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BY
MAY, 2015
BY
FACULTY
OF
BUSINESS
ADMINISTRATION,
MAY 2015
ii
DECLARATION
We hereby declare that this submission is our own work towards BBA degree
and that, to the best of our knowledge, it contains no material previously
published by another person nor material which has been accepted for award
of any other degree of the University, except where due acknowledgement has
been made in the text.
......................................
DATE
..................................................
MABEL ANNUM AYERKI DEDE
(BBAA/ET/ 121479)
...........................................
DATE
...................................................
MAWUNU KAFUI BENEDICTA
(BBAA/ET/121614)
.............................................
DATE
.................................................
JOSEPH ADJEI TETE
(BBAA/ET/113866)
.........................................
DATE
iii
CERTIFICATION
I hereby certify that the preparation and presentation of this long essay were
supervised in accordance with the guidelines on supervision of long essay laid
down by the Methodist University College Ghana.
...............................................
...........................................
WILLIAM OFFEI-MENSAH
(SUPERVISOR)
DATE
iv
DEDICATION
ACKNOWLEDGEMENT
vi
Table of Contents
DECLARATION....................................................................iii
CERTIFICATION..................................................................iv
DEDICATION.......................................................................v
ACKNOWLEDGEMENT..........................................................vi
TABLE OF CONTENTS..........................................................vii
LIST OF TABLES AND FIGURES.................................................x
LIST OF ABBREVATIONS AND ACRONYMS..................................xi
ABSTRACT........................................................................xii
CHAPTER ONE.................................................................................... 1
INTRODUCTION.................................................................................. 1
1.0 Background to the Study......................................................................1
1.2
1.3
1.4
Research Questions.......................................................................6
1.5
Research Hypotheses.....................................................................7
1.6
1.7
1.8
Definitions of Terms......................................................................9
CHAPTER TWO.................................................................................. 11
LITERATURE REVIEW........................................................................11
2.1
Introduction............................................................................... 11
2.2
2.3
2.4
2.5
Empirical Review......................................................................32
2.5.1
The Role of Computerised accounting information on the Improvement
of the Performance of Small and Medium Enterprises in Ghana.....................34
2.5.2 The Role of Computerised accounting information in Expansion of SMEs.38
vii
2.6
2.7
2.8
CHAPTER THREE............................................................................... 46
RESEARCH METHODOLOGY..............................................................46
3.0 Introduction................................................................................... 46
3.1 Research Design..............................................................................46
3.2 Sample Selection and Design..............................................................46
3.3 Research Instrument.........................................................................47
3.4 Validity and Reliability......................................................................48
3.5
Dependent Variable...............................................................50
3.5.3
Control Variables..................................................................51
3.6
3.7
3.8
3.9
3.10
CHAPTER FOUR................................................................................ 57
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF RESULTS..........57
4.0
Introduction............................................................................... 57
4.1
Data Presentation........................................................................57
4.3
Descriptive Statistical...................................................................61
4.4
4.5
Regression Results......................................................................63
4.6
CHAPTER FIVE.................................................................................. 76
SUMMARY, CONCLUSION AND RECOMMENDATIONS..........................76
viii
5.0 Introduction................................................................................... 76
5.1
Summary of Findings...................................................................76
5.2
Conclusion................................................................................ 77
5.3
Recommendation........................................................................78
5.4
REFERENCES...................................................................................81
ix
............................58
............................. ....59
..........................
....60
................................................................. 60
...... 61
.............................................62
.........................................65
...............................66
...............................67
..................................................69
.....................................70
....................68
...................71
..................72
nation's
Organisation
xi
Industrial
Development
ABSTRACT
The dynamic role of small and medium scale enterprises (SMEs) in developing
countries have been highly emphasised. These enterprises have been identified
as the means through which the rapid industrialisation and other
developmental goals of these countries can be realised. This study was
embarked on to
various
as rate of consultation of
up to
date accounting
accounting
diversification
information
when
embarking
on
expansion
or
xii
CHAPTER ONE
INTRODUCTION
1.0 Background to the Study
The overriding importance of small and medium enterprises to the Ghanaian
economy has made it imperative for researchers to direct much attention and
effort towards the identification of possible ways through which a sound Small
and Medium Enterprise (SME) sub-sector will be established in Ghana, as
well the communication of such feasible solution to stakeholders and policy
makers.
xiii
Every business has numerous processes; some simple, others complex and
cumbersome. But as the business grows, acquires new customers, enters new
markets and keeps pace with constant changes in information technology,
companies need to maintain highly accurate and up-to-date accounting,
inventory and statutory records. This is where a Computerised Accounting
System helps simplify, integrate, and streamline all the business processes,
cost effectively and easily and helps presents the true picture of all the
business undertakings to users of financial reports. With the decrease in the
price of computers and accounting programs, this method of keeping books is
becoming popular (Raymond and Bergeron, 1992). Osotimehin et al. (2012)
sees Small and Medium Enterprise (SME) as a veritable tool for the
achievement of national macro-economic objective in terms of employment
generation at low investment cost, creation of industrial interlinks by
consuming products of large firm and providing products used by large firms.
Survey Report on Small and Medium Enterprises 1990, conducted by National
Board for Small Scale Industries (NBSSI) and Ghana statistical services (GSS)
outlined the following as roles played by SME;
a)
b)
c)
d)
1.2
After the independence of Ghana till date, a good number of small and
medium scale enterprises have been established in Ghana. This is stimulated
by the governments effort towards improving the various indices of good
living of the Ghanaian populace.
Unfortunately, majority of these firms have been unable to stand the test of
time while the growth of some others have been stunted (Kpelai 2009),
implying that most small and medium scale enterprises (SME) established in
Ghana do not survive or grow to expected height.
xvi
Chioma (1979) believe that a greater number of small business owners who
enter the business every year fail to succeed. These failures have been
associated with a number of factors which include; lack of access to fund, lack
of entrepreneurship skills, poor credit rating, poor management practice such
as poor record keeping, inability to make or inappropriate use or inadequate
use of computerised accounting information among others (Kpelai, 2009;
Okoh & Uzoka, 2012, Abdulrasheed et al., 2012). According to Wichmam
(1983) and World Bank (1978)
1.3
information
1.4
Research Questions
1.5
Research Hypotheses
The researcher has formulated the following hypothesis for the study in a null
form.
xviii
Ho1:
Ho2:
1.6
Over the years, there has been public outcry for fresh graduates who will
develop their entrepreneurial skills and embark on legal economic ventures
that will enable them earn some income and even employ others rather than
roam the streets in search of jobs.
i.
ii.
growth.
The study will be particularly useful to fresh graduates who intend to go
into business by facilitating the sustainability and growth of small and
medium business which will in turn provide gainful and continuing
iii.
xix
iv.
Small and medium business owners may also be given some insight on
the possibility of breaking out of stagnation in business by paying due
attention to computerized accounting information in their business
v.
1.7
The study covers all aspects of accounting involved in the production of useful
information for all stakeholders in a business. It covers financial accounting
cost and managerial accounting which are used in producing computerised
accounting information. Also the study is limited to small and medium
businesses in Accra metropolis for periods between 2000 to 2014. The study
lasted for a period of three months. The selection mix of the SME's provided a
comparative point of assessing the impact of computerised Accounting
Information on the development of SME's in Ghana.
1.8
Definitions of Terms
Small Medium Enterprises: All over the globe there has being a lot of
definitions as to what exactly is meant by small and medium enterprises, most
often, the commonly used criterion is the number of employees of the
enterprise. In most developing economy including Ghana, small and medium
enterprises tend to have few employees who tend also to be mostly relatives of
the owner hence there is often lack of separation between ownership and
control. As a result, an operational definition is important for the study.
xx
The most commonly used principle which has been identified from the various
definitions is the number of employees of the enterprise. As contained in its
Industrial Statistics, the Ghana Statistical Service (GSS) considers firms with
less than 10 employees as Small Scale Enterprises (Kayanula and Quartey,
2000) and it is this definition that has been adopted and used in the course of
the study.
The employee principle which has been considered in this study is also in line
with the definition of Small-Scale Enterprises adopted by the NBSSI.
Business Development: In the content of these write up, business
development refers to the sustenance and growth of a business with a positive
multiplier effect on the economy at large.
Computerised accounting information: This relate to information gotten via
the use of financial, costing and managerial accounting techniques to process
economic data (events) of a business and produce useful information that can
be used by stakeholders of a business such as; (Managers, employees owners,
government etc) for making business, financial and investment decisions.
Accounting Analysis: It is a process of evaluating the extent to which a firm
accounting reflects economic reality (Wild et al 2007).
Accounting Ratio Analysis: This entails the analysis of mathematical relation
between two or more accounting variables or quantities (Jennings 1993).
and limitations of this research. Chapter 2: The second chapter is the literature
review of this study. It will be about the works of various authors and scholars
who have highlighted and discussed about the theories of the topic from
different dimension. Chapter 3: This third chapter will discuss the research
method that will be used in this research paper. Research method allows the
researcher to plan and design the whole research in a proper way and shows
the right direction to achieve an outcome. So the chapter explains the reasons
behind the use of selected research method and the advantages by using the
specified research approach. Chapter 4: This chapter will analyze the data to
provide a fruitful meaning of the research finding. Chapter 5: This chapter will
discuss research recommendations, limitations, and further research on this
topic and also describe how managers can get benefit or managerial
implications of this paper.
CHAPTER TWO
LITERATURE REVIEW
2.1
Introduction
xxii
2.2
xxiv
customer
market
analysis,
and
inventory
control
accounting
Notes
Accompanying
Financial
statements,
Historical
INPUT
PROCESSI
NG
xxvii
USERS
OUTPUT
Feedback
Feedback
Sales order
Processing
Invoicing
Inventory
Control
Purchase
Order
xxixProcessing
Sales
Ledger
Purchase
Ledger
Payroll
GENERAL
LEDGER
2.3
The Concept/Definition of Small and Medium Scale
Enterprises
There is no single, uniformly acceptable, definition of a small firm (Storey,
1994).
Firms differ in their levels of capitalisation, sales and employment. Hence,
definitions which employ measures of size (number of employees, turnover,
profitability, net worth, etc.) when applied to one sector could lead to all firms
being classified as small, while the same size definition when applied to a
different sector could lead to a different result. The first attempt to overcome
this definition problem was by the Bolton Committee (1971) when they
formulated an economic and a statistical definition.
Under the economic definition, a firm is regarded as small if it meets the
following three criteria:
xxx
i.
ii.
iii.
iv.
through the
medium of a formalised management structure;
It is independent, in the sense of not forming part of a large enterprise.
Quantifying the size of the small firm sector and its contribution to
ii.
iii.
contribution has
Changed over time;
applying the statistical definition in a cross country comparison of the
small firms economic contribution.
Thus, the Bolton Committee employed different definitions of the small firm
to different sectors. Alternatively, Wynarczyk et al (1993) identified the
characteristics of the small firm other than size. They argued that there are
three ways of differentiating between small and large firms. The small firm
has to deal with:
i.
ii.
iii.
As Storey (1994) stated, there are three key distinguishing features between
large and small firms. Firstly, the greater external uncertainty of the
environment in which the small firm operates and the greater internal
consistency of its motivations and actions. Secondly, they have a different role
in innovation; small firms are able to produce something marginally different,
in terms of product or service; this differs from the standardised product or
service provided by large firms. A third area of distinction between small and
xxxi
large firms is the greater likelihood of evolution and change in the smaller
firm; small firms which become large undergo a number of stage changes. It
was against this background that the European Commission (EC) coined the
term `Small and Medium Enterprises (SME). The SME sector is made up of
three components:
i.
ii.
iii.
According to World Bank since 1976 - Firms with fixed assets (excluding
land) less than US$ 250,000 in value are Small Scale Enterprises. Grindle et al
(1989:9-10) - Small scale enterprises are firms with less than or equal to 25
xxxii
permanent members and with fixed assets (excluding land) worth up to US$
50,000. USAID in the 1990s - Firms with less than 50 employees and at least
half the output is sold (also refer to Mead, 1994).
UNIDOs Definition for Developing Countries:
i.
ii.
iii.
iv.
From the various definitions above, it can be said that there is no unique
definition for a small and medium scale enterprise thus, an operational
definition is required. A point of caution is that the process of valuing fixed
assets in it poses a problem. Secondly, the continuous depreciation in the
exchange rate often makes such definitions out-dated. Steel and Webster
(1990), Osei et al (1993) in defining Small Scale Enterprises in Ghana used an
employment cut off point of 30 employees to indicate Small Scale Enterprises.
The latter however disaggregated small scale enterprises into 3 categories:
i.
ii.
iii.
The choice of small and medium scale enterprises within the industrial sector
is based on the following propositions:
(a) Small and Medium Scale Enterprises
xxxiii
SMEs are labour intensive, employing more labour per unit of capital
requirements;
Cater for the needs of the poor and;
Adapt easily to customer requirements (flexible specialisation).
These enterprises have been recognised as the engines through which the
growth objectives of developing countries can be achieved. They are potential
sources of employment and income in many developing countries. It is
estimated that SMEs employ 22% of the adult population in developing
countries (Daniels, 1994; Daniels & Ngwira, 1992; Daniels & Fisseha, 1992;
Fisseha, 1992; Fisseha & McPherson, 1991; Gallagher & Robson, 1995)
xxxiv
ii.
(Ogunleye 2000:28)
iii.
iv.
v.
vi.
Finally most medium scale business in Ghana take the form of private
companies and engage in businesses within the manufacturing, trading and
even the support the trade sector such as transportation, telecommunication
etc.
2.4
xxxvi
local raw materials; this may stem from their poor cash flows (Parker
et al, 1995). Aryeetey et al (1994) found that 5% of their sample cited
the input constraint as a problem.
ii.
iii.
iv.
vi.
pairs of trousers in a month went without any orders with the coming
into effect of trade liberalisation. Limited international marketing
experience, poor quality control and product standardisation and little
access to international partners, impede expansion into international
markets. It is reported that only 1.7% of firms export their output
(Aryeetey et al, 1994).
vii.
viii.
ix.
xi.
Lately Moris (2007) posit that small businesses have some inherent
disadvantageous characteristics that will require that they be provided with
public support. The basic challenges faced by small business include:
a) Poor record keeping and inefficient use of computerised accounting
information (Berryman 1982; Walton 2000; World Bank 1978). Also,
Byron and Firedlob (1984) posited that SMEs owners/managers lack
the technique for using financial statements or simply are unaware that
they can use them to support their financial and other business
decisions.
b) Inadequate managerial ability resulting from huge knowledge gaps.
Most promoters of small and medium businesses do not know how to
make and use computerised accounting information (Abdurasheed et
al., 2012)
c)
d)
e)
xli
f)
Poor financial control which makes room for fraudulent activities that
affect the survival of small businesses.
g)
xlii
2.5
Empirical Review
Oko and Uzoka (2012) carried out a study on the role of computerised
accounting information in the survival of small scale business in WarriNigeria, which employed the use of chi-square statistical technique to analyze
the data. The findings of their work showed that the success of small scale
business enterprises depends greatly, but not solely, on computerised
accounting information. Okoli (2012), worked on the use of Computerised
accounting information of an Aid to management decision making, using the
analysis of variance model (ANOVA) to analyze collected data. Her findings
showed that a good accounting system result in higher profit margin over the
years, thus concluding that weak accounting system should be eradicated.
xliii
Other works on the research variable include; that Osilimehin et al; (2012), on
the challenges and prospects of Micro and small scale enterprises in Nigeria
which revealed that financial constraint and lack of management skill hamper
the efficient performance of micro and small scale enterprises in Nigeria.
Shanker, (2012) carried out a study on the advantages of computerised
accounting information to small business. His study revealed that
computerised accounting information is beneficial to small business in several
ways such as; provision of reliable data on business operation, facilitating
business decision making, and aiding control of business activities.
Micholls and Homes (2013) carried out a study on an analysis of the use of
computerised accounting information by Australian small business, by
conducting a survey on small businesses within the country. The study
revealed that most small business within the industry do not prepare and make
use of computerised accounting information prepared in accordance to
standard accounting practice.
Worthy of note also is the work of Gibson and Wallschutzky (2013) which
carried out a study on the use of computerised accounting information in
decision making in small firms, using structured small business owners for a
twelve months period, found that few of the participating firms identified
access to computerised accounting information as important when making
xliv
strategic decisions. The study also revealed that some small firm
owners/managers use some business information for routine control decision.
However, the resulting gap from the above analysis is that the extent to which
the utilization of computerised accounting information influence the
development (in
2.5.1
The Role of Computerised accounting information on the
Improvement of the Performance of Small and Medium Enterprises
in Ghana
A careful review of related literature on the problem under study shows
extensive emphasis on the relevance of computerised accounting information
to the activities of small business and consequently, its survival and
development. It is particularly useful to small business activities such as;
inventory control, resource allocation, monitoring and control, evaluation of
performance etc.The use of computers is time-saving for businesses and all
financial information for the business is well organized (Baren, 2010).
xlv
xlvi
Abdurasheed et al. (2012) also argued that small business owners and
managers must be able to read between the lines of their financial statement,
implying the need for adequate and comprehensive analysis and interpretation
of accounts. He further opined that good accounting practices allows for
creation of useful computerised accounting information that could help
improve the effective operation of small and medium enterprises.
iii.
Iv.
xlix
i.
ii.
iii.
2.6
li
ii.
The capturing of such events as they occur via the use of subsidiary
books such as the sales day book; purchase day book, cash receipt book,
cheque payment book, petty cash book, general journal, nominal ledger,
debtors ledger, creditors ledger etc.
iii.
iv.
v.
vi.
lii
2.7
liii
even distribution of economic activity in a region and can help to slow the
flow of migration to large cities. Because of their regional dispersion and their
labour intensity, the argument goes; small scale production units can promote
a more equitable distribution of income than large firms. They also improve
the efficiency of domestic markets and make productive use of scarce
resources, thus, facilitating long term economic growth.
Naruanard (2003) argued that SMEs play important role in a nations economy
by virtue of the fact that they comprise majority of businesses in the nation
and contribute substantially to employment. He added that SMEs generate
employment, add improve labour skills and have linkages with large
enterprises. Osotimehin et al. (2012) opined that SMEs are catalyst in the
socio-economic development of any country. They are veritable vehicle for the
achievement of national macro-economic objective in terms of employment
generation at low investment cost. He further argued that SMEs contribute
substantially to GDP, export earnings, per capital income and output. It also
encourage the development of indigenous entrepreneurship, enhance regional
economic balance through industrial dispersal and generally promote effective
resource utilization that are considered to be critical in the area of engineering
economic development (Tolentino, 1996; Oboh, 2004; Odeh, 2005).
liv
levelled in terms of policies and strategies that are required to assist the sector
attain its full potential.
To wrap it up, Aborode 2005 cited in Okoh & Uzoka (2012) posited that the
importance of small scale enterprises can be seen in the vital role, which they
play in the development of the economy which includes;
1) Source of employment; over 70% of employed people in Africa are in
production in small businesses
2) Utilization of local raw materials, the raw materials used in production
in small businesses are obtained easily within the country. Money is
not spent on the importation of raw materials into the country thereby
reducing the amount of foreign exchange paid to foreigners
3)
4)
5)
6)
2.8
many setbacks that limit its ability to survive, grow and consequently impact
on the economy of a country. This is evidenced in the fact that several small
business established over time have failed to survive (kpelei 2009).
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter would present the method that was employed in the study. This
dealt with the research design, target population of study, sample selection and
design, data types, sources and method of data collection, validity and
reliability of data instrument, specification of variables employed, and
specification of model for data analysis, method of data analysis and limitation
of the study design.
lvi
this may seem straightforward, questions may yield very different and
unanticipated responses. A questionnaire is the main means of collecting
quantitative primary data. A questionnaire enables quantitative data to be
collected in a standardized way so that the data are internally consistent and
coherent for analysis. The questionnaire is considered to be appropriate in
view of the level of intellectual capacity of the respondents who can provide
more answers. The questionnaire affords not only wider geographical
coverage than any other technique, but also reaches individuals who are
normally difficult to contact. A questionnaire is more adequate in situations in
which the respondents have the opportunity to check his or her information.
There are some weaknesses associated with the use of a questionnaire. The
format of questionnaire design makes it difficult for the researcher to examine
complex issues and opinions. Even where open-ended questions are used, the
depth of answers that the respondent can provide tend to be more-limited than
with almost any other method of research. This makes it difficult for a
researcher to gather information that is rich in depth and detail. Again, the
researcher hopes the questions asked mean the same to all the respondents as
they do to the researcher. This is a problem that can - to some extent - be
avoided by conducting a Pilot Study prior to conducting the real survey. The
questionnaire was developed based on the research questions and in sections.
Section A was based on personal data (Bio data) of respondents and section B
was base on questions that will enable the researcher to collect data on the
variables needed to complete the research. The questionnaire consisted of both
open and closed-ended questions. The closed-ended questions enabled more
flexibility in filling in. The open-ended on the other hand allowed opinions
lviii
lix
3.5
The study investigates the relationship that exist between CAI and the
development of SMEs, in terms of improved performance of SMEs, so as to
find out if CAI is useful to the development of SMEs. The variables for this
study are categorized into three viz: Independent variable, Dependent variable
and the control variables.
3.5.2
Dependent Variable
The study has two dependent variables measuring SME development which
are; annual profit figures represented as (PF) and number of branches
represented as (NOB).
The control variable of these study are demand for the enterprises product
represented as (DE) and access to capital or capital investment represented as
(CI).
lxi
3.6
lxii
i.
ii.
iii.
iv.
v.
vi.
(7)
Therefore NOB = +B1AI+ B2DE + B3CI + ei ----------------------------------(8)
Where NOB =number of branches
= intercept
B1, B2, B3 = the coefficients
AI=computerised accounting information
DE = demand for enterprises product
CI = capital investment
ei = error factor
This model is also stated without the control variables as follows;
NOB= +B1Rc+B2Sd+B3Sb+B4La+B5Fpa+B6Faa+ei. ----------------------(9)
3.7
lxiv
3.8
The method adopted for data analysis was guided primarily by the nature of
the research problem, the objectives and hypothesis formulated in chapter one.
Simple frequency tables and percentages were used to summarize
demographic data of respondents and other primary data gotten from the field.
Also, the researcher strives to find out the nature of relationship that exists
between the variable under study by employing the use of multiple linear
regressions to assess the nature and level of relationship since the model is a
multivariate one. More so, to be able to interpret the relationship between
variables of the study and find answers to the research questions posed in
chapter one, t-test for significance would be used to test the formulated
hypothesis.
3.9
A letter of introduction was collected from the Methodist University CollegeGhana, Accra which was presented to the various SME's respectively to allow
access to the various premises. The researcher met the various heads of the
SME's and organised a meeting to brief them about the project work and its
importance and appealed to them to co-operate with the researcher when the
need arise and the appropriate officer was appointed to help with the
lxv
questionnaire. Sample questions for the SME's were given to them to answer
and collect after one week. The researcher used two weeks to gather the data.
3.10
The major limitation of the study design emanates from the unavailability of
readily available and accurate number of Small and Medium Enterprises in
Accra Metropolis and the metropolis its own share of demarcations. This
limits the possibility of making generalizations on all SME's in Accra
Metropolis. To manoeuvre this hurdle however, the researcher has confined
the study to only selected SMEs in Accra metropolis that are registered with
NBSSI, RGD and MOTI. Also, the use of non-random sampling technique
(convenience sample) reduces the objectivity of the design. To offset this, the
researcher used a large sample size of 40 selected SMEs in the sample. The
last limitation of the study design lies in the method of data analysis. The
underlying assumptions of multiple regressions such as the existence of
linearity might not always be met. Also there is the possibility outliers being
present in the formulated model. However, to overcome these, the researcher
carefully formulated the model to include all predictive factors including
control variables and error factor to caution the effect of any unmet underlying
assumption. Also outliers are directly discarded from the model.
lxvi
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF RESULTS
4.0
Introduction
4.1
Data Presentation
This section presents data collected from both primary and secondary sources
as show in the table below.
Table 1:
Questionnaire
Administered
Returned
Copies
40
40
lxvii
Percentage (%)
100
100
Not returned
Retuned but unusable
Returned and usable
Source: Field Survey, 2015
0
2
38
0
5
95
Frequency
Valid
Percent
Valid Percent
Cumulative Percent
20-30
20.0
20.0
20.0
31-40
18
45.0
45.0
65.0
41-50
15.0
15.0
80.0
51- Up
20.0
20.0
100.0
40
100.0
100.0
Total
Frequency
15
10
5
5
3
2
40
Percentage (%)
37
25
12
13
8
5
100
Percent
Valid Percent
Cumulative Percent
1-5
12
30.0
30.0
30.0
6-10
22.5
22.5
52.5
11-15
10.0
10.0
62.5
16-20
15.0
15.0
77.5
21-ABOVE
22.5
22.5
100.0
40
100.0
100.0
Total
information for a given SME is on weekly basis the annual frequency will be
52 since there are 52 weeks in a year.
4.3
Descriptive Statistical
The descriptive statistic which is prepared to make raw data from the field
more comprehensible and ease the analysis of collected data is show in table
4.4 below.
Table 6. Descriptive statistic for all variables
Variable
Minimum
Maximum
Mean statistic
Deviation
Range
AI
Rc
Sd
Sb
LA
Fra
Faa
DE
CI
PF
NOB
38
38
38
38
38
38
38
38
38
38
38
statistic
10
2
2
2
2
1
1
450
2000
345
1
statistic
95
52
6
6
7
12
12
7010
150,000
6831
5
28.21
12.00
3.29
3.97
3.13
3.50
3.29
2747.84
30900.00
2167.82
2.55
statistic
23.051
16.089
1.228
1.127
1.256
2.911
3.127
2132.804
31406.200
1884.835
1.083
statistic
85
50
4
4
5
11
11
6560
148000
6.486
4
Table 6 above presents the descriptive statistic for all the variables. N
represents the total number of paired observations which is 38, reflecting the
total number of questionnaire used. The computerised accounting information
(AI) has a mean of 28.21 with a high standard deviation of 23.031. this means
that the rate of utilisation of computerised accounting information by the
sampled SMEs is 28 times within a year on average and the fluctuation around
this mean is 23.1, indicating that the rate of utilisation among the SMEs is not
uniform as shown in the high standard deviation. The two control variables,
demand for enterprise product (DE) and capital investment (CI), showed a
mean at 2,747,800 and 30,900, while their standard deviations were 2,132,800
lxxi
and 31,406,700. This means that on average the annual demand for their
products is 2,747,800 with a fluctuation of 2,132,800. This also reflects the
absence of a uniform demand for the products of sampled SMEs. Also the
average capital investment of the sample SMEs stand at 30,900,000 with a
very wide fluctuation of 31,406,200. This is not out of place considering the
wide difference between capital base of small businesses and that of medium
businesses. The two dependent variables of the study (annual profit and
number of braches) had a mean of 2,167,820 and 2.55 while the standard
deviation stood at 1,884,839 and 1.083. This also means that the average
annual profits for sampled SME stood at 2,167,820 with a wide fluctuation
around the mean of 1884,835 while the average number of business for SMEs
is approximately 3 with a very low fluctuation of 1.083.
4.4
In attempt to validate the data used for these analysis and ascertain the
robustness of the results, the following checks were carried out; (I) check for
multicollinearity
relationships.
(I)
all
variables
in
the
are;4.544,4.157,3.984,2.904,4.682,6.321,7.309,5.098,3.455
models
(source
SPSS
computations shown in table 4.6 and 4.8 ). They all fall below 10, indicating
the absence of multicollinearity and consequently validating the collected data.
(ii)
lxxii
4.5
Regression Results
To achieve the major and specific objectives of this study multiple regression
were computed for the two models using Statistical Package for Social
Sciences (SPSS) version 16. Also, to find results that are specifically linked to
the two specific objectives of the study the above models were adjusted by
excluding the control variables and then computing the regression for the new
models. Regression results for the models are shown in the sub-sections
below.
PF = + B1AI +B2DE +
B3 CI + ei
Table 4.7: Summary of Regression Results
Change statistics
R-
Std.
Square
change
Error of
change
Mode
R-
Adjusted
the
1
1
.985
square
.969
R Square
.967
estimate
343.718
.969
359.536
lxxiii
df1
df2
34
Sig. F
Durbin-
Change
Watson
.000
1.798
Mode
1(constant)
AI
DE
CI
95%
Collinearity
Standardize
Confidenc
statistics
Understanding
e interval
Coefficient
B
Std Error
Coefficient
Beta
Sig.
for B.
Lower
.179
.770
.068
-2.561
2.894
12.597
1.157
.015
.008
.000
.255
Bound
-431.963
3.893
.571
-.003
-240.859
14.603
.680
.004
94.036
5.226
.054
.004
Toleranc
VIF
e
.220
.214
.257
4.544
4.157
3.894
ii.
However, to be more direct on the objective of the study the control variables
will be eliminated so as to ascertain the direct impact of computerised
accounting information on the profitability of SMEs. This necessitates the
adjustment of model 1. To the following;
PF = + B1RC + B2Sd + B3Sb + B4La+B5Fpa+BFaa + ei
Below is the summary of regression result for the new model.
Change statistics
Error
of
Mod R
R-
Adjuste
square d
the
estimat
R e
R-
df
df
Sig. F
Squar
change
Chang
e
chang
lxxv
Durbin
Watso
n
1
1
Square
.865
.887
69.597
e
.887
40.636
31
.000
1.497
942
Source: Field survey 2015 using SPSS version 16.0
Confidenc
Collinearity
Understanding
d Coefficient
Statistics
Coefficient
B
Std Error
Beta
1(constant)
-1884.352
.618
Rc
Sd
Sb
La
Fpa
Faa
42.475
668.560
-39.807
495.967
-29.126
3.166
.014
.240
.388
.364
.106
.081
Mode
.363
.436
-.024
.330
-.045
.005
Sig.
for B.
Lower
.001
Bound
-2937.480
3.649
3.527
3.338
.123
1.629
-.330
.047
.001
.002
.903
.113
.743
.963
17.913
260.028
-700.964
125.046
-209.002
-34.661
.344
.214
.097
.088
.196
.289
interval
Toleranc
VIF
2.904
4.682
6.321
7.309
5.098
3.455
The above table shows that the regression coefficients for the various
measures of computerised accounting information and the measure of SME
development. It shows a negative intercept of -1884.352 which should be
ignored since profit could actually be made in the absence of computerised
accounting information. The coefficient for Rc of 62.475 implies that a unit
change in rate of consultation of computerised accounting information (RC)
will cause a change in annual profit to the tune of 42.475. The coefficient of
the other independent variables could be interpreted in like manner.
1
1
.511
Change statistics
Error of
Durbin-
the
R-
df
df
Sig. F
R-
estimat
Square
change
Chang
square
chang
.971
e
.261
Square
Mode
Std.
.261
.195
e
3.997
34
.015
Watson
1.890
there still exist a positive relationship between the predictors (AI, DE & CI)
and the response variable (PF).
Mode
1(constan
95%
Collinearity
Standardiz
Confidence
Statistics
Understanding
ed
interval
Coefficient
B
Std
Coefficient
Beta
1.939
Error
.266
Sig
B.
Lower
.
.
Bound
1.399
5.398
-.040
.220
t)
AI
for
Toleranc
00
-.010
.015
-.222
3.707
0
.
48
DE
.000
.000
.397
1.321
5
.
1.146E-
.000
.332
1.142
5
.
.000
.241
4.15
7
.000
26
2
lxxviii
4.54
4
19
CI
VIF
.257
3.89
4
lxxix
The adjusted R square of .416 indicates that 41.6% of the variations in the
number of branches are explained by variation in computerised accounting
information while the remaining 59.4% is explained by factors not included in
this model. This also shows that other variable outside the model contributes
more to branch expansion than the independent variable. Notwithstanding
computerised accounting information still has a positive relationship with the
number of branches of SMEs as shown in the adjusted R-square of 41.6%
which is greater than zero.
Mode
95%
Collinearity
Standardiz
Confidence
Statistics
Understanding
ed
interval for
Coefficient
B
Std
Coefficient
Beta
Sig.
Erro
1(constan
1.286
r
.418
t)
Rc
Sd
Sb
La
Fpa
Faa
-.029
.445
-.342
.085
.203
.058
.014
.240
.388
.364
.106
.081
B.
Lower
Bound
-.434
.505
-.355
.099
.547
.168
2.081
.046
.026
-2.027
1.857
-.881
.233
1.928
.719
.051
.073
.383
.817
.063
.478
-.059
-.044
-1.133
-.658
-.012
-.107
.344
.214
.097
.088
.186
.289
2.904
4.682
6.321
7.309
5.098
3.455
highest predictive power. The coefficient of .445 implies that a unit change in
number of source document will induce a corresponding change in number of
branches to the tune of 0.445.
4.6
The research hypotheses stated in chapter one of this study are tested in these
section using decision rule stated in chapter three and the t-values in table 4.7
and 4.11.The first hypotheses is stated below in its null form; Ho1: There is no
significant relationship between computerised accounting information and the
performance of small and medium enterprise.
This hypothesis relates to adjusted model 1 which is PF =
+B1Rc+B2Sd+B3Sb+B4La+B5Fpa+B6Faa
The computed t-statistic for this model as shown in table 4.6 is 2.894 while the
critical value from T-table at 31 degrees of freedom, significant at .05 is 2.040
(see appendix v for the T-table). This clearly shows that the computed tstatistics is greater than the critical value of t and as such the null hypotheses
would be rejected (see decision rule in chapter 3). This also implies that the
alternative hypothesis which states that there is a statistically significant
relationship
between
computerised
accounting
information
and
the
lxxxi
(a)
The computed t-statistics for this model as stated in table4.10 is 5.398 while
the critical value from T-table at 31 degrees of freedom, significant at .05 is
2.040 (see appendix v for the T-table). This clearly shows that the computed tstatistic is greater than the critical value and as such the null hypotheses which
state that there is no significant relationship between computerised accounting
information and expansion/ diversification of SME should be rejected since
the computed t-statistics is greater than the critical value (see decision rule in
chapter 3). This also implies that the alternative hypothesis which state that
computerised accounting information has a significant relationship with
expansion of SME should be accepted. This significant positive relationship
between computerised accounting information and SME expansion further
attest to the fact that computerised accounting information is useful for
planning expansion programmes of SMEs. The fact that financial institutions
demand for the financial statements of SMEs before granting loans to them
(which is used for funding their expansion programmes) also supports the fact
lxxxii
lxxxiii
(b)
any
statistically
significant
relationship
between
computerised
accounting information and number of branches. In line with this, the tstatistic was used to test positive relationship that was shown by the regression
result and rejected the null hypotheses which stated that there is no statistically
significant relationship between computerised accounting information and
expansion of branches network of SME. The rejection of the null hypothesis
showed that there exist a statistically significant positive relationship between
computerised accounting information and expansion of SMEs. This finding is
supported by the fact that computerised accounting information aids funding
of SME activities by assisting them in sourcing loans from financial
institution. It also aid in the optimal use of available funds by providing
information that is useful for monitoring and controlling expenditure. To wrap
it up, the analysis revealed that computerised accounting information had a
statistically significant positive relationship with the two measures of SME
development (SME performance and branch network) and as such
computerised accounting information is considered useful for the development
of SMEs.
lxxxiv
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction
This study set out to establish the impact of computerised accounting
information on the development of SME's in Ghana. This chapter seeks to
summarises the main findings of the study and draw conclusion out of the
study. It will also make some recommendations and suggestions for further
studies.
5.1
Summary of Findings
In pursuit of the major and specific objectives of the study relevant data on the
variables of the study were collected, analyzed and used to test formulated
hypothesis from which the following findings were deduced.
(a)
as the measure of SMEs development this attest to the fact that computerised
accounting information is useful to the development of SMEs.
(c)
The positive relationship between computerised
accounting
positive
relationship
between
computerised
accounting
5.2
Conclusion
Previous research effort on the variable of these study shows that most SMEs
do not maintain an effective and up to date accounting system (Abdurasheed
et al). This make it imperative for one to determine whether computerised
accounting information provided by an up to date accounting system is useful
for the development of SMEs. It is against these backgrounds that the research
effort was embarked on to empirically verify the usefulness of computerised
lxxxvi
SME's.
ii.
Computerised accounting information promotes SME development by
positively imparting on the performance of SME.
iii.
5.3
Recommendation
Flowing from the findings of the study, the following recommendations have
been deduced by the researcher:
i.
lxxxvii
v.
that they pay due attention to available accounting data when drawing out plan
for the establishment of a new business.
5.4
The nature of this research work clearly shows that there is enormous scope on
which further research needs to be carried out on the subject matter. This is
based on the fact that the study was limited to only SMEs in Accra, pointing
out the need for a nationwide research to be embarked on. Also, the study was
centred on SMEs only, thus pointing out the need for further study could be
carried out on large firms or corporations so as to substantiate the usefulness
of computerised accounting information to all types of businesses. In line
with the foregoing this study suggests the following for further research:
1.
lxxxviii
REFERENCES
--------- (1992), `How Small Enterprises in Ghana Have Responded to
Adjustment, The World Bank Economic Review, 6(3): 423-438.
lxxxix
E.R.
Publishers.
Bolton J.E (1971), Report of The Committee of Inquiry on Small Firms,
HMSO, London.
Bowerman, B.L. and OConnell, R.T. (2003). Business Statistics In Practice.
6th edition. New York: McGraw-Hill Publishers.
Burgess, S., 1998, Information Technology in Small Business in Australia: A
summary of computerized-accounting system. Information Technology,
Australia. Commonwealth of Australia
Burns, R.B. and Burns, R.A. (2008).
xci
xcii
xciii
16th Annual
xciv
http://www.ehow.com/facts_6866012_rationale-computerized-
xcv
Name of SME's
Ashanti Home Touch
Avenue Chemist and Mart
Avtech
C and E Bethel Ltd
CCT
City paints supply ltd
Coral paints
Dart Pharmacy
Delta Unic
Easy stitch collection
Falcon coating ltd
PF'000
52
3
52
12
9
8
2
52
52
52
8
5,650
522
5,724
4,285
3,453
2,431
345
6,831
4,635
4,462
2,051
4
2
5
4
3
3
2
6
4
6
3
4
2
2
3
3
3
2
6
4
4
4
xcvi
5
2
3
4
3
3
2
7
4
4
4
4
2
4
4
3
2
1
12
4
12
4
4
1
12
3
2
2
1
12
12
6
4
73
12
78
30
23
21
10
95
80
84
27
6,000
800
6,245
5,110
3,700
3,120
450
7,010
5,500
5,760
3,200
52,000
4,000
55,000
51,000
53,000
50,000
2,000
150,000
105,000
65,000
52,000
15
9
10
6
7
8
6
6
15
4
3
4
3
4
4
5
5
4
4
3
4
5
4
3
6
3
2
3
2
3
3
4
4
3
4
2
4
6
4
4
4
4
2
2
2
2
3
2
4
3
4
2
5
6
4
4
4
4
2
2
2
2
3
2
9
4
8
3
5
9
4
2
6
3
2
2
2
1
3
2
6
4
4
2
9
5
2
2
3
2
1
2
1
2
3
4
43
27
34
18
34
39
24
21
38
20
12
15
12
14
19
19
3
3
5
4
6
6
4
3
2
6
2
2
3
2
3
2
2
2
2
3
2
2
2
2
3
2
2
2
2
3
2
2
2
2
3
2
2
2
2
3
1
1
1
1
2
1
2
1
1
2
1
1
1
1
2
1
2
1
1
2
5,500
3,200
5,600
2,900
5,000
4,500
4,000
2,930
6,000
2,000
1,020
1,500
710
1,510
1,900
915
25,000
32,000
34,000
10,000
50,000
40,000
35,000
50,000
75,000
10,000
6,000
10,000
20,000
15,000
17,000
8,000
4,325
2,234
4,150
1,865
3,152
3,985
2,546
1,995
5,022
1,161
506
901
485
701
876
1,105
14 800
5,000
651
11
11
14
13
19
14
14
11
10
19
7,000
5,000
7,000
9,000
12,000
7,000
15,000
5,000
6,500
20,000
495
467
625
610
725
634
602
510
465
995
700
825
795
832
855
912
759
650
610
600
Name of SME's
Ashanti Home Touch
Avenue Chemist and Mart
Avtech
C and E Bethel Ltd
CCT
City paints supply ltd
Coral paints
Dart Pharmacy
Delta Unic
Easy stitch collection
Falcon coating ltd
Fevnik Ghana Ltd
Franko Trading Ent
Freddies corner
Globnet solution
xcvii
Jandal
K-Badu Agro Chemical co.ltd
Las palmas
Look and pick co.ltd
Malcom Forex bureau
Masai computers services ltd
Maxconsolidated
Motorway mother care
Nasec Forex bureau
Rain coat Roofting systems
Rans logistics
Respect Ghana Distribution ltd
Royal computers and Electronics ltd
said's Jewellery
Sdant Ventures
sun seekers Tours
Tatters
The Orangery
The stationary clink
Trip
Ultimate Phones
Zakour Trading
ASOL Business & IT Solution
Source: Student Field survey 2015
Achimota
Achimota
Lapaz
Accra
Circle Accra
Adabraka
Adabraka
Lapaz
Circle Accra
Adabraka
Adabraka
Adabraka
Adabraka
Adabraka
Adabraka
Adabraka
Adabraka
Adabraka
Accra
Accra
Circle Accra
Accra
Accra
QUESTIONNAIRE
Section A (Bio Data)
1. Please tick as appropriate.
Sex:
Male [
]
Female [
]
2. Marital Status:[
]
Single [ ]
Married [
3. Age: 20-30[ ] 31-40[ ]
41-50[ ]
51 and above[
4. Educational qualification:
Basic School Living Certificate [
]
Senior School Certificate Examination SSCE [
]
Diploma/Certificate [ ]
HND/Degree [ ]
xcviii
]
]
2nd Degree [ ]
PhD/Professional [ ]
5. Nature of Business --------------------------------------------------------6. Number of Employees: 1to 10 [ ] 11 to 50[ ] 51to 200 [ ] 201 and
above [ ]
7. Number of years business existence:
1 to 5 [ ] 6 to 10 [ ] 11 to 15 [ ] 16 to 20[ ] 21 and above [ ]
8. Number of branches:--------------------------------------------------------
Section B
Please tick the appropriate option that applies to your business
1. How frequently do you consult your business computerized accounting
information such as sale day book, purchase day book
(a) Daily (b) weekly (c) Monthly (d) Quarterly (e) Semi-annually
(f) annually. (g) Others, please specify__________
2. How often do you assess the computerized accounting information of
your business to monitor and evaluate the progress of your business?
(a) Daily (b) weekly (c) Monthly (d) Quarterly (e) Semi-annually (f)
Annually. (g)others______
3. How often you consult your computerized accounting information
system to monitor business spending? (a) Daily (b) weekly (c) Monthly
(d) Quarterly (e) Semi-annually (f) Annually. (g) others, please
specify__________
4. How often to you consult your computerized accounting information to
monitor sales proceeds? (a) Daily (b) weekly (c) Monthly (d) Quarterly
(e) Semi-annually (f) Annually. (g) others, please specify__________
xcix