Latifa MbelwaLicentiate of Philosophy (Lic)

University of Dar es Salaam Business School (UDBS)

The 10th Operations Research Society of Eastern Africa (ORSEA 2014) International Conference

Venue: University of Nairobi School of Business, Lower Kabete Campus, Nairobi

October 16-18, 2014

Email: latifambelwa@yahoo.com/mbelwa@udbs.udsm.ac.tz Mobile: +255 713 78 81 61

IntroductionLiterature Review Theoretical Framework and HypothesesResearch MethodologyFindingsConclusion and Recommendations

• The main objective of this paper is to establish the dimensions of the factors which theoretically influence the use of accounting information in the public sector of developing country context; including eastern African Countries .

• The paper is motivated by the current move of New Public Management (NPM) in which change of accounting techniques is the main issue to achieve economic performance that including efficiency.

• The move of NPM is also found in Local Government Authorities (LGAs) of developing countries such as Nepalese, Ghana, Tanzania, Singapore and Bangladesh (Adhikari and Mellemvik, 2011; Uddin and Tsamenyi, 2005; Mkasiwa, 2011; Mzenzi, 2013; Sarker, 2006)

• The move of NPM is posited to be influenced more with external institutional pressures from development partners (Donor) that demand efficiency

Conducting a study of this nature in public sector of developing countries is remarkable, primarily because the contexts of these nation-states have not been captured well, theoretically and empirically especially in Accounting (Broadbent & Guthrie, 2008; Hopper et al. 2009).

The weak point is more about the use of accounting information in the internal decision making processes such the budgetary processes with association of external institutional pressures (Mimba, 2011, Hopper et al, 2009).

Therefore, the evidence is required to inform reformers, practitioners, policy-makers and researchers... specific ways that may contribute to the proper use of accounting information in budgetary decision-making processes

Therefore, the interest of this study is to established the extent factors associated with external and internal institutional environment and contingency structures together with individual actors characteristics influencing the use of accounting information.

The institutional theory in term of NIS (DiMaggio & Powell, 1983Modell, 2001; Collier,

2001) and OIE (Scapens, 2006)

Contingency theory and Contingency model of government accounting innovation by Luder (1992)

Decision usefulness concept (Staubus, 1960; Shipper & Vincent 2003)

Use of Accounting Information (Diamantopoulos & Souchon, 1999; Vyas & Souchon, 2003; Amara, Ouimet, & Landry, 2004) Symbolic use of accounting information (political decision approach) instrumental, and conceptual use of accounting information (rational approach)

External Institutiona

l Related Factors

External Institutiona

l Related Factors

Individual actors’ Characteristics related Factors

Individual actors’ Characteristics related Factors

Organizations' Internal Institutional

and Contingency Factors

Organizations' Internal Institutional

and Contingency Factors

Instrumental-Conceptual

Use of Accounting Information

Instrumental-Conceptual

Use of Accounting Information

Line of influence

A Tentative study model

Symbolic Use of Accounting Information

Symbolic Use of Accounting Information

H2

H1

H3

H4

H5

H6

H7

H8

H9

Operationalisation of the constructs: Latent Variables.doc

H1: The external organisational Institutional factors (EXIF) are positively related to the organisation’s internal and contingency factors (IOF)

  H2: The external organisational Institutional factors (EXIF) are positively related to individual actors’

characteristics related factors (INDIFACT)   H3: The organisation’s internal and contingency factors (IOF) are positively related to individual actors’

characteristics related factors (INDIFACT)

 H4: The organisation’s internal institutional and contingency factors (IOF) are positively related to Instrumental-conceptual use of accounting information (INSUSE)

  H5: The individual actors’ characteristics related factors (INDIFACT) are positively related to Instrumental-

conceptual use of accounting information (INSUSE)   H6: The external organisational Institutional factors (EXIF) are positively indirectly related to Instrumental-

conceptual use of accounting information (INSUSE) H7; The organisation’s internal institutional and contingency factors (IOF) are positively related to symbolic use

of accounting information ((SYMB)   H8: The individual actors’ characteristics related factors (INDIFACT) are positively related to symbolic use of

accounting information use of accounting information ((SYMB)   H9: The external organisational Institutional factors (EXIF) are positively related to symbolic use of accounting

information (SYMB)

 

Positivism Paradigm: ObjectivitySurvey strategy Data collection methods

The study surveyed 34 out of 134 LGAs in which 208 questionnaires were administered to the 131 LGAs’ officials and 108 councillors.

Data Analysis SEM was used (Amos Software, version 20)

Model Fit Indices

Reliability (Assessment by Cronbach's Alpha Value of 0.7 and above indicates

Construct Validity Latent Variables.docConvergent Validity (Average Variance Extracted (AVE) of 0.5 or above)Discriminant Validity (Comparison between AVE of any two constructs with the square of the

correlation the two constructs) AVE>square of the correlation

Chi-Square = 733.036, Degrees of freedom of 368, p = 0.000

Model RMSEA0.08 fair fit

CMIN/DF<2

GFI0.9

AGFI0.8

CFI0.9

NFI0.9

IFI0.9

RMR0.08

Default .069 1.973 .900 .808 .900 .800 .900 .054

Saturated 1.000 1.000 1.000 1.000 1.000 0.00

Independence .195 8.448 .321 .259 .000 2.216 .698 .199

H8; Indirect relationship of EXTF----SYMB+0.25

H7: Indirect relationship of EXTF-----INUSE--+ 0.34

Findings of this study, comprehend the role of institutionalized social and legal rule with professionalism in shaping actors to use accounting information

Generally, the study’s findings lead to conclusion; instrumental and conceptual use of accounting information in budgetary decision making processes public sector organisation such as LGAs; is more influenced by deterministic related factors which are deduced by institutional and contingency environment than voluntarism related factors.

Symbolic use of accounting information in budgetary decision making processes with intuition is needed to be informed by voluntarism factors and decreased by deterministic related factors

The model of Factors Influencing the Use of Accounting Information in Budgetary Decision Making

In general, it informs various stakeholders such as

Reformers and Reforms Program (Local Government reform program; Decentralisation Policy; adoption of accrual basis accounting)

Practitioners- NBAA,Development Partner, funders such Donor through CG

LGAs and actors Political PartiesResearchers

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