activities as a strategic reconfiguration mechanism and ITC as a critical supporting capability.Design/methodology/approachWe tested a moderated mediation model using partial least squares structural equation modeling (PLS-SEM) with observational data collected from 395 large firms listed on the Vietnamese stock market.FindingsThe results indicate that AIA positively influences SUP through the full mediation of CE activities, highlighting a key pathway through which digital capabilities translate into sustainability outcomes. Furthermore, ITC positively moderates the relationship between AIA and CE activities, demonstrating that the effectiveness of AIA in driving CE-oriented reconfiguration is substantially amplified when firms possess strong foundational IT capabilities.Practical implicationsManagers should prioritize developing a synergistic capability structure by integrating AIA deployment with robust ITC to strengthen CE strategies and improve SUP.Originality/valueThis study addresses a significant gap in the DCT literature by offering one of the first empirical investigations into how a specific digital capability (AIA) interacts with a foundational supporting capability (ITC) to shape an environmental strategy (CE reconfiguration) and subsequent performance in an emerging market context. It identifies the capability synergy (AIA × ITC) that enables successful digital-to-sustainability transformation, providing a foundational perspective on how AI can be leveraged to achieve competitive sustainable advantage.

Keywords: Artificial intelligence in accounting; Circular economy; Information technology capability; Sustainable performance; Dynamic capabilities theory; Vietnam (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-08-2025-0290

DOI: 10.1108/ARA-08-2025-0290

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