Role of Accounting Information on Small and Medium Scale Business in Nigeria
CHAPTER ONE
OBJECTIVES OF THE STUDY
The major objective aim is to examine the role of accounting information on small scale business productivity and performance.
Other specific objectives aimed to be achieved are:
- To examine the importance of accounting information and basic accounting procedures in small-and medium scale enterprises.
- To determine the extent to which accounting information and basic accounting procedures have been implemented and applied in small-and medium scale enterprises.
- To investigate the types of accounting records being kept and maintained by small-and medium scale enterprises.
- To ascertain the extent to which accounting information is being used as a financial tool for measuring financial performance of SMEs.
- Analyze the relationship between accounting information & small scale firm performance.
- To analyze the completeness of accounting records being kept by SMEs as a source of information for economic and financial decision making.
- Determine the major barriers to accessing to efficient accounting information.
CHAPTER TWO
REVIEW OF LITERATURE
INTRODUCTION
Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
Precisely, the chapter will be considered in three sub-headings:
- Conceptual Framework
- Theoretical Framework
- Empirical framework
CONCEPTUAL FRAMEWORK
Concept Of Accounting
Accounting is the collection and aggregation of information for decision makers – including managers, investors, regulators, lenders, and the public. (Ronen 2000).
Accounting systems affect behavior and management and have affects across departments, organizations, and even countries. Information contained within an accounting system has the power to influence actions. Accounting information systems are particularly strong behavioral drivers within an organization – where profits and the bottom line are daily concerns. In order for environmental concerns to be important criteria in everyday business management decisions, they need to be summarized within the accounting systems of the organization.
Accounting Information
The primary objective of accounting is to provide information that is useful for decision-making purposes. The final product of accounting information is the decision that is enhanced by the use of that information, whether the decision is made by owners, management, creditors, governmental regulatory bodies, labor unions, or the many other groups that have an interest in the financial performance of a company.
Accounting information is defined as the information used to prepare financial statements which report the results and financial position of a business to the decision makers. (Dung 2010),
Accounting information is seen as a set of information which describes an account for a utility. Accounting information can be classified into two categories: financial accounting or public information and managerial accounting or private information. Financial accounting includes information circulated to parties that are not part of the enterprise proper, such as stockholders, creditors, customers, suppliers, regulatory commissions, financial analysts, and trade associations. Such information relates to the financial position, liquidity (that is, ability to convert to cash), and profitability of an enterprise. (Hendrick 2000). To be able to obtain accounting information that is used for decision making, it has a process it usually undergoes.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of thirty-six (36) questionnaires were administered to respondents of which only thirty (30) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 30 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
SUMMARY
In this study, our focus was on therole of accounting information on small and medium scale business in Nigeria using selected small scale business in Akure South, Ondo state as a case study. The study specifically was aimed at highlighting the importance of accounting information and basic accounting procedures in small-and medium scale enterprises, determine the extent to which accounting information and basic accounting procedures have been implemented and applied in small-and medium scale enterprises, investigate the types of accounting records being kept and maintained by small-and medium scale enterprises, ascertain the extent to which accounting information is being used as a financial tool for measuring financial performance of SMEs, analyze the relationship between accounting information & small scale firm performance, analyze the completeness of accounting records being kept by SMEs as a source of information for economic and financial decision making and determine the major barriers to accessing to efficient accounting information. A total of 30 responses were validated from the enrolled participants where all respondent are drawn from owners of the small scale business.
CONCLUSION
Based on the finding of this study, the following conclusions were made:
- The importance of accounting information and basic accounting procedures in small-and medium scale enterprises includes:
- It gives background picture which helps organizational structure
- It helps to make sound decisions
- It is useful for financial management planning and control
- It helps to avoid business failure
- Accounting information and basic accounting procedures is implemented and applied in SMEs.
- The types of accounting records being kept and maintained by small-and medium scale enterprises includes:
- Transactions records
- General Ledgers
- Trial BalancesDeposit information (cash and credit sales).
- Accounting information is being used as a financial tool for measuring financial performance of SMEs.
- There is a relationship between accounting information & small scale firm performance
- The completeness of accounting records being kept by SMEs as a source of information for economic and financial decision making is very efficient.
- There are barriers to accessing to efficient accounting information by SMEs.
RECOMMENDATION
Based on the responses obtained, the researcher proffers the following recommendations:
That those saddled with the responsibility of nurturing as well as revamping SMEs in Nigeria should task SMEs to adopt proper accounting practice and rescind from encouraging SMEs with credit facilities and other products alike without appropriate books of records of account performance and information system.
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