Factors determining the adoption of computerised accounting information systems and their effect on tax compliance costs: the case of SMEs in Saudi Arabia
Creators: name: ALMGRASHI, Ahmed
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350105
subject: Management accounting

description: A computerised accounting information system (CAIS) is a paradigm enabling small and medium-sized enterprises (SMEs) to carry out their financial operations formerly done manually. It can provide numerous SME-relevant benefits, including speedy and accurate information transmission and verification. In emerging market economies such as Saudi Arabia, however, CAISs still remain infrequently used or accepted by SMEs. Getting them to adopt CAIS necessitates understanding why some enterprises are willing to do so, whereas others are not. Another issue for consideration are the costs incurred by SMEs when they comply with the country's tax laws. This research explores the potential determinants of Saudi SMEs' decisions regarding CAIS adoption and its effects on tax compliance costs. To this end, a model was developed to integrate the determinants drawn from the literature on CAIS adoption and other factors that have not been investigated by researchers as leading aspects that may influence SMEs embracing CAIS. In particular, the examination focused on the roles of electronic government and tax compliance issues in CAIS adoption.

This research's objective is to determine the factors leading to the adoption of CAIS in Saudi Arabia from the perspective of SMEs and what this means for tax compliance costs. Specifically, the research aims to: (a) to identify and review the factors which might influence CAIS adoption by SMEs; (b) to test the factors identified that affect SMEs in Saudi Arabia; (c) to describe how CAIS adoption affect tax compliance costs; (d) to explore perceptions of CAIS providers and small accounting firms' managers regarding CAIS adoption and tax compliance costs in the Saudi SMEs sector; and (e) to provide suggestions and recommendations based on the findings for how CAIS. The perceptions of CAIS adoption in the Saudi SMEs sector are tested using the technology-organisation-environment framework as well as diffusion of innovation and institutional theories. Ascertained here are twelve factors deemed to be significant for CAIS acceptance: relative advantage, compatibility, complexity, organisational readiness, human resources, IT competence, manager-owner support, mimetic pressure, coercive pressure, normative pressure, e-government compliance, tax compliance, and government support.

A thorough analysis of the relevant literature has been carried out to establish a methodological model in order to investigate the critical factors of CAIS adoption and the tax compliance implications. This conceptual model was then evaluated and validated using data retrieved from participants in Saudi Arabia by introducing qualitative and quantitative results (parallel mixed methods approach). The decision to apply a mixed methods strategy was inspired by the recent call for it to be more widely applied, as it has not yet been widely done for CAIS adoption studies. Two separate research designs using Convergent Parallel Design have been combined. The quantitative part of the research tested and validated the data through structural equation modelling (SEM) with Mplus software (version 8.4), while the qualitative aspect analysed the data through thematic analysis utilising NVivo software (version 12).

An online survey was conducted among 505 SMEs in Saudi Arabia, and interviews were carried out with 17 experts. The results revealed that relative advantage, compatibility, human resources, IT competence, coercive pressure, normative pressure, e-government compliance, tax compliance, and government support have positive effects on SMEs' desicion to adopt CAIS and that complexity produces a significant negative outcome. The study also clarifies CAIS adoption increases internal tax compliance expenses and diminishes external tax compliance costs. Outcomes confirmed that the proposed framework fitted well to the gathered data. Subsequently, the model can explain the adoption of CAISs by SMEs at the organisational level in Saudi Arabia.
This work contributes to the literature through the proposed integrated model, which links the effects of electronic government compliance and tax compliance with other factors to CAIS adoption. It also reveals the connection between tax compliance costs and CAIS adoption. The thesis will provide great value in terms of guidelines to relevant organisations, CAIS providers, SMEs' managers and/or owners, government policy-makers and agencies on how to advance the acceptance of CAIS throughout Saudi Arabia.