The gap between need and ability to use accounting information in public sector financial reports

Abstract

This study focuses on predicting the needs, purposes, and usability of accounting information in general-purpose financial reports (GPFRs) to improve accounting theory significantly. Accounting reform in the public sector aims to provide reliable and valuable information to users. The study surveyed 374 public organizations using a survey questionnaire between March and June 2023. Collected data were tested for reliability using Cronbach's Alpha coefficient and regression analysis using SPSS 29 software. The research findings indicate that users of accounting information (AI) within an organization have a greater need for and a better understanding of the usefulness of AI compared to external users; users in the public sector tend to use AI more frequently for accountability purposes; and AI for decision-making plays a more significant role compared to AI for accountability in terms of enhancing organizational performance. The findings have important practical implications. Firstly, accountability should be prioritised when developing a GPFR framework for the public sector. Secondly, in order to increase the usability of the AI, it is important to improve the ability of external users to understand and use the information on GPFRs. Finally, the strength of the connection between internal and external information users determines the level of usability of accounting information.