FACTORS INFLUENCING THE ADOPTION OF DIGITAL ACCOUNTING IN MSMES IN THE ERA OF DIGITAL TRANSFORMATION

Abstract

The rapid advancement of digital technology has transformed the way Micro, Small, and Medium Enterprises (MSMEs) manage their accounting systems. This study aims to examine the factors influencing the adoption of digital accounting in MSMEs during the era of digital transformation. The research framework integrates the Technology Acceptance Model (TAM) and the Unified Theory of Acceptance and Use of Technology (UTAUT) to identify the effects of technological, organizational, environmental, individual, and economic/institutional factors on digital accounting adoption. Data were collected from 200 MSME owners and accounting practitioners through an online survey and analyzed using Structural Equation Modeling (SEM-PLS). The results show that all five factors significantly influence the adoption of digital accounting, with technological and organizational factors having the strongest effects. The R-square value of 0.672 indicates that the model explains 67.2% of the variance in digital accounting adoption, while the Q-square value of 0.672 demonstrates high predictive relevance. The findings suggest that technological readiness, managerial support, and digital literacy are critical drivers of successful digital accounting adoption in MSMEs. This study contributes to the literature on digital transformation in accounting by providing empirical evidence on the determinants of technology adoption among MSMEs and offers practical insights for policymakers, system developers, and educators to strengthen the digital ecosystem for small business sustainability.