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This study aims to explore the extent to which micro, small and medium-sized enterprises (MSMEs) in Saudi Arabia are adopting cloud-based accounting systems, what cloud accounting technologies MSMEs are using and the factors that affect cloud accounting system adoption. The technology, organizational and environmental model was used to assess the factors that affect the adoption of cloud accounting systems.

Data were collected via a survey distributed to MSME owners, directors and chief executives in Saudi Arabia. The final sample comprised 174 participants. Descriptive statistics, multiple response analysis and logistic regression were used to analyze the data.

This study’s findings show that many MSMEs currently do not use cloud accounting. The findings also show that Sage One and Xero Accounting are the main cloud accounting technologies MSMEs use. Perceived benefits, security concerns, organizational readiness, government support and vendor support were found to significantly influence the adoption of cloud accounting systems, while compatibility, firm size, top management support and intensity of the competition were not found to affect MSMEs adoption of cloud accounting technologies.

To the best of the authors’ knowledge, this study is the first to explore cloud accounting adoption by MSMEs in Saudi Arabia. It empirically shows the extent to which cloud-based accounting systems are used in MSMEs and the significant factors influencing the adoption of these systems.