Artificial intelligence adoption and ethical governance in sustainable financial decision making among listed firms in the Gulf Cooperation Council

This study advances the intelligent-accounting literature by examining how AI-based tools embedded in accounting systems shape sustainable financial decision-making in Gulf Cooperation Council (GCC) listed firms. Using a panel of 52 listed firms across the six GCC states over 2015–2024, the study apply the two-step system generalized method of moments (system GMM) to address dynamic persistence and endogeneity. Sustainable financial decision-making (SFD-M), proxied by ESG performance, is dynamic and path dependent: the lagged dependent variable is positive and significant across specifications. AI tools adoption (AI-TA) has a positive effect on SFD-M that is marginally significant, offering suggestive rather than conclusive evidence that AI-enabled accounting systems support more sustainability-oriented decisions. The digitalization index (DI) is insignificant in baseline models, indicating that digital infrastructure alone does not improve sustainability outcomes without complementary capabilities. Mechanism tests provide only weak evidence that AI-TA and DI raise accounting intelligence (AC-INT) or data quality (DQ), proxied by earnings quality; the estimated technology–mechanism links are positive in sign for AI-TA but statistically insignificant. In the full dynamic model neither DQ nor AC-INT is a significant direct driver of SFD-M, and bootstrapped indirect effects through both mechanisms are statistically indistinguishable from zero, so the data do not support the proposed mediation. Moderation analysis shows that ethical governance (EG) significantly strengthens the sustainability payoff of accounting intelligence and data quality: the AC-INT×EG and DQ×EG interactions are positive and significant even though the corresponding main effects are not. By integrating direct, mediated, and moderated pathways within a dynamic panel, the study offers theory-based and practical guidance for AI-driven sustainable finance in emerging markets.