Leveraging Digital Technologies for Quality Financial Reporting in Ghana’s Public Sector: Does Leadership Style Matter?

Abstract

The improvement in transparency, efficiency, and accountability in public sector financial management increasingly relies on advanced digital technologies. This paper explores the individual and collective implications of Artificial Intelligence (AI), Cloud Computing (CC), and Digital Payment Systems (DPS) on the quality of financial reporting in Ghana's public sector. It investigates the moderating role of leadership styles in these relationships, which has not been studied previously. Based on the Diffusion of Innovations Theory and the Institutional Theory, a quantitative survey was conducted with 344 accountants and finance officers from various ministries, departments, and agencies. The proposed relationships were tested using Structural Equation Modeling (SEM). Results show that AI, CC, and DPS significantly improve financial reporting quality; when used together, they have the most significant impact, highlighting the synergy of technological integration. One key contribution of this study is to empirically confirm that leadership styles—transformational, transactional, and participative—enhance the role of technological adoption in improving reporting quality, whereas autocratic leadership does not. This underscores the importance of leadership in digital accounting reforms and addresses a research gap, as leadership is a critical yet underexplored factor influencing financial reporting quality in developing economies. Theoretically, the study extends understanding of innovation diffusion models to public sector accounting and demonstrates how institutional pressures influence digital technology adoption. Practically, it emphasizes the need for leadership strategies to align with digital initiatives and institutional processes to enhance reporting quality.