Latifa Mbelwa Licentiate of Philosophy (Lic) University of Dar es Salaam Business School (UDBS) The 10 th Operations Research Society of Eastern Africa (ORSEA 2014) International Conference Venue: University of Nairobi School of Business, Lower Kabete Campus, Nairobi October 16-18, Mobile:

 Introduction  Literature Review  Theoretical Framework and Hypotheses  Research Methodology  Findings  Conclusion and Recommendations

The main objective of this paper is to establish the dimensions of the factors which theoretically influence the use of accounting information in the public sector of developing country context; including eastern African Countries. The paper is motivated by the current move of New Public Management (NPM) in which change of accounting techniques is the main issue to achieve economic performance that including efficiency. The move of NPM is also found in Local Government Authorities (LGAs) of developing countries such as Nepalese, Ghana, Tanzania, Singapore and Bangladesh (Adhikari and Mellemvik, 2011; Uddin and Tsamenyi, 2005; Mkasiwa, 2011; Mzenzi, 2013; Sarker, 2006) The move of NPM is posited to be influenced more with external institutional pressures from development partners (Donor) that demand efficiency

 Conducting a study of this nature in public sector of developing countries is remarkable, primarily because the contexts of these nation-states have not been captured well, theoretically and empirically especially in Accounting (Broadbent & Guthrie, 2008; Hopper et al. 2009).  The weak point is more about the use of accounting information in the internal decision making processes such the budgetary processes with association of external institutional pressures (Mimba, 2011, Hopper et al, 2009).  Therefore, the evidence is required to inform reformers, practitioners, policy-makers and researchers... specific ways that may contribute to the proper use of accounting information in budgetary decision-making processes  Therefore, the interest of this study is to established the extent factors associated with external and internal institutional environment and contingency structures together with individual actors characteristics influencing the use of accounting information.

 The institutional theory in term of NIS (DiMaggio & Powell, 1983Modell, 2001; Collier, 2001) and OIE (Scapens, 2006)  Contingency theory and Contingency model of government accounting innovation by Luder (1992)  Decision usefulness concept (Staubus, 1960; Shipper & Vincent 2003)  Use of Accounting Information (Diamantopoulos & Souchon, 1999; Vyas & Souchon, 2003; Amara, Ouimet, & Landry, 2004)  Symbolic use of accounting information (political decision approach)  instrumental, and conceptual use of accounting information (rational approach)

External Institutional Related Factors Individual actors’ Characteristics related Factors Organizations' Internal Institutional and Contingency Factors Organizations' Internal Institutional and Contingency Factors Instrumental- Conceptual Use of Accounting Information Line of influence A Tentative study model Symbolic Use of Accounting Information H2 H1 H3 H4 H5 H6 H7 H8 H9 Operationalisation of the constructs: Latent Variables.doc

 H1: The external organisational Institutional factors (EXIF) are positively related to the organisation’s internal and contingency factors (IOF)   H2: The external organisational Institutional factors (EXIF) are positively related to individual actors’ characteristics related factors (INDIFACT)   H3: The organisation’s internal and contingency factors (IOF) are positively related to individual actors’ characteristics related factors (INDIFACT)  H4: The organisation’s internal institutional and contingency factors (IOF) are positively related to Instrumental- conceptual use of accounting information (INSUSE)   H5: The individual actors’ characteristics related factors (INDIFACT) are positively related to Instrumental-conceptual use of accounting information (INSUSE)   H6: The external organisational Institutional factors (EXIF) are positively indirectly related to Instrumental-conceptual use of accounting information (INSUSE)  H7; The organisation’s internal institutional and contingency factors (IOF) are positively related to symbolic use of accounting information ((SYMB)   H8: The individual actors’ characteristics related factors (INDIFACT) are positively related to symbolic use of accounting information use of accounting information ((SYMB)   H9: The external organisational Institutional factors (EXIF) are positively related to symbolic use of accounting information (SYMB) 

 Positivism Paradigm: Objectivity  Survey strategy  Data collection methods  The study surveyed 34 out of 134 LGAs in which 208 questionnaires were administered to the 131 LGAs’ officials and 108 councillors.  Data Analysis  SEM was used (Amos Software, version 20)  Model Fit Indices  Reliability (Assessment by Cronbach's Alpha Value of 0.7 and above indicates  Construct Validity Latent Variables.docLatent Variables.doc  Convergent Validity (Average Variance Extracted (AVE) of 0.5 or above)  Discriminant Validity ( Comparison between AVE of any two constructs with the square of the correlation the two constructs) AVE>square of the correlation

Chi-Square = , Degrees of freedom of 368, p = ModelRMSEA 0.08 fair fit CMIN/DF <2 GFI 0.9 AGFI 0.8 CFI 0.9 NFI 0.9 IFI 0.9 RMR 0.08 Default Saturated Independence H8; Indirect relationship of EXTF----SYMB H7: Indirect relationship of EXTF-----INUSE

 Findings of this study, comprehend the role of institutionalized social and legal rule with professionalism in shaping actors to use accounting information  Generally, the study’s findings lead to conclusion; instrumental and conceptual use of accounting information in budgetary decision making processes public sector organisation such as LGAs; is more influenced by deterministic related factors which are deduced by institutional and contingency environment than voluntarism related factors.  Symbolic use of accounting information in budgetary decision making processes with intuition is needed to be informed by voluntarism factors and decreased by deterministic related factors

The model of Factors Influencing the Use of Accounting Information in Budgetary Decision Making

 In general, it informs various stakeholders such as  Reformers and Reforms Program (Local Government reform program; Decentralisation Policy; adoption of accrual basis accounting)  Practitioners- NBAA,  Development Partner, funders such Donor through CG  LGAs and actors  Political Parties  Researchers

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