Technology–organisation–environment determinants of cloud accounting usage and quality of financial reports in Indonesian SMEs

Small and Medium Enterprises (SMEs) play a crucial role in Indonesia's economic growth. Although the number of SMEs continues to increase, most still face limitations in accounting literacy and in the use of digital technology, resulting in suboptimal financial reporting quality. This condition is reflected in the fact that only around 30% of SMEs are capable of preparing financial reports independently. In this context, cloud accounting offers a practical solution to help SMEs produce more structured and high-quality financial reports. However, the use of cloud accounting by SMEs in Indonesia is influenced by various interacting technological, organizational, and environmental factors. This study aims to analyse the factors influencing cloud accounting adoption and its role in improving the quality of financial reports by SMEs in Indonesia using the Technological, Organizational, and Environmental (TOE) framework. This study examined nine variables: technology readiness, perceived benefits, security concerns, top management support, firm size, financial costs, competitive pressure, regulatory environment, and vendor support. The study respondents were SMEs in Indonesia registered as active members of the crowdfunding platform santara.co.id. Data from 216 respondents were analysed using Partial Least Squares–Structural Equation Modelling (PLS-SEM). The results showed that technology readiness, top management support, firm size, financial cost, and the regulatory environment directly influenced cloud accounting adoption, while vendor support exhibited a negative effect, contradicting the initial hypothesis. Furthermore, cloud accounting served as a mediating variable linking most TOE factors to the quality of financial reports, except for perceived benefits, security concerns, and competitive pressure. These findings suggest that in the context of Indonesian SMEs, which are still in the early stages of technology usage, internal readiness and institutional support are more important than perceived benefits or competitive market pressure. Unlike previous TOE framework-based technology usage studies, which tended to position technology, organization, and environment dimensions as equal determinants, this study reveals an asymmetric TOE configuration, where organizational factors play a more dominant role in driving cloud accounting usage. By positioning cloud accounting as a mediating mechanism between organizational readiness and the quality of financial reports, this study extends the application of the TOE framework beyond simply studying technology use to its implications for accounting information quality in the context of SMEs in a developing country, namely Indonesia. Practically, these findings provide implications for SMEs, cloud accounting service providers, and the government in designing technology-use strategies that better align with the characteristics and limitations of Indonesian SMEs. However, this study has several limitations. The sample was limited to SMEs registered on a single crowdfunding platform, which limits the generalizability of the findings to the broader population of SMEs in Indonesia. Furthermore, the cross-sectional design limits the ability to observe changes in technology usage behavior over time. Future research should expand the analysis by using more complex methods, including mixed-methods approaches, engaging SMEs from various sectors and platforms, and adding other theories and variables to enrich the research.