The Influence of Financial Reporting Quality and Efficiency in Resources Utilization on Public Sector Financial Performance: Evidence from Tanzania

Mwanjaa Said Lyezia *

Department of Accounting and Finance, the Open University of Tanzania (OUT), Dar es Salaam, The United Republic of Tanzania (URT).

Asha Katamba

Department of Accounting and Finance, the Open University of Tanzania (OUT), Dar es Salaam, The United Republic of Tanzania (URT).

*Author to whom correspondence should be addressed.


Abstract

This study intended to examine the influence of financial reporting quality and efficiency in resource utilization on public sector financial performance as the results of adoption of accrual based IPSAS in Tanzania. Guided with Stakeholders Theory, a cross sectional-survey design was applied in collecting data from 178 public sector entities by applying a drop and pick method. PLS-SEM was employed in determining the relationship between financial reporting quality, efficiency in resource utilization and public sector financial performance. The findings revealed that, efficiency in resource utilization has a positive and significant influence on financial performance in the public sector entities. The relationship between financial reporting quality and public sector financial performance was not significant. These findings imply that efficiency in public resources utilisation plays a major role in achieving objectives of IPSAS adoption, hence leading to improved public sector financial performance.

Keywords: Financial reporting quality, efficiency in resource utilization, accrual based IPSAS, stakeholders theory, public sector financial performance, Tanzania


How to Cite

Lyezia , Mwanjaa Said, and Asha Katamba. 2024. “The Influence of Financial Reporting Quality and Efficiency in Resources Utilization on Public Sector Financial Performance: Evidence from Tanzania”. Asian Journal of Economics, Business and Accounting 24 (7):135-46. https://doi.org/10.9734/ajeba/2024/v24i71398.

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