Factors Affecting Effective Adoption of Accrual-Based International Public Sector Accounting Standards (IPSAS) in Zanzibar: The Mediating Role of Perceived Usefulness

Abstract

This study examines the influencing variables in the successful adoption of accrual-based International Public Sector Accounting Standards (IPSAS) in the Zanzibar government. The research approach was a quantitative research design, where a questionnaire was used to gather primary data in a sample of 392 respondents including 217 Accountants and 175 Auditors. Closed-ended questionnaires were used to collect the primary data. Analysis using Partial Least Squares-Structural Equation Modelling (PLS-SEM, SmartPLS4) revealed that there is a statistical significant positive relationship between coercive pressures, perceived usefulness and organization culture on the effective adoption of accrual IPSAS. However, it was found that adoption and implementation cost negatively affect the effective adoption of accrual IPSAS.The results also revealed that perceived usefulness mediates partially the relationship between organization culture and accrual IPSAS adoption. These findings align with Institutional Theory, Resource-based Theory, and Organization Culture Theory, and extend the Technology Acceptance Model to the public sector context. The authors recommend that along with the financial incentive and the pressure of regulation, the policymakers, including the Ministry of Finance, should focus on the capacity building of awareness and the endeavors to promote the cultural transformation to encourage the successful adoption of IPSAS. Keywords: Accrual IPSAS Adoption, Coercive Pressures, Implementation Cost, Organisation Culture, Perceived Usefulness