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The case of
Factors influencing artificial public sector in
intelligence adoption in the Kuwait

accounting profession: the case of

public sector in Kuwait 3
Hasan Al Wael Received 19 September 2022
Revised 23 May 2023
Maastricht School of Management Kuwait, Kuwait, Kuwait 24 September 2023
Accepted 8 November 2023
Wael Abdallah
Box Hill Institute, Box Hill College Kuwait, Safat, Kuwait
Hasan Ghura
Kuwait College of Science and Technology, Safat, Kuwait, and
Amina Buallay
Brunel University, London, UK and Ahlia University, Manama, Bahrain

Abstract
Purpose – This study aims to investigate the organizational and individual factors that influence the
adoption of artificial intelligence (AI) in Kuwait’s public accounting sector.
Design/methodology/approach – The methodology of this study is a cross-sectional survey of 393
experienced accounting professionals, using partial least square structural equation modeling to analyze the data.
Findings – The findings show that organizational culture, regulatory support, perceived usefulness and
ease of use have a direct positive effect on AI adoption, while perceived usefulness and ease of use also have
an indirect positive effect through accounting profit and behavioral intention. However, the availability of
resources, effective communication channels and competition pressure have an insignificant impact on AI
adoption.
Originality/value – This study pioneers a structural framework to elucidate the perceived enhancement of
accounting quality through AI system integration. Further, this research adds to the literature on AI adoption
in accounting. This study also offers empirical evidence regarding how organizations in Kuwait’s public
accounting sector view AI systems in accounting.
Keywords Accounting profession, Artificial intelligence, Adopting technology, Kuwait public sector,
Public accountants
Paper type Research paper

1. Introduction
Artificial intelligence (AI) is a rapidly evolving technology that can potentially transform
various fields and sectors, including accounting (Ghura and Harraf, 2021). In this regard, AI

Competitiveness Review: An
Declaration of Conflicting Interests: The author(s) declared no potential conflicts of interest International Business Journal
Vol. 34 No. 1, 2024
concerning this article’s research, authorship and publication. pp. 3-27
Funding: The author(s) received no financial support for this article’s research, authorship and © Emerald Publishing Limited
1059-5422
publication. DOI 10.1108/CR-09-2022-0137
CR can be defined as “the capability of a machine to imitate intelligent human behavior”
34,1 (Aghion et al., 2017).
While there is an ongoing debate about whether AI will alleviate accountants’ duties and
improve accounting efficiency (Albawwat and Frijat, 2009), recent research suggests that AI
can enhance accountants’ productivity (Fast and Horvitz, 2017; Solaimani et al., 2020). For
example, AI can automate repetitive tasks, classify items, upload documents automatically,
4 provide more accurate information by processing the collected data and recommend the
track to find the best possible findings (Maione and Leoni, 2021). Moreover, AI can provide
value-added services to accounting clients, such as predictive analytics, risk assessment,
fraud detection and business insights (Seethamraju and Hecimovic, 2022). As a result, the
automation of accounting processes is fast becoming necessary for accounting firms that
want to remain competitive in the fast-paced business environment (Chukwuani and Egiyi,
2020).
However, adopting AI in accounting has challenges and barriers, especially in the public
sector, where specific organizational, environmental and regulatory factors may influence
the diffusion and acceptance of AI innovations. Accordingly, Agostino and Arnaboldi (2016)
found that the public sector is distinguished by a high level of complexity, diversity and
accountability, which may provide limitations and challenges when deploying AI systems
in accounting. In addition, public sector accounting is subject to various standards and
regulations that may affect the compatibility and compliance of AI tools with the existing
rules and norms (Bakarich and O’Brien, 2021). On the other hand, public sector accounting
involves stakeholders with different interests and expectations, which may affect the trust
and acceptance of AI systems among public sector accountants and their clients (Bracci and
Vagnoni, 2006).
This paper aims to examine the factors influencing AI adoption in the accounting
profession in the public sector context, focusing on the case of Kuwait. Kuwait is an
interesting case to study because it faces several obstacles and risks in diversifying its
economy and implementing Vision 2035. These include a heavy reliance on oil revenues, a
lack of private sector investment, an overreliance on foreign labor and bureaucratic
inefficiencies (Olver-Ellis, 2020). Moreover, the public sector plays a significant role in
Kuwait’s economy, with 76% of Kuwaiti nationals working in the public sector (Ghura et al.,
2021). Adopting AI can be particularly difficult because AI systems might replace many
automated tasks in the public sector, and Kuwaiti labor law mandates that national citizens
have the legal right to employment in the public sector (Olver-Ellis, 2020). Hence, this may
create opportunities and challenges for adopting AI in public-sector accounting (Alenezi
et al., 2017).
Using a developed framework and collated data from a survey questionnaire with public
sector accountants in Kuwait, this paper identifies the organizational and individual factors
that affect the adoption of AI tools in public-sector accounting. The developed model
explains how these two dimensions influence the adoption and diffusion of AI for the
accounting profession in public organizations (Lai, 2017). The paper also discusses the
implications of AI adoption for public sector accounting practice, quality and accountability.
Finally, the paper contributes to the literature on AI and accounting by providing an
empirical investigation of AI adoption in a specific public sector setting that has yet to be
widely studied.
This study is divided into different sections, with the first section being the introduction.
Section 2 discusses the literature review. Section 3 presents the research model, followed by
the research methodology. Section 5 presents the analysis and results. The final section
presents the study’s discussion, conclusions and future insights.
2. Literature review The case of
2.1 Artificial intelligence and accounting interaction public sector in
The convergence of AI and accounting is a challenging and potentially rewarding area of
research for social scientists, business owners and managers (Ghura and Harraf, 2021).
Kuwait
Furthermore, the link between AI and accounting has recently sparked an increased interest
(Nayak and Sahoo, 2021; Stancu and Dutescu, 2021). This is due to enhanced data
availability and increased usage of technologies such as AI. Therefore, considering the
recent events in the new global economy, it is increasingly difficult to overlook AI’s 5
contribution to the accounting industry’s progress (Mohmmad et al., 2020).
AI is changing the way professionals work globally. Like other industries, AI has a
significant impact on accounting and auditing. Aside from saving accountants time and
providing accurate information, AI-enabled systems help accountants stay competitive in
the market. It helps accountants and finance officers be more accurate and productive (Jin,
2022). These technologies can save time and money while providing critical decision-making
insights (Mancini, 2021). Moreover, firms generate significant revenue while lowering
operating costs (Alsheiabni et al., 2019).
The literature review discusses accounting AI adoption. The technology-organization-
environment (TOE) framework, established by Tornatzky and Fleischer (1990), illustrates how
the technical, organizational and environmental contexts impact how firms accept and execute
technological advancements. Considering technical, organizational and environmental aspects,
the TOE framework helps explain accounting technology adoption. This approach allows
researchers to discover crucial elements affecting adoption behavior and propose ways to
increase new technology adoption (Oliveira and Martins, 2011).
Another common theory used in the AI adoption and accounting field is the technology
acceptance model (TAM). TAM is a theoretical framework that explains individuals’
acceptance of information systems (Ma and Liu, 2004). According to TAM, users’ behavioral
intentions indicate whether they would embrace technology. Behavioral intentions are, in
turn, influenced by users’ perceptions of the technology’s utility in carrying out the task and
perceived simplicity (Ma and Liu, 2004). Researchers in accounting have used TAM to
examine factors influencing the adoption of accounting systems (Souza et al., 2017). Using
this framework, researchers can identify key factors that influence adoption behavior and
develop strategies to promote the successful adoption of new technologies in accounting.
Recent research used the unified theory of acceptance and use of technology (UTAUT)
framework to examine technology acceptance, determined by the effects of performance
expectancy, effort expectancy, social influence and facilitating conditions (Chao, 2019). In
addition, in accounting, UTAUT can be used to explain the adoption behavior of
technological innovations such as cloud-based accounting systems (Dwivedi et al., 2019).

2.2 Opportunities and challenges for adopting artificial intelligence in public-sector accounting
AI technology has the potential to revolutionize the accounting profession by increasing the
accuracy of financial reporting, reducing costs and improving efficiency. Despite these
potential benefits, adopting AI technology in the public sector has been slower than in the
private sector. Various factors have been identified in the literature that influence adopting
AI technology in the accounting profession in public sector settings. This section explores
these factors in detail.
2.2.1 Lack of resources and expertise. The lack of resources and expertise is a significant
barrier to adopting AI technology in public-sector accounting. Implementing AI technology
requires significant infrastructure, software and training investment, which can be a challenge
for many public sector organizations. AI technology requires high computing power and
CR significant storage capacity, which may be too expensive for smaller organizations. In addition,
34,1 there may be a shortage of AI experts in the public sector, making it difficult for organizations
to implement AI technology without the necessary expertise.
Research has shown that small and medium-sized accounting firms are more likely to
face difficulties in adopting AI technology due to a lack of resources (Miah and Hasan, 2019).
In a study conducted in Vietnam, Dang et al. (2019) found that the lack of resources and
6 expertise was a significant barrier to adopting AI in accounting. Similarly, Chen et al. (2019)
noted that the lack of AI expertise and the cost of implementation were the primary barriers
to AI adoption in the accounting profession.
2.2.2 Concerns about the impact of artificial intelligence on the workforce. Implementing
AI technology in the accounting profession can lead to job displacement, as AI technology
can perform many of the tasks humans previously performed. This can create resistance to
change among employees, as they fear that AI technology will replace their jobs. Concerns
about the impact of AI on the workforce can lead to a lack of support for adopting AI
technology among employees and stakeholders.
Several studies have highlighted the potential impact of AI on the workforce in the
accounting profession. For example, El-Kassar and Abbas (2020) found that employees’ fear
of job displacement was a significant barrier to adopting AI technology in accounting.
Similarly, Lobo and Varghese (2019) noted that employees’ concerns about job displacement
were a significant barrier to adopting AI in accounting.
2.2.3 Resistance to change. Implementing AI technology requires significant organizational
processes and culture changes, which can be challenging for some organizations to implement.
In addition, there may be resistance from employees and stakeholders who are hesitant to
adopt new technology. Resistance to change can be a significant barrier to adopting AI
technology in accounting.
Research has shown that resistance to change is a significant barrier to adopting AI
technology in accounting. For example, Uyar and Kılıç (2021) found resistance to change
was a significant barrier to adopting AI technology in accounting in Turkey. Mahmoud and
Al-Khouri (2021) also noted that resistance to change was a significant barrier to adopting
AI technology in the accounting profession in the United Arab Emirates.
2.2.4 Lack of understanding of artificial intelligence technology. A lack of understanding
of AI technology is also a significant barrier to its adoption in public accounting. Many
public sector organizations lack knowledge of AI technology’s potential benefits and
limitations, which can prevent them from making informed decisions about its adoption. In
addition, there may be a lack of understanding of the technical requirements to implement
AI technology.
Research has highlighted the lack of understanding of AI technology as a significant
barrier to its adoption in accounting. For example, Islam et al. (2020) found that the need for
more understanding of AI technology was a significant barrier to its adoption in accounting
in Bangladesh. Hoque et al. (2018) also noted that the lack of understanding of AI technology
was a significant barrier to its adoption in accounting.
2.2.5 Regulatory and ethical concerns. Regulatory and ethical concerns can also influence
the adoption of AI technology in the accounting profession. AI technology can raise ethical
concerns, such as bias in decision-making or violation of data privacy laws. In addition,
regulatory requirements may need to be modified to accommodate the use of AI technology
in accounting practices.
Research has highlighted the importance of addressing regulatory and ethical concerns for
successfully adopting AI technology in accounting. Yang and Lin (2018) noted that regulatory
requirements might be modified to accommodate the use of AI technology in accounting
practices. Similarly, Mahmoud and Al-Khouri (2021) noted the importance of successfully The case of
addressing ethical and regulatory concerns to adopt AI technology in accounting. public sector in
Kuwait
3. The research model
3.1 The developed framework
The framework of AI adoption was divided into organizational and individual levels. At the
organizational level, certain variables help to embrace AI models. On the other hand, the 7
individual level demonstrates the variables that support employees to adopt AI applications.
The developed framework in Figure 1 is built on assumptions derived from the abovementioned
literature.

3.2 Organization culture and adoption artificial intelligence

Creativity is usually fostered through workplace behavior. Senior management’s attitudes,
behaviors and work ethics shape the culture that subordinates emulate (Aboelmaged, 2014).
Management influences innovation culture. Thus, the leadership team must communicate
and demonstrate attention to AI in the workplace. Leadership reluctance to adopt novel
administrative practices might prevent AI adoption in the workplace. Management that

Figure 1.
Conceptual
framework
CR embraces new technology fosters excitement, especially with financial incentives (Van
34,1 Noordt and Misuraca, 2020). To this end, this study hypothesizes:

H1. Organization culture positively impacts adopting AI in the accounting profession.

3.3 Communication structure and adopting artificial intelligence

8 A top-down communication mechanism is critical in the implementation of new ideas. Top
management must support a sound communication system since their commitment to
engaging subordinate personnel can impact the firm’s readiness to accept innovation.
According to the resource-based theory, a lack of support from senior management might
result in diminished competitiveness and an inability to adopt new technologies (Buzko
et al., 2016). Clement and Eketu (2019) assert that organizational leadership that minds the
welfare of their employees can easily retain and engage with them due to the high levels of
motivation and feelings of job satisfaction that they arouse in them. The management can
collect employee views on the need to update technology, increasing AI acceptance. As a
result, this study proposes the following hypothesis:

H2. Efficient communication channels positively impact the adoption of AI in the

accounting profession.

3.4 Competitive pressure and adopting artificial intelligence

Companies often use competitive pressure to deploy new technologies, responding to current
market dynamics and demands (Yang et al., 2015). This competitiveness relates to the market
danger. Such pressure increases the danger of losing market share. This can motivate to
embrace; consequently, AI technology is one of the leading techniques firms use. According to
Fast and Horvitz (2017), implementing AI can foster innovation that benefits individuals and
firms, improving managerial decision-making and consumer experiences. Thus:

H3. Competitive pressure positively impacts adopting AI in the accounting profession.

3.5 Regulatory support and adoption of artificial intelligence

Government policies also influence an organization’s readiness to use AI. Tax policies,
organizational obligations, accountability and ethics in decision-making processes are all
explored in this study (Wang and Siau, 2018). The adoption of AI differs by country due to
various policies. For example, numerous companies in China have adopted AI due to lenient
regulations and technological competence. However, negative perceptions regarding its
complexity discourage further adoption (Chen et al., 2020). Some policies are changed to
accommodate AI-enabled products and services. These efforts promote innovation. Therefore:

H4. Regulatory support positively impacts adopting AI in the accounting profession.

3.6 Resources availability and adopting artificial intelligence

An organization’s technological and financial resources must be considered while adopting
and integrating new technologies. The issues of a company determine its ability to adopt
new technology. Therefore, organizations must have technological know-how and resources
in software, networking and computer hardware to foster innovation. According to a 2016
Narrative Science survey, over 59% of firms with good data management abilities use AI The case of
technologies (Zhang et al., 2020). public sector in
Human employees and system technology are two types of organizational resources. An
organization’s human capabilities should be enough to comprehend the approaches
Kuwait
required to incorporate intelligent robots. Unfortunately, firms lacking human skills
frequently fail to integrate new technology and adapt to change (Alsheibani et al., 2018).
However, research reveals that firms with sufficient human infrastructure and technology 9
can deploy AI. Hence, this study proposes the following hypothesis:

H5. Resource availability positively impacts adopting AI in the accounting profession.

3.7 Perceived usefulness and adopting artificial intelligence

Perceived usefulness refers to a corporation’s perceived benefits from implementing AI. Based
on the research topic, usefulness shows how businesses use AI beyond the original system’s
efficiency, and adaptability describes how it may be infused into existing systems (Kumar
et al., 2016). The perceived benefits of adopting new technology can considerably affect a
company’s decision to accept it or not. Other research has found a link between innovation
adaptability and organizational readiness to adopt new technology (Aboelmaged, 2014). A
company’s prospects of adopting AI increase when deep learning and machine learning (ML)
are used in daily accounting procedures. Thus:

H6. Perceived usefulness positively impacts adopting AI in the accounting profession.

3.8 Perceived ease of use and adopting artificial intelligence

Perceived ease of use is one of the critical factors in the acceptance of new technologies that
would be described as the user’s simplicity and convenience and influences customers’
interest (Abdallah et al., 2023). Usability is required for acceptance. Organizations use AI
applications that are suitable for their operations. Simple organizational processes call for
straightforward AI technologies, whereas complex ones demand the reverse. Wang and
Siau (2018) state that easy-to-use and reliable AI applications develop trust among users.
Trust-building is a two-step process that starts from scratch to continuous trust. It is
dynamic; hence, maintaining trust requires relevant and capable AI technologies that
elucidate work-related actions or conclusions, secure personal data and bond, socialize,
interface and collaborate appropriately with humans. These benefits need to outweigh fears
attached to AI, such as replacement and displacement from work, to ensure the trust
remains. A bad user experience and interface increase rejection. Chi et al. (2020) reveal that
AI devices with human-like features, such as anthropomorphism and technological
knowledge, shape attitudes toward AI.
Anthropomorphism evokes mixed feelings; for instance, human-like AI devices that offer
hotel services arouse negative attitudes toward robots in customers. Alternatively, people
who possess IT skills significantly appreciate AI. Lastly, the innovation’s facilities are vital
to use. These features may simplify activities, save time and money or increase usage.
Therefore, this study proposes the following hypothesis:

H7. Perceived ease of use positively impacts adopting AI in accounting.

CR 3.9 The mediating role of accounting profit between perceived usefulness and adopting
34,1 artificial intelligence
By BAT, accountants always favor practices that profit them. So, the technology’s
usefulness is assessed by whether it generates accounting profit for the firm. L
opez-
Cabarcos et al. (2020) state that knowledge is essential to every organization; however, its
uses differ. It can be acquired and exploited as proposed by the knowledge-based theory. In
10 addition, it can be presented in two forms, tacit and explicit. Tacit denotes perceptible
knowledge only when applied and communicated through personal interaction, while
explicit refers to easily communicable and systematic knowledge. As put forward by
knowledge-based theory, the uniqueness of tacit knowledge can individualize products and
services, providing firms with competitive advantages. AI, ML and emerging digital
technologies codify and elucidate that form of knowledge constitute organizational data.
Therefore, firms ensure profitability. Similarly, Kaya et al. (2019) assert that the European
banking sector has benefited significantly from integrating AI into banking services. It
boosts banks’ return on assets and labor productivity, reducing costs and giving them a
competitive edge. These advantages have resulted in increased investments in AI,
amounting to US$24bn in 2018, and experimentation and implementation of the emerging
technology in Europe, particularly in the United Kingdom (UK), France and Germany.
Accounting profit is thus a requirement for AI deployment. Therefore:

H8. Accounting profit positively mediates the relationship between perceived usefulness
and adopting AI in the accounting profession.

3.10 The mediating role of behavioral intention between perceived usefulness and adopting
artificial intelligence
AI adoption requires a behavioral intention to use the technology in this situation. Furthermore,
an easy-to-use experience is needed to sustain this practice. Many theories highlighted the
previous interrelationships. For example, the transtheoretical model or stages of change
suggests that change occurs in phases and involves numerous actions. The stages are pre-
contemplation, contemplation, preparation, action and maintenance. Actions include considering
change, planning for it, adopting new habits and constantly practicing new behaviors (Quartuch
et al., 2021). Employees hold negative perceptions about AI and fear integrating it into their
tasks. Besides significantly altering their professions, employees fear it might replace them
(Mirbabaie et al., 2022). These fears could hinder its acceptance in the workplace. Nonetheless,
demonstrating its ease to use and assurance of employees’ job security can facilitate its
acceptance. Behavior follows personal and environmental factors proposed by the social
cognitive theory. Actions, one’s own or others, and their outcomes are great motivators of
learning (Beauchamp et al., 2019). Reinforcements induce learning as well. Reinforcement, in this
case, is the simplicity of using AI in the workplace to encourage its adoption. Thus:

H9. Behavioral intention positively mediates the relationship between perceived ease of
use and adopting AI in the accounting profession.
As indicated earlier, there is a strong argument in the literature on the opportunities created
for an organization that adopts AI in its operations and the associated challenges of
applying these emerging technologies in accounting. The conceptual framework assumes
several potential factors influencing public organizations to adopt AI in their accounting
activities. It involves the underlying theories of AI and accounting to form its deductive
argument for using AI in accounting. The conceptual framework shown in Figure 1 depicts The case of
the interactions and associations among the variables. public sector in
Kuwait
4. Methods
4.1 Measurement tool
The questionnaire of this study was developed using multiple sources to measure the
dependent, independent and mediation variables (Yang et al., 2015; Buzko et al., 2016 Wang 11
and Siau,2018; Li et al., 2019). The developed questionnaire consists of 39 questions, as
presented in Appendix, and is split into two sections to consider the logical order of
questions. The first section includes five questions related to demographic characteristics.
The second section comprises 34 questions for the dependent, independent and mediator
variables covering AI adoption (five questions), organizational level factors (15 questions),
individual-level factors (six questions), accounting profit and behavioral intention (six
questions) and additional questions (two questions) to find some insights like the type of the
organization and to what extent the participant familiar to AI. Following a logical order of
listing the questions keeps the respondents’ focused. All participants were given a
confidentiality form to show the study’s purpose and ensure their names were kept
anonymous. Also, they were allowed to opt out or leave any unanswered questions at any
point.

4.2 Sampling technique and data collection

The judgmental sampling technique is an approach in which the researcher trusts their
judgment when selecting population samples to contribute to the study. The logic behind a
judgmental sampling technique is to get a representative sample using sound judgment,
saving time and money (Taherdoost, 2016). Therefore, a judgment sampling approach
was used to select the targeted sample from Kuwaiti public organizations. This study’s
sample consisted of accounting professionals experienced in Kuwait’s public organizations.
Considering the extensive size of the public firms, which constitute a vast sector employing
numerous accounting professionals. Data were collected through questionnaires distributed
among the selected public organizations. This study adopted a cross-sectional time frame
with acceptable accuracy and cost-effectiveness (Souza et al., 2017). The research data were
collected over two months, November
December 2021.

4.3 Statistical analysis

The demographic background of participants was analyzed using Excel 2013. The study
used the partial least square structural equation modeling technique to examine the
descriptive data, evaluate the measurement’s validity and reliability and verify the
hypotheses. According to Dwivedi et al. (2019), the approach provides a remarkably
adaptable design for the concurrent evaluation of complex models, management of reflective
and formative measurement models, and constructs consisting of a single item. The path-
weighting scheme setting was used with SmartPLS 3 software to conduct calculations.
The research model was evaluated through a two-step procedure. The use of the
measurement model facilitated the assessment of the dependability and legitimacy of the
measurements. In contrast, the structural model was used to evaluate the structural
interconnection between the constructs. The initial phase involved using the measurement
model, which comprised two levels, namely, the first-order and second-order levels. The
subsequent step involves the structural model. The initial factors are reflective constructs.
The study analyzed reflective measurement models through the use of various criteria.
These criteria included indicator loading, which was required to be greater than 0.7;
CR composite reliability, which was needed to be greater than 0.6; average variance extracted
34,1 (AVE), which was required to be greater than 0.5; and discriminant validity, which refers to
the degree to which a construct is genuinely distinct from other constructs (Schroeder et al.,
2019). Consequently, the Fornell–Larcker criterion was used to achieve this objective.
At the second-order level of analysis, it is observed that all factors are indicative of
formative measurements. The study used three criteria: outer weight with a minimum
12 value of zero, p-value with a maximum threshold of 0.05 and variance inflation factor
(VIF) with a maximum limit of 5. In the second phase, the structural model was used to
examine the research hypotheses and assess the correlation between variables using
the path coefficient, p-value and R2. Subsequently, the standardized root mean square
residual (SRMR) was evaluated to determine the model’s overall fit. When the SRMR
value equals 0, it indicates an optimal fit, whereas 0.085 indicates a satisfactory fit. The
structural model calculations were conducted using the bootstrapping procedure with
5,000 bootstraps to evaluate its efficacy.

5. Results
5.1 Demographic analysis results
The study involved the distribution of 450 surveys to experienced accounting professionals
working in public organizations in Kuwait. A total of 393 surveys were completed and
returned, resulting in a response rate of 78.3%. Table 1 shows the characteristics of the
respondents that confirm males’ higher participation than females. Also, it indicates that
participants holding bachelors are more than 50% of the sample. Regarding ages, the results
show that age groups are computed consistently.
In addition, the survey has also collected data on the job category of the participants.
Table 2 provides the results that indicate higher participation from accountants (70%),
followed by those who are working in auditing (17%), and lastly, the bookkeeper category,
which indicates the lowest participants (13%). It indicates that most participants were lay in
the group 5–10 years, food by juniors less than five years, contributed by 109 responses.

5.2 Descriptive analysis results

Five Likert-scale questions evaluate the factors. One strongly disagrees, and five strongly
agree. Table 2 shows the factor mean, standard deviation, skewness and kurtosis. All
variables’ means are 3–4 scores, indicating that the respondents have a positive perception
of all variables. Regulatory support has the highest mean response of 4.057, while
behavioral intention scores the lowest mean of 3.2911. The standard deviation indicating
data variations indicates that the perceived usefulness has the highest variation of 1.190. In
contrast, regulatory support shows the lowest standard deviation of 0.821, indicating that
ideas are stable on the regulatory support. Respondents tend to be semi-consistent in their
beliefs, showing around one standard deviation. All variables have negative skewness,
indicating left-side tail distribution. Kurtosis is normal because all values are between
3
and 3.

5.3 Measurement model results

Table 3 provides a summary of the measurements for the first-order construct. In terms of
outer loading, all items are above 0.7 except AA1 and CP3. As AA1 scores a shallow value of
0.299, it is eliminated from the model. However, CP3 scores 0.619, which is acceptable as it is
more than 0.4, and the variable score values of Cronbach’s alpha, composite reliability and
average variance were extracted. In addition, regulatory support scores Cronbach’s alpha of
Respondents characteristics Frequency (n ¼ 393) %
The case of
public sector in
Gender Kuwait
Female 114 29
Male 279 71
Total 393 100
Age
30 and younger 87 22
13
31–40 92 23
41–50 97 25
51–60 56 14
61 and older 61 16
Total 393 100
Job category
Accountant 274 70
Auditor 67 17
Bookkeeper 52 13
Total 393 100
Experience
Less than 5 years 109 28
5–10 years 174 44
11–20 years 87 22
More than 20 years 23 6
Total 393 100
Education
High school 36 9
Diploma 59 15
Bachelor’s degree 228 58
Master’s degree 60 15
Doctoral degree 10 3
Table 1.
Total 393 100 Demographic
characteristics of the
Source: Table by authors respondents

Variable Mean SD Skewness Kurtosis

Organizational culture 3.423 1.1
0.591
0.226

Communication structure 3.518 1.128
0.535
0.426
Competitive pressure 3.817 0.963
0.969 1.167
Regulatory support 4.057 0.821
1.05 2.085
Resources 3.83 0.939
1.013 1.064
Perceived usefulness 3.439 1.19
0.556
0.591
Perceived ease of use 3.62 1.07
0.805 0.347
Behavioral intention 3.291 1.076
0.388
0.335
Accounting profit 3.635 1.065
0.828 0.454
AI adoption 3.598 1.028
0.781 0.654
Table 2.
Source: Table by authors Descriptive analysis
CR Cronbach’s Composite Average variance
34,1 Outer loading alpha reliability extracted
Variables Items > 0.7 > 0.7 > 0.7 > 0.5

AI adoption AA1 0.299 0.779 0.855 0.563

AA2 0.767
AA3 0.874
14 AA4 0.836
AA5 0.819
Accounting profit AP1 0.822 0.832 0.899 0.749
AP2 0.893
AP3 0.88
Behavioral intention BI1 0.834 0.764 0.859 0.67
BI2 0.789
BI3 0.832
Communication structure CM1 0.895 0.878 0.923 0.801
CM2 0.898
CM3 0.891
Competitive pressure CP1 0.855 0.702 0.833 0.629
CP2 0.88
CP3 0.619
Organizational culture OC1 0.931 0.88 0.926 0.806
OC2 0.899
OC3 0.862
Perceived ease of use PE1 0.801 0.815 0.89 0.73
PE2 0.881
PE3 0.879
Perceived usefulness PU1 0.927 0.874 0.922 0.799
PU2 0.931
PU3 0.818
Regulatory support RG1 0.798 0.692 0.831 0.622
RG2 0.847
Table 3. RG3 0.714
Resources RS1 0.866 0.858 0.914 0.78
Results of reflective RS2 0.904
construct RS3 0.878
measurements (first
order) Source: Table by author

0.692, which is acceptable because it scores 0.831 for composite reliability and 0.622 for
AVE.
Table 4 shows the findings of the Fornell–Larcker criteria. The square root of each
variable’s AVE was greater than its highest correlation with any other variable, indicating
that discriminant validity is established (Afthanorhan et al., 2021). Therefore, the variable
shares more variance with its correlated indicators than any other variable.
The formative construct measurements (second-order) results are presented in Table 5.
All weights were significant > 0, p-value < 0.05, and VIF values were below 5.

5.5 Structural model results

The structural model was used to test the significance of the nine hypotheses of this study.
Table 6 shows the path coefficient and p-value of the organizational and individual factors.
The results of organizational factors indicate that organizational culture and regulatory
 AI Accounting Behavioral Communication Competitive Organizational Perceived Perceived Regulatory
Variable adoption profit intention structure pressure culture ease of use usefulness support Resources

AI adoption 0.75
Accounting profit 0.74 0.86
Behavioral intention 0.481 0.43 0.81
Communication structure 0.26 0.32 0.21 0.89
Competitive pressure 0.58 0.65 0.30 0.40 0.79
Organizational culture 0.65 0.69 0.36 0.33 0.71 0.89
Perceived ease of use 0.76 0.99 0.42 0.32 0.66 0.70 0.86
Perceived usefulness 0.42 0.43 0.24 0.08 0.22 0.24 0.43 0.89
Regulatory support 0.44 0.36 0.24 0.17 0.38 0.36 0.4 0.26 0.78
Resources 0.62 0.67 0.31 0.34 0.66 0.65 0.69 0.29 0.50 0.88

Source: Table by authors

Table 4.
Kuwait
public sector in
The case of

criterion
Fornell–Larcker
15
CR support factors positively impacted AI adoption by the path coefficient values of 0.180 and
34,1 0.099, respectively, as they score less than 0.05 p-value. On the other hand, communication
structure, competitive pressure and resources are unsupported with the path coefficient
values of 0.594, 0.924 and 0.093, respectively. At the same time, the results of individual
factors indicate that perceived usefulness and ease of use positively impacted AI adoption
by the path coefficient of 0.120 and 0.199. In addition, accounting profit and behavioral
16 intention as mediator variables partially supported perceived usefulness and ease of use by
the path coefficient of 0.494 and 0.471, respectively; they scored less than 0.05 p-value. The
R2 value of the dependent variable AI adoption was 0.625, which indicates the extent to
which the different organizational and individual factors significantly affect AI adoption in
the accounting profession. Moreover, the SRMR score expresses a good fit with a value of
0.068, suggesting it is less than 0.085 (Benitez et al., 2020).

6. Discussion, conclusions and future insights

AI systems have significantly changed the accounting industry (Fast and Horvitz, 2017;
Solaimani et al., 2020). However, few studies have examined the perception of accountants
about AI adoption in the public sector (Bakarich and O’Brien, 2021). In addition, this
industry is known for its high complexity, diversity and accountability, which may make it
challenging to implement AI systems in accounting (Agostino and Arnaboldi, 2016).
Therefore, this study aims to examine the perception of accounting practitioners
regarding the factors affecting using AI-based solutions in accounting processes in the
public sector in Kuwait, where most Kuwaiti nationals work in public sector (Ghura et al.,
2021). The study’s factors are stemmed from different theories of AI adoption (Ma and Liu,
2004; Oliveira and Martins, 2011; Chao, 2019) and developed in a framework that includes
organizational culture, effective communication channels among different management
levels, keeping a competitive edge, supportive government policies for technology
absorption, human and financial capital availability and the perceived usefulness and ease
of use of AI adoption among accountants. Addressing these factors is critical for public
organizations to successfully implement AI technology and reap the benefits of increased
efficiency, accuracy and reduced costs.
The study’s findings found that organizational culture, regulatory support, perceived
usefulness and ease of use have a direct positive effect on public accountants’ AI adoption,
while perceived usefulness and ease of use also have an indirect positive effect through

Items Weight p-value Variance inflation factor (VIF)

Critical value >0 < 0.05 <5

AI adoption 0.311 0.000 2.185
Accounting profit 0.380 0.000 2.566
Behavioral intention 0.465 0.000 1.260
Communication structure 0.327 0.000 1.217
Competitive pressure 0.467 0.000 2.566
Organizational culture 0.312 0.000 2.618
Table 5. Perceived ease of use 0.428 0.000 1.988
Perceived usefulness 0.338 0.000 1.253
Results of formative Regulatory support 0.437 0.000 1.359
construct Resources 0.381 0.000 2.509
measurements
(second-order) Source: Table by authors
Hypothesis Relationship Direct effect Indirect effect CI 2.5% CI 97.5% p-value

H1 Organizational culture ! AI Adoption 0.180 – 0.051 0.292 0.000

H2 Comm. structure ! AI adoption
0.019 –
0.089 0.056 0.594
H3 Competitive pressure ! AI adoption 0.006 –
0.110 0.133 0.924
H4 Regulatory support ! AI adoption 0.099 – 0.013 0.182 0.021
H5 Resources ! AI adoption 0.095 –
0.013 0.209 0.093
H6 Perceived usefulness ! AI adoption 0.120 – 0.041 0.197 0.003
H7 Perceived ease of use ! AI adoption 0.199 – 0.173 0.223 0.000
H8 Perceived usefulness ! Accounting profit ! AI adoption – 0.494 0.322 0.670 0.000
H9 Perceived ease of use ! behavioral intention ! AI adoption – 0.471 0.332 0.522 0.002

Source: Table by authors

Path coefficient
Table 6.
Kuwait
public sector in

17
The case of
CR accounting profit and behavioral intention. The previous results are in line with the current
34,1 literature, which highlights that several organizational and individual factors have a
significant influence on the adoption of AI technologies (Kumar et al., 2016; Beauchamp
et al., 2019; Kaya et al., 2019; Van Noordt and Misuraca, 2020; Chen et al., 2020; Abdallah
et al., 2023).
However, contrary to expectations, the results showed that the availability of resources
18 and effective communication channels have an insignificant impact on AI adoption. An
explanation might be that the availability of resources (e.g. talent, assets and capabilities)
and effective leadership structure have a long-term rather than a short-term effect on AI
adoption goals. Also, this study did not prove the competitive factor’s relevance because the
government does not compete. No market share loss pressure exists either.
Based on the study’s findings, adopting AI systems in accounting and auditing can
provide many benefits to the public sector in Kuwait, such as using AI to automate
repetitive tasks and reduce errors (Stancu and Dutescu, 2021). To promote the adoption of
AI in accounting in the public sector, public organizations can consider implementing
policies such as increasing investment in AI development (Mohmmad et al., 2020), educating
and training different stakeholders (e.g. accountant practitioners) on the potential benefits of
AI (Albawwat and Frijat, 2009) and addressing ethical and social dilemmas that may arise
from AI adoption (Rkein et al., 2019; Nayak and Sahoo, 2021).
Moreover, developing an effective AI communication and governance strategy for public
organizations involves several key steps, including assessing current AI capabilities,
fostering different stakeholders’ collaboration and transparency (Mancini, 2021), evaluating
the potential risks associated with AI (e.g. financial data leakage), taking measures to
mitigate these risks and establishing a sound legal system and regulatory framework for AI
technology to ensure its safe and effective use (Jin, 2022). Finally, leaders in the public sector
must align the organization’s culture, structure and working methods to support broad AI
adoption. As a result, public organizations can improve efficiency, accuracy and decision-
making in accounting and auditing processes (Hasan, 2022).
The study’s results have specific limitations that potentially open the door for future
research. First, the current research did not include other variables that might affect
accounting practitioners using AI in the public sector, such as age, gender, risk tolerance
and ethical and social factors (Mancini, 2021). Second, the target population is focused on the
context of Kuwait, and future studies are recommended to have a larger sample size and
identify different determinants, such as a comparison between a cross-country study that
can identify different perceptions in the public sectors (Noordin, 2022). Finally, future
studies should focus on qualitative research to have a more in-depth analysis of the factors
influencing AI adoption in accounting in the public sector (Rkein et al., 2019).
Overall, the study’s findings suggest that combining AI technology with accounting
work is necessary to promote the further development of the accounting industry for the
public sector in Kuwait. We hope that our research will contribute to a better understanding
of the impact of AI on the accounting industry and provide valuable insights for financial
practitioners in this field.

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Corresponding author
Amina Buallay can be contacted at: [email protected]
Appendix The case of
public sector in
Kuwait
Items Statement

Organizational culture
OC1 Our managers are ready to assume the risks associated with AI adoption
OC2 Learning as a means to progress is our organization’s fundamental value 27
OC3 Organizational culture is critical in AI adoption

Communication structure
CS1 Communication across our departments is critical to the successful adoption of AI technology
CS2 Our staff regularly talks about ways to improve the work
CS3 It is customary to offer suggestions to our supervisors, who consider and, if appropriate, execute them

Competitive pressure
CP1 As a strategic core competency, our managers can harness emerging IT technology
CP2 In our primary organization, there is a tendency toward using more AI technology for development
CP3 Moving the business to use AI technology for innovation puts pressure on us to do the same

Regulatory support
RS1 There is regulatory backing for AI innovation
RS2 The government may give financial assistance for the adoption of AI
RS3 AI adoption is encouraged by government policy

Resources
RE1 Our organization has the financial resources to adopt AI
RE2 We already have competent personnel to adopt AI in our system
RE3 We have enough time to launch an AI project

Perceived usefulness
US1 Using AI to handle automated jobs will decrease my burden
US2 Compared to critical thinking jobs, repetitive manual chores waste time
US3 Our clients are enthusiastic about new AI-powered offerings

Perceived ease of use

EU1 Our organization can swiftly integrate new AI technology with our existing accounting processes
EU2 Technologies must be simple to use
EU3 Our employees are accustomed to dealing with cutting-edge technology

AI implementation
AA1 AI technology will be a valuable asset to our organization
AA2 A suitable AI adoption strategy has been designed
AA3 The proposal has already been approved by management
AA4 A financial budget and an application transfer plan have been authorized for AI adoption
AA5 After integrating AI innovation, our organization improved

Behavioral intention (BI)

BI1 I will continue to use AI
BI2 I will use AI in the future
BI3 I plan to use the AI often

Accounting profit (AP)

AP1 AI will not be used unless the saving cost exceeds its implementation cost
AP2 AI will not be used unless it exposes new opportunities to generate more profits
AP3 AI will bring more opportunities to our staff

To what extent you are familiar to AI?

Novice Beginner Competent Proficient Expert

What is your organization category?

State Ministries and Departments Supplementary budget entities Independent authorities and establishments
Table A1.
Questionnaire
Source: Table by authors statements