Evaluation of the influence of IFMIS adoption on financial reporting quality in the local government authorities in Tanzania

This study investigated the influence Integrated Financial Management System (IFMIS) adoption in financial reporting quality (FRQ) in the Local Government Authorities (LGAs) in Tanzania. It examined whether IFMIS adoption influenced the FRQ in the LGAs. Qualitative characteristics of financial reporting are the attributes that make financial information useful and consist of relevance, reliability and understandability. The study utilized the secondary data extracted from the Controller and Auditor General (CAG) general reports covering ten years starting from 2004 to 2014 covering 133 LGAs. Data collected was analyzed using descriptive statistics and a paired sample t-test in particular used the Statistical Package for Social Sciences (SPSS) software. The study found that, there was an increase in FRQ after IFMIS adoption in LGAs in the Tanzania. Relevance quality of the financial reports improved by 91%, reliability quality of the financial reports increased by 7% and understandability quality of the financial reports increased by 44%. The study considers that relevance quality contributes most to quality of financial reports of LGAs followed by understandability quality while reliability quality was found to contribute the least in the quality of financial reports. This study employed the theories of Reasoned Action (TRA); Theory of Planned Behavior (TPB); Technology Acceptance Model (TAM); and Diffusion of Innovation theory (DOI).The study recommends that in order to ensure that the LGA shave quality financial reports; they should invest on hardware and software which support IFMIS to improve the reliability, understandability and relevance of the financial reports in all LGAs.