Implementation of Accrual Accounting in the Ghanaian Public Sector: The Moderating Role of Financial Resources Availability

Alexander Otopah
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Alexander Otopah: Eastern Regional Co-ordinating Council, Koforidua, Ghana

SBS Journal of Applied Business Research (SBS-JABR), 2023, vol. 11, 4-18

Abstract: Considering the rate of failures in developing economies where accrual accounting has been implemented, the study investigated the factors that could affect the implementation of accrual accounting in Ghana. Drawing on Institutional Theory and Luder’s contingency model for governmental accounting innovation, six hypotheses were postulated. The survey methodology was used with 499 finance officers from public sector institutions being sampled. Data were analyzed using the Explanatory Factor Analysis, Confirmatory Factor Analysis, and Structural Equation Model. The results show that instrumental-conceptual use and management support were found to have a significant positive relationship with the implementation of accrual accounting. Input-based competencies were found to have no relationship with the implementation of accrual accounting. The study also found that financial resource availability positively and significantly moderates the relationship between instrumental-conceptual uses, input-based competencies, management support, and implementation of accrual accounting. The findings of the study may imply that the implementation of accrual accounting in Ghana could be achieved if users of accounting information use it for decision-making, and management demonstrates readiness towards the change to accruals by providing significant budgetary allocation to support activities related to the transition to accruals.

Keywords: use of information; organizational capabilities; readiness towards change; financial resources availability; accrual accounting; instrumental use; conceptual use; input-based competencies; management support; personal valence (search for similar items in EconPapers)
Date: 2023
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