Previous　studies　have　provided　mixed　evidence　regarding　the　impact　of　digital　transformation　on　firm　behavior.　Using　data　from　Chinese　listed　firms,　we　find　that　digital　transformation　increases　the　likelihood　of　corporate　fraud　by　raising　business　complexity,　financing　constraints,　and　oversight　challenges,　highlighting　the　associated　risk　impacts.　However,　strong　internal　controls,　analyst　coverage,　and　auditor　professional　competence　can　mitigate　this　risk.　Notably,　stateowned　and　high-income　firms　do　not　experience　these　risk　impacts.　Our　findings　underscore　the　potential　risks　posed　by　digital　transformation,　clarify　the　theoretical　relationship　between　digital　transformation　and　fraud,　and　offer　practical　insights　for　informing　government　policy　improvements.