Accounting information system and the growth of small and medium enterprises in the Kumasi metropolis

Abstract

The study examined the accounting information system and the growth of small and medium scale enterprises (a study of SME’s in Kumasi metropolis). Four theories were used in the research to have a wide scope in the study, namely; the Contingency Theory and the Design of Accounting Information System and the Technology Acceptance model (TAM), the Expectation Confirmation Theory (ECT), and the Sales Growth Theory. The sample of the study comprised ten SME’s in Kumasi Metropolis, five from the Central Business District (CBD) of Kumasi and five from Suburbs of the city. 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 showed that accounting information system has significant effect on the sales growth of SMEs in Kumasi Metropolis (value of chi-square is 11.55, and the critical value of chi-square is 9.49 at 5% level of significance and 4 degree of freedom); accounting information system has significant effect on the profit growth of SMEs in Kumasi Metropolis (value of chi-square is 10.05, and the critical value of chi-square is 9.49 at 5% level of significance and 5 degree of freedom;. accounting information system has significant effect on the asset growth of SMEs in Kumasi Metropolis (value of chi-square is 14.92, and the critical value of chi-square is 11.07 at 5% level of significance and 5 degree of freedom; accounting information system has significant effect on the Net cash flow growth of SMEs in Kumasi Metropolis (value of chi-square is 10.52, and the critical value of chi-square is 9.49 at 5% level of significance and 5 degree of freedom. The study concludes that accounting information system has significant impact on the sales, profit, asset and net cash flow growth of SMEs in Kumasi 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 Ministry of Trade 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 Ghana, SMEs should ensure that the cost of acquiring AIS does not outweigh the benefits the company would gain from using them.