Accounting and Reporting Practice of Micro and Small Enterprises in West Oromia Region, Ethiopia

Abstract

Ethiopian MSEs are at early stage of development and face various constraints. One of the most crucial problems is related to proper record keeping and reporting. In order to promote MSEs as engines of growth, it is essential to understand the bottlenecks surrounding MSEs' accounting practice. The main objective of this study is therefore to examine the financial record keeping and reporting practices of MSEs in west Oromia sub-region. 200 sample MSEs selected from three towns in west Oromia region are used for this study. The finding indicated that the majority of MSEs did not keep regular accounting record and prepare periodic financial report. The main reasons mentioned by the respondents includes: smallness of the business, expensiveness of qualified accountants and lack of awareness about the benefits of accounting. The researchers recommend that concerned institutions such as MSEs agency and TVET colleges should arrange training for MSEs Operators.

Keywords: Record keeping, Micro and Small Enterprises, Financial reporting.