The Impact of Company Accounts on Accounting Information Generation for Decision Making of Small and Medium Enterprises in Nigeria

Abstract

Small and medium scale enterprises are gaining widespread acceptance as viable drivers of economic growth. However, several of these enterprises demise without fulfilling expectations due to poor management arising from weak accounting structure and information, and the studies of the impact of company accounts on accounting information generation are very few and not fully explored in the literature especially in Nigeria. This study therefore, examines the impact of company account on the generation of accounting information for decision making of small and medium enterprises (SMEs) in Nigeria. A survey research design approach was adopted through the administration of questionnaire to obtain primary data from respondents. The sample size of 151 respon-dents was drawn from 15 selected SMEs in Osun State. A stratified sampling technique was used to draw the sample. The data collected was analyzed using Linear Multiple Regression mode. From the results obtained, there is strong relationship between the company accounts and accounting information as indicated by the correlation coefficient of 0.955, 0.958, 0.962 and the p-value is less than 1% significant level (0.00<0.01), therefore null hypotheses are rejected. That means company accounts play significant role in generating accounting information for decision making of business organizations in Nigeria. This study finds that some SMEs operators in Osun State hired unskilled accounting personnel which make their accounting information unreliable and inadequate for effective decision making and very difficult to measure the performances of their business. This study recommends that government should promulgate new additional company law that will extend mandatory annual statutory preparation, disclosure and publication of annual accounts and reports of limited liability companies to other uncovered small and medium enterprises in Nigeria.

Keywords: Accounting information, Company accounts, Small and Medium Enterprises.

DOI: 10.7176/RJFA/11-11-04

Publication date:June 30th 2020