Abstract
This study investigates the joint influence of corporate governance practices, internal audit quality, and Artificial Intelligence (AI) adoption on sustainable financial reporting quality in Indian commercial banks. While prior research has predominantly examined governance mechanisms in isolation, limited empirical attention has been given to their complementary interaction within digitally enabled sustainability oriented reporting environments. Drawing on Agency Theory and the governance complementarity perspective, this study conceptualizes AI as a strategic monitoring and assurance tool that enhances transparency, strengthens internal controls, and improves reporting reliability. A quantitative research design was employed using survey data collected from licensed commercial banks operating in India. Hierarchical regression analysis was conducted to examine both direct and interaction effects, with bank size and bank age included as control variables. The results indicate that internal audit quality (r = 0.664, p < 0.01) and corporate governance practices (r = 0.598, p < 0.01) are positively associated with sustainable financial reporting quality. AI adoption also demonstrates a significant positive influence by enabling automated anomaly detection, predictive analytics, and real-time compliance monitoring, thereby improving data integrity and financial transparency. Furthermore, the interaction between internal audit quality and corporate governance remains positive and significant (β = 0.362, p < 0.05), with AI strengthening this complementary relationship. The study contributes to governance literature by demonstrating that sustainable financial reporting quality in commercial banks emerges from synergistic governance mechanisms supported by AI-enabled monitoring capabilities.
