Accounting Information Systems and Financial Performance of Small and Medium Enterprises in Mombasa County, Kenya
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Date
2023
Authors
Kirigha, Francisca Wanjala
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Manually entering and documenting everyday business transactions has become
impractical; organisations have realised the usefulness of adopting accounting
information systems to improve their performance. An accounting information system
is a data management and processing system that provides managers with the
information they need to plan, manage and run a business. The study aimed to examine
the effect of accounting information systems on the financial performance of small and
medium enterprises in Mombasa County, Kenya. The study's objectives were to see
how record-keeping systems, financial reporting systems, budget control systems, and
cash management systems affected the financial performance of small and medium
enterprises in Mombasa County, Kenya. The Technology Acceptance Model, Agency
Theory and Decomposed Theory of Planned Behaviour were used to drive the study.
This study adopted a descriptive research design and targeted 1640 small and medium
enterprises located in Mombasa central business district that have been in operation for
more than five years. 268 small and medium enterprises managers/owners were chosen
using stratified random sampling. Data was gathered via questionnaires. A pilot test
was conducted to ensure the tool’s validity and reliability. Statistical Packages for the
Social Sciences version 24 was used to analyse data using descriptive analysis and
inferential statistics. Ethics were followed before, during and after the study was
completed. The study concluded that there is a strong significant relationship between
record-keeping systems and financial performance of small and medium enterprises in
Mombasa County, Kenya. The study also concluded that a strong significant
relationship exists between financial reporting systems and financial performance of
small and medium enterprises in Mombasa County, Kenya. The study went further to
conclude that a strong significant relationship exists between budgetary control systems
and financial performance and finally a strong significant relationship exists between
cash management systems and financial performance of small and medium enterprises
in Mombasa County, Kenya. As a result of the clear relationships established between
variables the study was able to conclude that a clear relationship exists between
accounting information systems and financial performance of small and medium
enterprises in Mombasa County, Kenya. The study recommends the Government to
develop policies and guidelines that will encourage small and medium enterprises to
adopt accounting information systems, as well as Institute of Certified Public
Accountants of Kenya to offer free consultation services to small and medium
enterprises on choosing appropriate accounting systems, financial management and
reporting.
Description
A Research Proposal Submitted in Partial Fulfillment of the Requirements for the Award of Degree in Master of Business Administration in Accounting, Kenyatta University, November, 2022
Keywords
Accounting Information Systems, Financial Performance, Small and Medium Enterprises, Mombasa County, Kenya