Digitalisation of activities, results and innovative-oriented culture and Tanzanian local government authorities’ financial reporting quality

Abstract

Being motivated by the role of public sector financial reporting quality in developing countries, this study examines the relationship between the digitalisation of activities, results-oriented culture, innovative-oriented culture, and financial reporting quality in Tanzanian local government authorities (LGAs). Employing institutional and organisational learning theories and a quantitative approach, data collected from 225 accountants and internal auditors representing 126 LGAs were analysed using partial least squares structural equation modelling (PLS-SEM). The findings demonstrate that financial reporting quality is significantly enhanced by an innovative-oriented culture, a results-oriented culture, and not the digitalisation of LGAs’ activities. This study provides empirical evidence on the substantial considerations of results-oriented culture and innovative-oriented culture in improving financial reporting quality in LGAs. Furthermore, this study offers theoretical and practical implications for LGAs’ decision-makers and management teams.