The Application of Digital Technology in Australian Small Accounting Firms

Digital technologies, including Cloud Accounting, Artificial Intelligence (AI), Blockchain, Big Data, and the Internet of Things (IoT), have a significant impact on business operations, including service delivery and market competition. The rapid growth of these technologies has transformed the accounting industry in Australia. Small accounting firms are integral to Australia’s professional services sector. However, limited research exists on the adoption and impact of such technologies. Guided by the Technology–Organisation–Environment (TOE) framework, supported by elements of Diffusion of Innovation (DOI) theory, this study investigates the digital technologies currently used by small accounting firms in Australia, and examines their impacts, challenges, strategic planning and budgeting approaches. It also compares current adoption with future intention to adopt digital technologies between small and micro accounting firms. Data was collected using an online survey of accountants working in Australia’s small accounting firms. Results reveal that while small accounting firms are cautiously adopting certain digital technologies, primarily due to their perceived benefits, such adoption is hindered by various challenges, including data privacy, cost, and cybersecurity concerns. Despite these findings, many firms report intentions to adopt different technologies in the near future, recognising their potential to enhance productivity and competitiveness. The study also identifies a gap between operational adoption and strategic implementation, with some firms using digital technologies as operational tools rather than as part of their broader strategic plans. Additionally, the results show a notable difference between these accounting firms’ present and planned usage of digital technologies. Overall, the insights from this study’s results provide practical implications for Australia’s small accounting firms to prioritise technology investments, for technology providers to tailor solutions for these firms, and for policymakers to develop supportive frameworks, training programs, and funding incentives to facilitate these firms’ adoption of digital technologies.