Nigerian Journal of Banking and Financial Issues (NJBFI)

ACCOUNTING INFORMATION SYSTEM AND FINANCIAL PERFORMANCE OF SMEs IN LAGOS STATE NIGERIA

Abstract

The paper sought to examine accounting information system and financial performance of SMEs in Nigeria. Specifically, the objectives are to investigated the effect of cost of implementation and maintenance of AIS on financial performance of SMEs; assessed the effect of data accuracy and reliability of AIS on financial performance of SMEs; examined the effect of System Integrity of AIS on Financial Performance of SMEs; and examined the effect of Timeliness of Reporting in AIS has on Financial Performance of SMEs. The study adopted descriptive search design and a sample of 387 registered Nano business operators was determined from the population of (N=11,616) using Taro Yamane Formular. Data were collected through the use of e-survey (questionnaire). Out of the 387 copies of questionnaire administered, 255 copies were fully filled and retrieved. The data were analysed using regression analysis and ANOVA with the aids of SPSS. The findings revealed that Accounting Information Systems (AIS) are fundamental in improving financial performance of SMEs. Costs of implementation and maintenance, accuracy of data, system integrity, and timely reporting all have substantial impact on financial performance with significant explanatory power. It is concluded that SMEs who adopt AIS would experience timely decision-making, efficiency, and overall financial performance. By enhancing system reliability and timely reporting, financial transparency would increase, which then improves business growth and sustainability in the long run. The study therefore recommended that SMEs should invest on the adoption of efficient and reliable AIS that will improve the accuracy of data, financial reporting, and decision making.