The study explored accounting information systems and the growth of SMEs (Study on SMEs in the Greater Lagos Region). Two theories were used in this study to broaden the scope of the study. Contingency Theory and Design of Accounting Information Systems; Technology Acceptance Model (TAM).

The survey sample included 10 Lagos SMEs, 5 island SMEs and 5 mainland SMEs. Primary data were used in this study. A structured questionnaire was used to collect the required data from selected SME employees. We selected 200 employees from 10 SMEs using a targeted sampling technique. Twenty employees were selected for funding for each selected company. Collected data are subjected to quantitative analysis with descriptive statistics and chi-square method. The survey results showed that the accounting information system has a significant impact on the sales growth of SMEs in the Lagos metropolitan area (the chi-square value is 6.48 and the chi-square critical value is 5.74). Yes, and significant). 5% level and 4 grade). Freedom); accounting information systems have a significant impact on wealth growth of SMEs in the Lagos metropolitan area (5% significance level, 5 degrees of freedom, chi-square value of 9.79, critical chi-square value of 7.59) .

The study concludes that accounting information systems have a significant impact on sales and asset growth of SMEs in the Lagos metropolitan area.

The study suggests amongst others that, SMEs should improve their accounting system in order to generate quality, reliable and timely accounting information, Owners of SMEs should integrate accounting information system in their decision processes, SMEs should endeavor to consult accountants regularly in order to be able to maintain high and generally acceptable accounting practices, Accounting training programmes for SMEs should be organized by the Lagos State Ministry of Trade, Commerce and Industry for those who do not know the importance of maintaining accounting records to come to grips with it, Government should stipulate the minimum number of books to be kept by all SMEs that meet certain criteria which certifies them to operate in Nigeria, SMEs should ensure that the cost of acquiring AIS does not outweigh the benefits the company would gain from using them.



1.1 Background of the study

Accounting plays a vital role in the success or failure of contemporary business institutions. Systems are responsible for recording, analyzing, monitoring and evaluating the financial condition of business institutions, preparing documents necessary for tax purposes, providing information support to many other organizational functions, (Amidu, John & Joshua. 2011). In the context of small and medium scale enterprises (SMEs), accounting information is important as it can help the firms to manage their short-term problems in critical areas like costing, expenditure and cash flow, by providing information which will be used to support monitoring and control (Mitchell, Reid & Smith, 2000; Son, Marriot, & Marriot, 2006). Small businesses are the reason for all growing economies. The mission of SMEs includes job creation, rural development, youth empowerment, invaluable contribution to national income and growth, dissemination and development of adaptive technologies, and regionally balanced growth channels ( source *****). These companies face multiple challenges in Nigeria due to numerous domestic and global economic issues and political contradictions. The result is high corporate mortality (Dasanayaka, Kankanamge & Sardana, 2011). Some of the challenges are internal problems, such as insufficient working capital, tough competition from large companies, difficulty in procuring raw materials, low production capacity, and poverty.

A study conducted by Ismail (2009) deals with corporate financial management. Accounting information is information provided by accountants and accounting systems. This information is usually displayed in financial statements such as income statements and balance sheets. It also includes all financial measures extracted from that financial statement. Accounting systems analyze and monitor a company’s financial situation, produce necessary documents for tax purposes, and provide information to support many other organizational functions such as manufacturing, marketing, human resources management, and strategic planning. play a role. Without such a system, it would be very difficult for small businesses to measure performance, identify customer and supplier account balances, and predict the future performance of the organization. The primary purpose of the Accounting Information System “AIS” is to collect and record data and information about events that have an economic impact on an organization, and to maintain, process, and use such information internally and for appropriate decision-making. dissemination to external stakeholders (Stefanou, 2006).

The growth of computer technology in the 1950s facilitated the development of information storage and processing (Rashid, Hossain, & Patrick, 2001). Computer technology is increasing our use of information with its ability to analyze vast amounts of data and generate accurate and timely reports. The unique characteristics of these computing capabilities have led to the introduction of various information systems such as: Information systems technology has definitely changed the way businesses operate (Elliot, 1992). This system has helped companies increase production and trade as they are in a better position to achieve their goals.This therefore improves business activities. More trades and transactions means capturing and updating more accounting data. Traditional accounting methods of manually entering and recording daily transactions have become inefficient and time consuming. Mistakes such as incorrect data entry, inefficient task execution, and excessive use of paper products have caused many problems in business operations and organizational performance. These shortcomings have led to the emergence of accounting information systems. A system that enables more efficient collection, analysis and generation of reports (Saira, Zariyawati & Annuar, 2010).

Aremu & Adeyemi (2011) argue that SMEs rarely give serious thought to sound accounting processes, except for legal requirements, and that inadequacies and inefficiencies in accounting processes lead to early collapse of firms. pointed out to be the cause of Most of them were responsible for them. The above situation persists in Nigeria due to insufficient generation and use of accounting information. The lack of accounting information systems in most small and medium enterprises in Nigeria adds to the challenge.

1.2 Problem

SMEs are known to be the cogwheels behind the moving train of the Nigerian economy and it is also well known that all large companies start small.The importance and vitality of SMEs in Nigeria Note that, despite its nature, many small businesses do not pay much attention to accounting information and bookkeeping related to their business transactions, despite their importance in their success. It may be the result of a lack of detailed knowledge of the owner or relevant accounting practice manager.

It is difficult to determine the extent to which the need for accounting information for the survival and growth of small businesses is not recognized. The low educational background of the owner and the hiring of inexperienced bookkeeping staff hindered the preparation of unreliable bookkeeping and financial statements, affecting management.

1.3 Purpose of the survey

The general purpose of this study is to examine the role of accounting information systems and the growth of small businesses. Specific goals are:

1. Determine the impact of AIS on sales growth.

2. Determine the impact of AIS on wealth growth. 1.4 Research question

1. What is the impact of AIS on revenue growth?

2. What impact will AIS have on wealth growth?

1.5 Research hypothesis

The following hypotheses were made:

AIS has a significant impact on revenue growth. H02:
AIS has a significant impact on wealth growth.

1.6 Operationalization of variables

The main objective is to study accounting information systems and the growth of SMEs in the Lagos metropolitan area. The dependent variable is his SME growth, which he is measured by two variables: revenue growth and asset growth.

The independent variables are accounting information systems, captured by ethical values ​​(EV), effective accounting systems (EAS), human resources (HR), and investment in technology (IT).

Y*=f(Y1, Y2)

Y*=SME growth

From where:

Y1=sales growth

Y2=asset growth

X=Accounting information system


From where:

X1=ethical values

X2=effective accounting system


X4=Invest in technology

The growth of SMEs can also be said to be a function of the accounting information system. Y*=f(X1,X2,X3,X4)

Converting this functional relationship to a regression model gives:

Y*= α0 + α1X1 + α2X2 + α1X3 + α2X4 + µ

From where:

α0 = constant term of regression model

α1-4 = coefficients for accounting information system parameter estimates.

µ= random variable.

1.7 Validity of research

An excellent accounting information system operated by a company is an essential tool for effective management. It ensures that decisions made by management are credible and that these decisions correspond to the objectives to be achieved. The research work makes corporate managers, various businesses, or other managers aware of the importance of maintaining appropriate, complete, and reliable records using accounting information systems. their company activities. For workers and consumers, it helps companies assess their ability to continuously produce goods and services and pay salaries. This research will benefit governments in terms of collecting taxes and regulating business activities.

Finally, this study adds to the existing body of literature on this subject and thus will be useful to future researchers.

1.8 Scope of investigation

This research focuses on “accounting information systems and the growth of small and medium enterprises”. The study population includes SMEs in the Lagos metropolitan area, Lagos State, registered with the Small and Medium Business Development Authority of Nigeria (SMEDAN).

 Definitions of phrases

It’s the systematic manner of recording, communicating, summarizing, studying and reporting of monetary data.

Accounting data:
This refers back to the device of storing, processing of monetary and accounting records which can be utilized by selection makers.

Accounting data device:
it is described as a pc primarily based totally device that will increase the manage and decorate the cooperation withinside the organizations.

Small scale businesses:
This refers to a commonly privately personal enterprise that employs a small wide variety of people and does now no longer have a excessive extent of income.

Medium scale organisations:
This refers back to the generally end result from the gradual and consistent boom that consequences from a a success small enterprise

Sales Growth:
This is the quantity with the aid of using which the common income extent of a corporation’s services or products has grown, generally from yr to yr.

Assets Growth:
This is a company activities related to asset expansion.

Ethical Values:
The set of mounted concepts governing virtuous behavior.

Effective Accounting Systems:
An powerful accounting device is a form of device this is accurate, beneficial and timely. Its motive is to offer data for outside entities, which include tax companies and investors, and for inner purposes, which include comparing performance and profitability.

Human Resources:
It is used to explain each the those who paintings for a corporation or corporation and the branch chargeable for coping with sources associated with employees.

It is an asset or object this is bought with the desire that it’s going to generate profits or will recognize withinside the future.

Financial declaration is the formal document of the monetary sports of a enterprise, individuals or different entity. It additionally offer data approximately the concerning the placement and overall performance of the enterprise which include its assets, liabilities, equity, profits, charges and coins flow.


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