ABSTRACT
The study examined the accounting information system and the growth of small and medium scale enterprises (a study of SME’s in Lagos metropolis). Two theories were used in the study to have a wide scope in the research, namely; the Contingency Theory and the Design of Accounting Information System and the Technology Acceptance model (TAM). The sample of the study comprised ten SME’s in Lagos State, five from the island and five from the mainland. Primary data was used in the study. A structured questionnaire was used to collect necessary data from the selected staff of the SME’s. The purposive sampling technique was used to select two hundred (200) staffs from ten (10) SME’s. In furtherance, twenty (20) staffs were selected per each enterprise selected. The data collected are subjected to the quantitative analysis of descriptive statistics and chi-square technique. Findings of the study indicated that accounting information system has significant effect on the sales growth of SMEs in Lagos Metropolis (value of chi-square is 6.48, and the critical value of chi-square is 5.74 at 5% level of significance and 4 degree of freedom); accounting information system has significant effect on the asset growth of SMEs in Lagos Metropolis (value of chi-square is 9.79, and the critical value of chi-square is 7.59 at 5% level of significance and 5 degree of freedom). The study concludes that accounting information system has significant impact on the sales and asset growth of SMEs in Lagos Metropolis. The study suggests amongst others that, SMEs should improve their accounting system in order to generate quality, reliable and timely accounting information, Owners of SMEs should integrate accounting information system in their decision processes, SMEs should endeavor to consult accountants regularly in order to be able to maintain high and generally acceptable accounting practices, Accounting training programmes for SMEs should be organized by the Lagos State Ministry of Trade, Commerce and Industry for those who do not know the importance of maintaining accounting records to come to grips with it, Government should stipulate the minimum number of books to be kept by all SMEs that meet certain criteria which certifies them to operate in Nigeria, SMEs should ensure that the cost of acquiring AIS does not outweigh the benefits the company would gain from using them.
CHAPTER ONE
INTRODUCTION
1.1 Background to the study
Accounting plays a vital role in the success or failure of contemporary business institutions. Systems are responsible for recording, analyzing, monitoring and evaluating the financial condition of business institutions, preparing documents necessary for tax purposes, providing information support to many other organizational functions, (Amidu, John & Joshua. 2011). In the context of small and medium scale enterprises (SMEs), accounting information is important as it can help the firms to manage their short-term problems in critical areas like costing, expenditure and cash flow, by providing information which will be used to support monitoring and control (Mitchell, Reid & Smith, 2000; Son, Marriot, & Marriot, 2006).
Small and Medium Scale Enterprises are the reasons behind any growing economy. Some of the roles of small and medium scale enterprises include generating employment opportunities, rural development, youth empowerment, immense contribution to national income and growth, spread and development of adaptable technology and regional balanced growth channel (Source *****). These enterprises are faced with diversity of challenges in Nigeria due to numerous domestic and global economic problems and policy inconsistencies. The result is a high mortality rate of the firms (Dasanayaka, Kankanamge & Sardana, 2011). Some of the challenges are internal to the enterprise and they include inadequate working capital, high competition from larger companies, difficulties in sourcing raw materials, low capacity utilization, poor of management strategies, and poor educational background of operators, huge financial problems and reluctance in embracing technology (Tafamel & Idolor, 2008; Osamwonyi and Tafamel, 2010).
Small companies are often established from family business. Mostly, in family business, are manage by family members. However, the workforce can be from non-family members. Therefore, the business environment is different according to the style of management as well as the culture that the family inherited from generations to generations (Peter and Buhalis 2004). SMEs have an important role to play in the development of Nigerian economy. The extent of contribution these business units can make towards the growth and development of Nigeria depend on how successful they are in their operations. The fact that is underlying the success of a business enterprise is the establishment and application of controls by the owners or management in addition to the systematic record keeping of business transactions, which, at the end of the period, keeps the owner well-informed about the performance of the business. (Mbroh, John & Attom, 2011).
The study conducted by Ismail (2009) are the financial management of enterprises. Accounting information is information provided by the accountants and accounting systems. This information is usually presented in financial statements such as the income statement and the statement of financial position. It also includes any financial ratios extracted from these financial statements. Accounting systems are responsible for analyzing and monitoring the financial situation of firms, preparation of documents that are necessary for tax purposes, providing information to support many other organizational functions such as production, marketing, human resource management, and strategic planning. Without such a system it will be very difficult for SMEs to determine performance, identify customer and supplier account balances and forecast future performance of the organization. The primary purpose of an accounting information system (AIS) is the collection and recording of data and information regarding events that have an economic impact upon organizations and the maintenance, processing and communication of such information to internal and external stakeholders for proper decision making (Stefanou, 2006).
