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An Evaluation Of Accounting Information System And Performance Of Small

Scale Enterprises In Kwara State, Nigeria
Fagbemi, Temitope Olamide Ph.D., ACA1 Olaoye, Joshua Adeyemi2

Prior traditional accounting method of manually inputting and recording daily

transactions has become inefficient if small businesses want to remain competitive and
survive. The objective of the study was to find out if accounting information system
influences the performance of small and medium scale enterprise and whether it also aids
access to finance. A survey design was used. A usable sample of one hundred and fifty three
respondents out of a population of one hundred and fifty-four (154) was considered. The
type of data used for this research was the primary data through the administration of
questionnaire. Data was presented by the use of frequency tables and ordered logistic
regressions. The findings from the study revealed that accounting information system
significantly influences the performance of small and medium scale enterprises (LR
statistics = 36.28, p < 0.05). Similarly, the study showed that the adoption of a computerized
accounting information system improves the ability of small scale enterprises to secure
funds from financial institutions (LR statistics = 31.12, p < 0.05). It was concluded that
accounting information systems would significantly influence the performance of small and
medium scale enterprises. Therefore, it was recommended that SMEs that adopt
computerized accounting information system should ensure that the level of
computerization improves in line with current level of advancement in technology.

Keywords: Information System, Performance, Small businesses, Technology, Funding

1
Department of Accounting, University of Ilorin, Nigeria [email protected]
2
Department of Accounting, University of Ilorin, Nigeria

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Introduction information due to its capabilities of

Every business regardless of its size has to analyzing massive amount of data and in
be effectively and successfully managed for producing accurate and timely reports.
it to survive, grow and remain sustainable. A These unique features of computer
lot of businesses are set up yearly around the capabilities have led to the introduction of
globe and in a similar way; many are faced various information systems such as
with different challenges which they are Accounting Information System (AIS),
unable to surmount and thereby Manufacturing Resource Planning (MRP)
discontinued. Small and Medium Scale system, Human Resource (HR) System.
Enterprises (SMEs) are the building blocks Information system technology has
of any growing economy. Some of the roles definitely changed the way businesses are
of small and medium scale enterprises being operated (Elliot, 1992). This system
include employment generation, rural has contributed to increases in business
development, youth empowerment, productions and transactions as firms are
contribution to national income and growth, better positioned to achieving their
spread and development of adaptable objectives. Thus, this enhances business
technology and regional balanced growth activities. More businesses and transactions
channel. These enterprises are faced with implied that there will be more accounting
diversity of problems in Nigeria due to data needed to be recorded and updated.
numerous domestic and global economic Prior traditional accounting method of
problems and policy inconsistencies. The
manually inputting and recording daily
result is a high mortality rate (Dasanayaka, transactions has become inefficient. Errors
Kankanamge & Sardana, 2011; Hessels &
such as wrong data entry, inefficient tasks
Parker, 2013). Some of the problems are performance and massive utilization of
internal to the enterprise and they include
paper product created many problems to
inadequate working capital, stiff competition
business activities and organization’s
from larger companies, difficulties in
performance. These inadequacies have led to
sourcing raw materials, low capacity
the emergence of accounting information
utilization, lack of management strategies,
system. A system that is able to gather,
poor educational background of operators,
analyze and produce reports more efficiently
huge financial problems and reluctance in (Saira, Zariyawati & Annuar, 2010).
embracing technology (see Igbinomwanhia,
2009; Inegbenebor, 2006; Osamwonyi, Aremu and Adeyemi (2011) argued that
2009; Tafamel & Idolor, 2008; Osamwonyi except for statutory demands, Small and
and Tafamel, 2010). medium scale enterprises hardly give serious
thoughts to the process of sound accounting,
The growth of computer technology in
while also noting that the inadequacy and
1950’s had initiated increasing development
ineffectiveness of accounting processes have
in information storing and processing been responsible for untimely collapse of a
(Rashid, Hossain, & Patrick, 2001).
host of them. The circumstances highlighted
Computer technologies increase the use of above have persisted due to poor generation

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and use of accounting information in required to serve and the policies which
Nigeria. The absence of accounting govern the SME sector.
information system in most small and Three parameters generally applied for
medium enterprises in Nigeria tends to
classifying SMEs by most countries,
compound their challenges. The research
separately or in combination are: capital
question for consideration therefore was
investment on plant and machinery, number
whether relationship exist between AIS and
of workers employed and volume of
performance; AIS and size of the
production or turnover of business (Aremu
organization as well as whether AIS
& Adeyemi, 2011). For example, in Ghana;
adoption influence SME’s access to credit.
Steel and Webster (1990), Osei Baah-
More specifically, propositions were made
Nuakah, Tutu and Sowa (1993) described
in this direction. SME in terms of employment cut off point
Conceptual Review of 30 employees. Osei et al. however made
further divisions of SMEs into three
The contribution of small businesses to the
categories: (i) micro -employing less than 6
business environment is quite enormous
people; (ii) very small, those employing 6-9
(Holmes & Nicholls, 1988; Mitchell, Reid &
people; (iii) small -between 10 and 29
Smith, 1998). In recent years, as part of the
employees. Egypt defined SMEs as having
economic reforms in Nigeria, there has been
increased support for small and medium more than 5 and fewer than 50 employees.
Australian Bureau of Statistics (2001)
scale enterprises which has the potential of
reducing unemployment and a catalyst for defined SMEs as a business (excluding
agriculture) that employs no more than 200
rapid and substantial industrial development
(Dasanayaka, 2009; Hyz, 2011). SMEs are people.
heterogeneous in nature with countries not In Nigeria, Adigwe (2012) also defined
having the same definition for classifying SMEs by employment and assets of the
their SME sector. The definition in use company (excluding land and buildings) as
depend on the purpose those definitions are follows-
Size Category Employment Assets (₦ million, excluding land and
building)
Micro Enterprises Not more than 10 Not more than 1.5
Small Enterprises 11-100 Not more than 50
Medium Enterprises 101-300 Not more than 250.
Furthermore, agencies of government in maximum asset base of N200, 000,000 (200
Nigeria have also defined SMEs. For million Naira) excluding land and working
example, the Central Bank of Nigeria (CBN) capital with the number of staff employed
and the Small and Medium Enterprises by the enterprise expected to be not less than
Equity Investment Scheme (SMEEIS) 10 and not more than 300. National
defined SMEs as any enterprise with a Association of Small and Medium Scale

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Enterprises (NASME) defined a small scale fulfillment of the economic goals of the firm
enterprise as a business with less than 50 (Murphy, Trailer & Hill, 1996). It has been
people employed by the enterprise and with widely used to measure business
an annual turnover of N100,000,000 (100 performance in both SMEs and larger firms.
million Naira). NASME further defined a Kaplan & Atkinson (1998), Lau & Sholihin
medium scale enterprise as a business with (2005) felt that a great deal of accounting
less than 100 employees and with an annual literature recognizes the inherent advantages
turnover of N500, 000,000 (500 million of financial measures. They argued that
Naira). National Council on Industry defined financial measures might be beneficial
SMEs as follows: Small-Scale Industry is an because they are objective and certain to
industry with a labour size of 11-100 provide a summary view of the success of
workers or a total cost of not more than N50 the organization’s performance and
million, including working capital but operating tactics. Bento and White (2001)
excluding cost of land. The importance of argued that sales revenue, which is less
having a working definition of SMEs in an subject to manipulation for tax reporting
economy is that it enables government purposes and is not affected by the historical
agencies, banks and other organizations who cost of input, is one of appropriate measures
relate with SMEs have a criteria for used to reflect financial performance of
determining enterprises that fall under SMEs. As for return on investment (ROI),
SMEs. this is also a commonly used measure which
effectively reflects the manager’s ability to
On the other hand, performance is often
viewed as a measure of the success of an improve profit and increase sales from a
given level of investment (Atkinson,
organization which could either be in
quantitative or qualitative in nature. Pfeffer Banker, Kaplan & Young, 2001).
and Salancik (1978) defined performance as Apart from financial measures, extant
a company’s ability to create action and literature also suggest non-financial
acceptable results through variables that can measures (also called operational
be measured. Alasadi and Abdelrahim performance measures), such as budgetary
(2007) opined that the performance of SMEs performance and managerial performance,
is viewed from the satisfaction of the which are defined as a broader
owner/manager in respect of variables such conceptualization of organizational
as profit, turnover and business performance (see Kaplan, 1983; Hofer &
development. This also sheds light on both Sandberg, 1987). Performance management
the qualitative and quantitative interest of literature (Lynch & Cross, 1991; Kaplan &
managers/owners on two types of Norton, 2001; Otley, 2003) suggests that,
performances - financial and non-financial when monitoring their firm performance,
measures of performance. managers tend to place relatively less
Financial performance is generally defined emphasis on traditional financial measures
of performance such as return on investment
as the use of outcome-based financial
indicators that are assumed to reflect the or net profit. This is usually explained in

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terms of traditional performance measures transactions of a business or organization.

(the accounting-based measures or financial These systems combine the methodologies,
measures), which is unable to satisfactorily controls and accounting techniques with the
reflect firm performance affected by today’s use of technology to track transactions,
changing business environments (Hoque, provide internal and external reporting data,
2004). financial statements and trend analysis
capabilities to affect an organizational
Similarly, McKiernan & Morris (1994)
performance (Urquia, Perez & Munoz,
criticized the fact that the measures of
2011). Nicolau (2000) also described
financial performance cannot accurately
accounting information system as a
measure organizational effectiveness or total
computer based system that increases
performance. Stemming from these
concerns, the academic literature (Otley, control and enhances cooperation in the
organization. Although information
1999; Van & Wijn, 2002) largely supports
claims that since non-financial performance technology was within reach of only large
companies a few years ago, SMEs are
measures focus on a firm’s long term
success factors such as customer gradually taking the advantage that this
portends given the need to improve on their
satisfaction, internal business process
efficiency and innovation, they can best competitive advantage.
Stefanou (2006) noted that the main reason
capture the overall performance of
organization. Therefore, a multi-dimension for an accounting information system (AIS)
is the collection and recording of data and
system of performance measures combining
financial performance, non-financial information regarding events that have an
economic impact upon organizations and the
performance and managerial performance is
used in this study to reflect the overall maintenance, processing and communication
of such information to both internal and
performance of SMEs.
external stakeholders. When organizations
Accounting Information System adopt e-accounting, they usually discover
Accounting could be classified into three that even though computerized accounting
components namely information system, systems handle financial data efficiently,
language of business and source of financial their true value is that they are able to
information (Wilkinson, 1993). Information generate immediate reports regarding the
is often described as valuable data organization (Boame, Solace & Issaka,
processing that provides a basis for making 2014).
decisions, taking actions and fulfilling legal Beke (2010) suggested that there is an
obligations while “system” is an integrated improvement in accounting quality and
entity, where the framework is focused on a decision making associated with using AIS.
set of objectives (Bhatt, 2001; Thomas and Quality decisions occur since AIS records
Klemer, 1995). Therefore, accounting ensure easy access to information records
information system (AIS) is described as a that are properly kept. Beke further argued
system used to record the financial that AIS tend to have standardized forms of

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data analysis provided by information Chenhall & Morris (1986), Gul & Chia
system which is in support of Pollock and (1994) examined the contingent relationship
Cornford (2004) who argued that AIS also between internal and external environmental
provide an opportunity to update procedures factors such as organizational
and align them with perceived examples of interdependence, decentralization and
best practice. Other benefits accruing from perceived environmental uncertainty) and
AIS include provision of real-time choice of an AIS (information scope,
information for strategic decision making timeliness, aggregation and integration). The
(Spathis & Constantinides, 2003), improve general conclusion from this is that greater
strategic effort of organizations (Salehi, organizational interdependence,
Restami & Mogadum, 2010) and improve decentralization and perceived
data sharing and integrity (Moscove, Simkin environmental uncertainty are factors
and Bagranott 1999). associated with either a greater perceived
need for more sophisticated AIS or higher
Contingency Theory and the Design of
firm’s performance with more sophisticated
Accounting Information System
Contingency theory suggests that accounting AIS. The present study adds to this body of
literature by examining AIS within the
information system should be designed in a
flexible manner so as to consider the context of SMEs.
environment and organizational structure of Melanie, Steve and Chris (2011) examined
a business entity. Extant literature has the role of accounting information in the
examined different forms of AIS management of winery SMEs in Australia.
combination with other variables such as The study concluded that accounting
technology, structure, and environment information play an important role in the
(Chenhall and Morris, 1986; Gordon and management of SMEs with practical
Narayanan, 1984; Kim, 1988; Mia and relevance to the Australian wine industry
Chenhall, 1994). These various because industry level stakeholders are
combinations of AIS have provided useful engaged in initiatives to support and develop
directions for AIS research, although such the business management practices of
research directions have majorly not been SMEs.
directed towards SMEs. AIS also need to be
Kwame, Emmanuel, Eric and Oduro (2014)
adapting to the specific decisions being
explored the accounting practices of SMEs
considered. In other words, AIS needs to be
in Ghana using the Sunyani Municipality as
designed within an adaptive framework
a case study. The study uses stratified
(Lawrence and Danny, 1978). Other early
sampling and snowballing techniques to
contingency research summarized by Otley
gather data from SME owner/managers of
(1980) found no universally appropriate
various sectors in the municipality. The
management accounting system applicable
research findings are based on a survey of
to all organizations in all circumstances. The the accounting record practices of one
techniques or system is inherently dependent
hundred and four SMEs in the Municipality.
on specific circumstances. For example, The study revealed that a majority of SMEs

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do not keep complete accounting records as Saira et al. (2010) examined information
a result of numerous factors such as lack of system and firm performance of Malaysian
book keeping skills on the part of SMEs using panel data. Questionnaires were
owners/managers and the high cost involved also sent out to various SMEs. Financial
in adopting a good accounting system. statement data for a five years period
commencing from year 2004-2008 were
Urquia et al. (2011) also investigated the
gathered. Sample for the study comprised of
impact of Accounting Information System
205 firm-years. Regression was used for
(AIS) on performance measures in Spanish
data analysis. Results from the research
SMEs and found out that the use of AIS is
revealed that SMEs adopting AIS improve
crucial in order to broaden the market,
significantly in performance compared to
enhance management of selling costs and
improve firms’ management of relations non adopters.
with customers and suppliers. However, to Ohachosim, Onwuchekwa and Ifeanyi
what extent is this investment in specific (2012) evaluated the extent accounting
technology for the economic financial area information can be used to ameliorate the
related to performance and ease of access to financial challenges of SMEs in Nigeria.
finance is a question yet to be sufficiently Structured questionnaire was used to collect
explored. data from a sample of SMEs in Nigeria.
Gwangwava, Faitaira & Mabvure (2012) Ordinary Least Square (OLS) was used to
analyse the data collected. The result
investigated factors that influence adoption
of accounting information system by small showed that SMEs in Nigeria have poor
accounting system. It was also found that
and medium enterprises using the
descriptive survey method. A sample size of SMEs’ access to finance depends largely on
the quality of accounting information they
72 SMEs was chosen from a population of
100 SMEs using the stratified sampling can generate which is determined by their
accounting practices.
followed and random sampling techniques
with questionnaire and interview methods Olatunji (2013) examined the impact of
for data collection. The research findings sound accounting system on corporate
indicated that cost benefit analysis, lack of performance of small and medium scale
government support, financial constraints, enterprises using a survey research with
complexity of AISs as well as reluctance are analysis of variance (ANOVA) as the
weak predictors of non-adoption of AIS by statistical tool. The results of the study
SMEs. Findings also revealed that AISs is showed that adoption of sound accounting
not associated with company size. The study system enhances performance of SMEs. The
recommended government intervention study recommended that accounting
through provision of finance, subsidies as professionals should customize accounting
well as collateral security to SMEs for easy systems and audits to the need and capacity
adoption. of these categories of business, provide
accountancy services for a fee, and

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adherence of small business operators to Technique given the ordinal nature of the
internal controls. dataset that were collected.
Adebayo, Idowu, Yusuf & Bolarinwa (2013)
In order to evaluate the influence of
also examined the impact of accounting
accounting information system on
information system as an aid to decision
performance of SMEs, the study used the
making in food and beverages companies in
following model for estimation.
Nigeria. The major source of data for this
SMEPi = f (AIS1i, AIS2i) (1a)
research was primary data through
SMEPi = α + β1AIS1i + β2AIS2i + ɛi
administration of questionnaire. Regression
(1b)
analysis and Karl Pearson’s correlation was
where: SMEPi = SMEs performance,
used for data analysis. The findings showed
that accounting information system is an AIS1i = Computerized accounting
information systems,
indispensable tool in decision making in
today’s turbulent world. Organizations were AIS2i = Effective Inventory control system,
however advised to invest on information εI = Random error terms
technology tools so as to improve their β1- β2 = Parameters to be estimated
efficiency and overall performance. Similarly, in examining whether or not
organizational size determine the adoption
of accounting information, the model below
Methods was constructed for analysis.
The research design employed for this AISi = f (SMESize1i, SMESize2i) (2a)
research report is descriptive survey design. AISi = α + β1SMESize1i + β2
The choice of this design was made based SMESize2i + ɛi (2b)
on the fact that in this study, the researcher where: AISi = Accounting information
is interested in obtaining information from system
the respondents using questionnaire. The SMESize1i = Size of the SMEs based on
population of the study consisted of one employees
hundred and fifty four (154) SMEs in Kwara SMESize2i = Size of the SMEs in terms of
State (as obtained from the Kwara State capital base
Ministry of Industry) from which sample is εi = Random error terms
selected. This also formed the selected β1- β2 = Parameters to be estimated
sample for the study. For the purpose of this
Furthermore, to find out if adoption of
study, data were gathered through the use of accounting information system provides the
questionnaire and were analyzed using both SMEs with easy access to credit facilities,
descriptive and inferential statistics. model 3 was constructed as follows.
However, only one hundred and fifty three
EACFi = f (AIS1i, AIS2i) (3a)
copies of the questionnaire were usable. The EACFi = α + β1AIS1i + β2AIS2i + ɛi
descriptive statistics used in this study (3b)
include the frequencies and percentage. The where: EACFi = Easy access to credit
models constructed in equations 1 – 3 were
facilities
estimated using Ordered Logistic Regression

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AIS1i = Computerised accounting X1, X2 = Explanatory variables

information system
AIS2i = Efficient inventory control Results
system As shown in Table 1, the number of male
εi = Random error terms and female that expressed their opinions on
β1- β2 = Parameters to be estimated SMEs’ performance and the adoption of
The general probability function for the accounting information are almost equal.
above model is expressed as follows: Therefore, the study is not gender biased.
Also, the Table reveals that in terms of
education, the respondents that participated
in the study have requisite qualifications
where: thereby putting in a good position to provide
Li = Response variable, Logit, Log of the appropriate responses needed for the study.
odds that the event occurs Above all, people with vast years of work
Pr =Probability of event occurring, experience participated more in the study.
j = Ordinal response ranging from 1, 2, …j This adds more confidence in the responses
e = exponential function obtained for the research study.

Table 1: Demographic Variables

Variables Frequency Percent Cum. Percent
Sex Distribution
Female 81 52.9 52.9
Male 72 47.1 100.0
Total 153 100.0
Edu. Qualification
SSCE 21 13.7 13.7
SSCE/ND 33 21.6 35.3
BSc. /B.A.HND 60 39.2 74.5
MSc./Above 39 25.5 100.0
Total 153 100.0

Work Experience
1-5yrs 63 41.2 41.2
6-10yrs 60 39.2 80.4
11-20yrs 30 19.6 100.0
Total 153 100.0

Cost of AIS Adoption

Low 13 8.5 8.5
Average 42 27.5 36.0
Very High 98 64.0 100.0
Total 153 100.0

Source: Field Survey, 2015

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AIS Adoption and SMEs’ Performance the performance of small and medium
The coefficient of AIS1 in Table 2 shows enterprise in Ilorin Metropolis, Kwara State.
that there is a positive relationship between This implies that as the extent to which
SMEs’ performance and the adoption of SMEs adopt accounting information system
computerized accounting information increases, the higher the likelihood that
system. Similarly, it is revealed that there SMEs’ performance will improve. These
exists a positive relationship between SMEs’ findings are in agreement with the previous
performance and effective inventory control related studies conducted by Olatunji
system. Both coefficients are individually (2013), Urquia et. al. (2011) Adebayo,
statistically significant at 1%. Overall, LR Idowu, Yusuf and Bolarinwa (2013) and
statistic of 36.27 suggests that accounting Saira et. al (2010).
information system has significant effect on

Table 2: Influence of Accounting Information (AIS) on SMEs’ Performance

Variable Coefficient Std. Error z-Statistic Prob.

AIS1 1.375134 0.505591 2.719853 0.0065
AIS2 1.249620 0.454326 2.750492 0.0060

Limit Points

LIMIT_2:C(3) 3.846397 1.308007 2.940656 0.0033

LIMIT_3:C(4) 6.193614 1.442028 4.295073 0.0000
LIMIT_4:C(5) 9.425577 1.852325 5.088510 0.0000

Pseudo R-squared 0.286409 Akaike info criterion 1.968257

Schwarz criterion 2.157652 Log likelihood -45.19055
Hannan-Quinn criter. 2.040630 Restr. log likelihood -63.32839
LR statistic 36.27568 Avg. log likelihood -0.886089
Prob(LR statistic) 0.000000
Source: Field Survey, 2015

AIS Adoption and SMEs’ Size simultaneously equal to zero could not be
In Table 3, the coefficient of SMESize1 rejected. Therefore, we can infer can that the
establishes that the SMEs size based on size of small and medium sized enterprise
employees and adoption of accounting determine to some extent the adoption of
information system are positively correlated. accounting information system. This is
Similarly, SMEs’ size in terms of capital affirmed by log likelihood ratio statistic of
base has a direct association with the 14.62. This is at variance with the related
adoption of accounting information system. study finding reported by Gwangwava,
While that of employee is significant at 5%, Faitaira and Mabvure (2012). Perhaps, this
the one in terms of capital base it is not is as a result of the multiplicity of capital
statistically significant. Above, the null base as criteria for classification of SMEs.
hypothesis that all the coefficients are

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Table 3: SMEs’ Size and Adoption of Accounting Information

Number of ordered indicator values: 4

Variable Coefficient Std. Error z-Statistic Prob.

SMESize1 1.088018 0.457624 2.377537 0.0174
SMESize2 0.298079 0.618525 0.481920 0.6299

Limit Points

LIMIT_2:C(3) -0.042371 0.840358 -0.050420 0.9598

LIMIT_3:C(4) 2.084956 0.835572 2.495243 0.0126
LIMIT_4:C(5) 4.156969 0.991230 4.193750 0.0000

Pseudo R-squared 0.112932 Akaike info criterion 2.449307

Schwarz criterion 2.638701 Log likelihood -57.45732
Hannan-Quinn criter. 2.521680 Restr. log likelihood -64.77214
LR statistic 14.62964 Avg. log likelihood -1.126614
Prob(LR statistic) 0.000666

Source: Field Survey, 2015

AIS Adoption and SMEs’ Access to Credit accounting information system. Statistically,
Table 4 shows the estimated likelihood of both values are highly significant at 5%. On
SMEs that adopts accounting information the whole, since we could not reject the null
system having easy access to credit hypothesis of all coefficients being equal to
facilities. The two coefficients individually zero using LR statistics of 31. 12, we affirm
suggest an increase in the odds in favour of that adoption of AIS by SMEs eases their
easy access to credit if the SMEs adopt access to credit facilities.

Table 4: SMEs’ Access to Credit and Use of Accounting Information

Method: ML - Ordered Logit (Quadratic hill climbing)
Number of ordered indicator values: 4

Variable Coefficient Std. Error z-Statistic Prob.

AIS1 1.156582 0.489148 2.364482 0.0181

AIS2 1.165931 0.463365 2.516223 0.0119

Limit Points

LIMIT_2:C(3) 2.325639 1.274781 1.824344 0.0681

LIMIT_3:C(4) 6.148678 1.438130 4.275469 0.0000
LIMIT_4:C(5) 8.364868 1.671848 5.003367 0.0000

Pseudo R-squared 0.250196 Akaike info criterion 2.024625

Schwarz criterion 2.214020 Log likelihood -46.62793
Hannan-Quinn criter. 2.096998 Restr. log likelihood -62.18681

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LR statistic 31.11775 Avg. log likelihood -0.914273

Prob(LR statistic) 0.000000

Source: Field Survey, 2015

Conclusion performance of small and medium scale

enterprises.
This study revealed that there is a positive
relationship between SMEs’ performance Based on the findings of this research, it is
and the adoption of accounting information recommended that the level of
system. The implementation of accounting computerization of SMEs activities should
information system could lead to better be improved in line with the current level of
decision making and effective inventory advancement in technology for SMEs that
control system as shown in Table 2. It was already adopted accounting information
also found that the size of the organisation to system. Similarly, SMEs should ensure that
some extent, determines the adoption of the cost of acquiring AIS does not outweigh
accounting information system adopted by the benefits the company would gain from
them (see Table 3). The study revealed a using them given the perceived cost of AIS
positive relationship between the adoption adoption. Further research direction could be
of accounting information system and easier geared towards the analysis of the
access to credit, that is, the adoption of effectiveness of accounting information
accounting information system by small and system as a part of management information
medium scale enterprises would ease their systems and other contingency factors that
access to credit facilities (see Table 4). could affect AIS adoption such as
Furthermore it was found that the adoption competency of personnel and level of
of AIS is expensive and this may be the enterprise innovation.
reason why some of the SMEs fail to adopt
them as reflected in Table 1. Implications of the Study
With reference to the result of the The potency of the finding is premised on
hypotheses stated in the earlier part of this the research settings. On one hand, the
research work, the null hypotheses were findings of this study hold prospects of
rejected while the alternate hypotheses were enhancing the performance of small and
medium scale enterprises with additional
accepted. Thus it is crucial for SMEs to
frontiers for such businesses to expand their
adopt information systems, specifically
operation. On the other hand, by bringing to
accounting information systems, for their
fore the need for small businesses to
business operations so as to be able to face
embrace technology, the study places the
competitive pressure not only within the
issue of performance and access to finance
SMEs industries but also from larger firms.
as a prime area in staying competitive
It can be concluded that accounting
among their peers.
information systems would significantly
The study also proves that though
influence the performance of small and
contingency factors; computerized
medium scale enterprises. Also, accounting
information systems bear relevance to the accounting information systems and
size and need of small and medium scale effective inventory control systems; the
enterprises. Lastly, it can as well be performance of small business entities are
concluded that accounting information improved upon thereby surmounting the
system would significantly influence the odds associated with obtaining funds needed

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for expansion purpose. The study also has http://www.abs.gov.au/ausstats/[email protected]

implications for prompting and sustaining a f/mf/1321.0
robust contingency based tradition in Beke, J. (2010). Review of international
management accounting research in Nigeria accounting information systems.
and beyond. It may even stimulate the Journal of Accounting and Taxation.
search into developing or including more 2(2), 139 - 161.
contextual variables in understanding the Bento, A. M., & White, L. F. (2001).
relationship between AIS and performance Organizational form, performance and
of small scale enterprises. information cost in small business.
Journal of Applied Business Research,
17(4)
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