Transforming public sector accounting through AI: organisational capabilities, implementation effectiveness, and public value

Abstract
This study examines how public sector organisations convert the potential of artificial intelligence (AI) in accounting information systems into public value (PV). Drawing on public value theory, it investigates how organisational capabilities—AI readiness (AIR) and digital governance capability (DGC)—influence implementation effectiveness (IE), and how the digital work climate (DWC) strengthens the relationship between IE and PV. The study adopts a quantitative research design using survey data collected from 348 public-sector employees in Iraq and tests the proposed model using partial least squares structural equation modelling (PLS-SEM). The results indicate that AIR and DGC are positively associated with IE. IE also serves as an important pathway linking organisational capabilities to PV outcomes, while the DWC strengthens the relationship between IE and PV. The study contributes to the literature on public-sector digital transformation by providing a process-oriented explanation of how DGC, governance arrangements, and IE practices interact to support AI-enabled PV creation in public financial management systems, particularly in institutionally complex administrative contexts.