ADOPTION OF CLOUD ACCOUNTING IN PAKISTAN: DRIVERS, BARRIERS & IMPLICATIONS FOR BUSINESSES

Abstract

This study examines the adoption of cloud accounting in Pakistan, focusing on its drivers, barriers, and consequences for small and medium-sized enterprises. Digitalization of business processes has accelerated the popularity of cloud accounting, but the adoption by the small and medium-sized enterprises (SMEs) in Pakistan is not even because of technological and organizational factors. This paper seeks to discuss the drivers, barriers and performance implications of cloud accounting adoption in Pakistan within the context of Technology-Organization-Environment framework. Quantitative research design was used, which involved the gathering of survey data by the use of the structured questionnaire to the SME owners and managers, and networking the relationship between the technological, organizational, and environmental determinants by use of the Partial Least Squares Structural Equation Modelling. The results show that perceived relative advantage and digital vision are the highest predictors of the adoption of cloud accounting, and data security issues, digital illiteracy, and poor infrastructure are significant barriers to implementation. Despite the positive prospects that adoption offers to the operation efficiency and organizational performance, not all firms are willing to adopt because of the perception of risks and inadequate technical capability. The paper finds that enhancing managerial awareness, developing technological infrastructure, and developing digital competencies are critical to overcoming the barriers to adoption and enhancing the rate of the digital transformation of the accounting practice by SMEs in Pakistan, which, in turn, facilitates the long-term competitiveness of the business performance and its sustainability.