<p>The abrupt and swift transition to online remote learning due to COVID-19 left numerous Indonesian universities in a state of disarray, owing to the challenge of adapting to remote teaching and learning with only some or minimal prior experience. This is because many universities in Indonesia are traditional institutions that typically conduct their learning activities in-person, on a physical campus. This study aims to empirically determine the effects of student engagement in online learning and digital literacy on operational accounting competencies. Additionally, it seeks to determine whether digital literacy could act as a moderating variable, enhancing or diminishing the impact of student engagement in online learning on operational accounting competencies for fifth and seventh-semester Accounting Sharia students at Universitas Islam Negeri (UIN) KH Abdurrahman Wahid Pekalongan, Indonesia. Guided by Situated Learning Theory, this research highlights the role of authentic, contextual learning environments in developing competencies. The study generates survey data using a pre-designed questionnaire completed by 113 students. Data are analyzed using descriptive analyses and PLS-SEM (Partial Least Square-Structural Equation Modelling). It can be concluded that digital literacy and student engagement have a significantly positive effect on operational accounting competencies. However, the results indicate that digital literacy does not strengthen or lessen the relationship between student engagement in online learning and operational accounting competencies. These findings underscore the importance of Situated Learning Theory in emphasizing practical experience, collaboration, and participation in real-world accounting activities, which are crucial components of effective learning in operational accounting.</p>