The Impact of Computerised Accounting Systems on Financial Reporting in Maldives SMEs

This paper analyses the impact of computerised accounting systems on financial reporting in Maldives SMEs. It explores the quality of financial reports and the effect of computerised accounting systems on it. The study concludes that computerised accounting systems have a positive effect on financial reporting in Maldives SMEs.

Running head: THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN
THE FINANCIAL REPORTING AMONG SMES IN MALDIVES
The impact of using computerised accounting systems (CAS) in financial reporting among SMEs
in Maldives
Name of the Student:
Name of the University:
Author’s Note:

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
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Abstract
This paper is related to having an understanding of the impact of “Computerised Accounting
Systems” in the financial documentation among the SMEs in Maldives. Computerised
Accounting Systems are a new tool and technology that are available to the organizations with
the help of which companies are able operate their business in a much better way create financial
statements that are ideal for the companies in order to keep track of all their records and
transactions and assist in the process decision making for the business. The objective of the paper
has been fundamental in understanding the aspects with regards to which the results will be
attained. In the same manner, data has been collected and thereafter data analysis process has
been undertaken with the help of which effective level of results are obtained for this paper. The
results that have been obtained expresses that “Computerised Accounting System” has a positive
effect on the financial reporting of the SMEs in Maldives and effective supervision and
maintenance can enhance the activities of the process in the SMEs as well as in the other
industries in Maldives in the future.

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Table of Contents
Chapter 1: Introduction....................................................................................................................6
1.1 Background of the Study.......................................................................................................6
1.1.1 Computerised Accounting System.................................................................................8
1.1.2 Quality of the Financial Reports.....................................................................................9
1.1.3 Effect of Computerised Accounting System on the Financial Report Quality.............10
1.2 Statement of the Problem.....................................................................................................11
1.3 Research Objectives.............................................................................................................12
1.4 Research Question...............................................................................................................12
1.5 Significance of the Study.....................................................................................................13
1.6 Scope and Limitations of the Study.....................................................................................13
Chapter 2: Literature Review.........................................................................................................14
2.1 Related Studies....................................................................................................................20
2.2Small and medium enterprises in Maldives..........................................................................22
2.3Factors that influence computerised accounting system......................................................25
2.4 Conceptual Framework........................................................................................................26
2.5 Summary of the Literature...................................................................................................27
Chapter 3: Research Methodology................................................................................................28
3.1 Introduction..........................................................................................................................28
3.2 Research Philosophy............................................................................................................28

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3.3 Research Approach..............................................................................................................29
3.4 Research Design..................................................................................................................31
3.5 Quantitative Data.................................................................................................................32
3.6 Primary Data........................................................................................................................32
3.7 Sample Size.........................................................................................................................33
3.8 Access to the respondents....................................................................................................33
3.9 Data Analysis.......................................................................................................................34
3.10 Ethical Considerations.......................................................................................................34
Chapter 4: Data Analysis and Discussion......................................................................................35
4.1 Introduction..........................................................................................................................35
4.2 Frequency Analysis.............................................................................................................35
Answer to Question No 1......................................................................................................36
Answer to Question No 2......................................................................................................36
Answer to Question No 3......................................................................................................37
Answer to Question No 4......................................................................................................38
Answer to Question No 5......................................................................................................39
Answer to Question No 6......................................................................................................40
Answer to Question No 7......................................................................................................41
Answer to Question No 8......................................................................................................42
Answer to Question No 9......................................................................................................43

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Answer to Question No 10....................................................................................................44
Answer to Question No 11....................................................................................................45
Answer to Question No 12....................................................................................................46
Answer to Question No 13....................................................................................................47
Answer to Question No 14....................................................................................................48
Answer to Question No 15....................................................................................................49
Answer to Question No 16....................................................................................................50
Answer to Question No 17....................................................................................................51
Answer to Question No 18....................................................................................................52
Answer to Question No 19....................................................................................................53
4.3 Descriptive Statistics...........................................................................................................54
4.4 Correlation...........................................................................................................................57
4.5 Discussion............................................................................................................................59
Chapter 5: Conclusion, Recommendation and Future Work.........................................................61
5.1 Conclusion...........................................................................................................................61
5.2 Addressing the Objective.....................................................................................................62
5.3 Recommendation.................................................................................................................63
5.4 Future Work.........................................................................................................................63
Reference List................................................................................................................................64
Questionnaire.................................................................................................................................73

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Section A...................................................................................................................................74
Section B....................................................................................................................................75
Section C....................................................................................................................................78

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Chapter 1: Introduction
The changes that are taking place in the global economy have steered to the development
of innovative technologies, which are helpful in the development functional activities of a
company. There are numerous computerised accounting systems that have been helpful in
ascertaining the financial transactions. The maintenance of the financial transactions can be
helpful in creating the financial statements that can be used in the future course of time and
thereby understand the financial scenario of an organization. The incorporation of the
computerised accounting system is a process with the help of which financial reporting can be
done in a precise manner and even reduces the chances of any miscalculations if done manually
(Ismail and King, 2014). This research thesis is therefore constructed in order to have an
understanding of the effect of the “computerised accounting system” in the financial
documenting of the small and medium enterprises in Maldives. There are several small and
medium companies available in the economy of Maldives and therefore impact on the financial
reporting of these companies by making use of the computerised accounting system can be
understood. A total of five small and medium enterprises of Maldives have been taken into
consideration who have incorporated computerised accounting system in order to have
knowledge of the effect of financial reporting in these organizations.
1.1 Background of the Study
Accounting has been looked upon as a key part of any business that is useful for small
and large profit making organizations. There are several organizations that undertake their
process of accounting manually and even feel satisfied. The other companies may be looking for
computerised accounting process as the software related to accounting are reasonable and
affordable (Diatmika, Irianto and Baridwan, 2016). The computerised and manual system of

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accounting basically performs similar mechanisms, the accounting concepts and principles are
even similar with the difference being in the process technicalities (Smith and BintiPuasa, 2016).
It is seen that the computerised accounting system is a bit expensive in accordance to manual
accounting process bit their advantage is reliant on the speed and thereby being able to record
and gather information.
“Small and Medium Enterprises” (SMEs) are accounted for by deciding the number of
employees and the amount of revenue generated by a company. In order to define a small and
medium enterprise, these two factors must come under a specific standard that is held by the
respective nation. The small and medium enterprises do not have adequate amount of resources
unlike the large organizations, the essence being entrepreneurial and hence they are significant to
the development and innovation of the economy of the country (Seethamraju, 2015). This is due
to the fact that the SMEs have less capital in accordance to the companies that are functional at a
beiger stage and therefore have the ability to incorporate changes and develop their business
accordingly.
Over the previous decade, there has been remarkable development of SMEs in the
developing countries. There are several researchers who have looked at SMEs as an effective
substitute to the governmental agencies in receiving the assistance and the services to the ones
who are in need of it especially in the nations that are pressured by the political corruption and
favouritism (Azmi et al., 2016). These activities have been fundamental in the development of
the SMEs and the influence of the SMEs to incorporate new and innovative computerised
accounting services.
In accordance to Azmi et al., (2016 p: 13). Accountability explains the scenario within
which the function holder provides account to the other so that decisions may be undertaken

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about the performance adequacy. Amin and Mohamed,(2016p:132) cite accountability not only
for the purpose of reporting but even the explanation of the performance, they even sustain to
explain the accountability as the explicit and implicit expectations that any one of them will be
asked upon in order to clarify the feelings, belief and actions of a person towards other. The
process of computerization safeguards time in accordance to the level of transaction thereby
leading to financial reporting quality for example accurate, timely and dependable data that can
be created. This is the necessity for undertaking the study.
1.1.1 Computerised Accounting System
The process of computerised accounting is the implication of the computer dependent
software utilised to process, “input” and “store” and “output” of the accounting information. This
software is in assistance of the developing technology which aids the companies to make use of
the “computer programs” in order to conduct the jobs that were manually done in the earlier time
period. A computerised accounting process hence associates with the accounting information
system which is generated in order to assist the process of decision making (Cleary and Quinn,
2016). These are related with various numbers of benefits like the tenacity of undertaking the
routine transactions, quick assessment, timeliness, reporting and accuracy.
According to Germann and Manasseh,(2017p: 51) an accounting system comprises of the
business records, statements, reports and the procedures that are utilised by a company in order
to record the transactions and examining the impacts. Albu et al.,(2016 p: 178) addresses the fact
that an accounting process is a technique of maintaining a manual record of all the transactions.
The earnings are provided for all the received money by a company and the earnings are asked at
any time when expenses are undertaken with the money. Accountability for the SMEs is both an
ethical and legal accountability for the company that utilise the resources that is received to

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expand their level of investment and accountability covers an entire report of the operations
along with the justification for the process with the help of which the resources are monitored.
1.1.2 Quality of the Financial Reports
Financial statement is a process of portraying the financial accountabilities for the
purpose of the reviewing the financial operations of an organization of the previous years and
construct plans for the coming future in order to publish and prepare the yearly accounts or the
financial statements. Ruivo, Oliveira and Neto,(2014 p: 184) explained financial reporting as the
mechanism of providing the financial data which is complete, accurate and dependable to the
stakeholders in order to undertake decisions related to economics. Bahri, St-Pierre and Sakka,
(2017 p: 36) have cited that financial statements are the yields of an accounting process and they
are constructed at the completion of the accounting year which is even known as the final
accounts. According to Kiliç, Uyar and Ataman,(2016 p: 178), the financial statements are
inclusive of a narrative explanation of the organizational activities and the financial reports that
are audited. Kiliç, Uyar and Ataman, (2016p: 178) have even debated that these aids the
stakeholders to observe the performance of a company and the overall financial scenario of the
company. Albu et al.,(2015:p: 178) explains that the accountants and the managers are generally
required to safeguard the outcomes that have been explained in the financial statements as a
section of the process of accountability.
According to Abrokwah et al., (2015 p: 269), timelines is a key feature of the quality of
the financial data. In order to assist the users, the financial data needs to be presented at the
correct time or else it would lose its relevancy. Relevance is even a feature of the quality of the
financial statements. Seyal and Rahman, (2015 p: 22) have focused on the fact that users must

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have the ability to compare the financial statements of the organization in accordance to time in
order to have knowledge about the patterns in the financial performance and position.
1.1.3 Effect of Computerised Accounting System on the Financial Report Quality
It is expressed theoretically that a computerised accounting process would lead to quality
and effective financial statements. The researches undertaken by Uyar, Gungormus and Kuzey,
(2017 p: 9) explain that it is easy to undertake the functions of accounting by making use of the
computerised accounting mechanisms. Kvaal, (2017 p: 157) explained that the management
cannot satisfy easily the statutory requirements of reporting like the profit or loss account,
customised reporting and the balance sheet without exploiting the computerised accounting
process. By the assistance of incorporating the system, these activities can be done very quickly
with minimum effort (Azmi et al., 2016). The computerised accounting system simplifies the
process of auditing and has enhanced accessibility to the information that is demanded payments
and other kinds of transactions which are helpful in lowering the time required to give out this
kind of data and assist in the process of documentation during the time of auditing.
The basic principles of computerised accounting system is inclusive of the all the primary
requirements of any data-base related application in the computers. It assists in simplifying,
streamlining and integrating all the organizational processes in a cost effective way and thereby
assists in revealing the actual picture of all the undertakings of the business to the financial
statement users.
Due to the fast transformations in the technology, several small businesses look to track
the financial transactions with the help of computerised software than keeping track of all the
financial operations manually with the assistance of physical ledger (Corsi, Mancini and
Piscitelli, 2017). The developments in the computerised innovations have gradually steered to the

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incorporation of the “computerised accounting system” in order to assist manufacture the precise
and the trustworthy presentation of the financial statements for the management as well as for the
external users for the determination of undertaking the decision making method.
The process of computerised accounting looks to bring in dedicated accounting software
and the “digital spreadsheets” maintain a trajectory of the business and the financial transactions
of the customers. It is an effective utilisation of the present technological developments
(Ware,2015). It has not only revolutionised the conventional papers for the process of
accounting, but has even generated new kinds of applications of accounting for the business. The
organizations now generate the overall accounting information systems that assimilate all the
operations of the business that is inclusive of the external vendors and suppliers.
The process of computerised accounting system mechanise the process of accounting
enhancing the effectiveness and lowering the level of expenses and looks to be more precise,
easy to use and less subjective to any mistakes than their manual counterparts (Malagueño,
Lopez-Valeiras and Gomez-Conde, 2017). In the current interconnected, computerised global
business atmosphere, the computerised accounting system has become the lifeline for
development in the business firms. Hence, it involves the computerisation of the accounting data
systems which is created in order to assist in the process of decision making. These are related
with several advantages and benefits like the swiftness of undertaking the routine transactions,
swift assessment, reporting, accuracy and timeliness.
1.2 Statement of the Problem
As the information tools and technologies have been developing increasingly, the
physical accounting system has slowly become insufficient for the requirement of making
decisions. Maldives is a country that has the potential of developing in terms of the global

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economy and therefore understanding the impact of computerised accounting system is essential
with the help of which the advantages in accordance to the manual accounting system can be
understood with the help of which the SMEs can incorporate the computerised accounting
system and thereby improve the financial statements and the maintenance of the financial
records. SMEs are looked upon as one of the key industries that looks to manufacture products
and services with their limited capital. Therefore, incorporation of the computerised accounting
system in the SMEs is very low and therefore it is essential to have knowledge about the impact
of computerised accounting process on the SMEs and how it can be incorporated in the same.
This is the key factor and the statement of the problem according to which the paper is being
constructed.
1.3 Research Objectives
The research objectives are to discover the effect of Computerised Accounting Systems
that have led to transformations in various aspects of the accounting practices of the SME
businesses in Maldives.
1.4 Research Question
The “research question” that have been created in accordance to this research are
explained below:
Q1. What are the key advantages and the issues related with the utilisation of “Computerised
Accounting Systems” in the financial reporting in the “Small and Medium Enterprises” in
Maldives?

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1.5 Significance of the Study
The importance of the research thesis is to give out essential data about the effect of
making use of the “Computerised Accounting Systems” (CAS) in the process of financial
documenting in the “Small and Medium Enterprises” in Maldives. This thesis will address the
massive effect and the impact “CAS” can have in the process of constructing the financial
reports. The transformation of the entire world has observed modernization as a segment of the
wider technology and thereby brings in greater benefits to the world of business in the current
time period.
1.6 Scope and Limitations of the Study
This research concentrates on evaluating the effect of the usage of “Computerised
Accounting Systems” in the process of financial reporting in the “Small and Medium
Enterprises” in Maldives. This will ascertain the probable effect of computerised accounting
process in the construction of the financial statements and how it can have an impact in the
method of decision making of an organization.
The participants who will be selected for this thesis are restricted only to the small and
medium enterprises in Maldives. The theoretical limitation has been attaining better data and
information with the help of which effective results can be attained. The conceptual limitation
refers to the discovery of the framework and the model that is ideal for this paper with the help
of which effective results can be obtained for the completion of the paper.

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Chapter 2: Literature Review
This part of the research has looked to evaluate the related studies and literature which
are associated closely to the topic of the current research thesis that is available from the local
and the foreign sources. This information has been useful to the researchers in providing certain
information and background in ascertaining the kind of approach to be utilised for this study.
The literature review that has been constructed below would be acting as supportive
information about the effect of Computerised Accounting System in the process of financial
reporting.
Da Silva Laureano, Cardoso Vieira Machado and Da Silva Laureano, (2016 p: 156)
explained that accounting is one of the oldest but are even reliable management disciplines. In
spite of its continuity and stability, accounting process has observed key transformations in the
previous decade. It is very astonishing if a decade from the current period, accounting has been
similar to today. Every organization implements the process of accounting as it is accepted
generally that the companies have to disclose definite management and financial data to the users
and due to the fact that accounting is a requisite mechanism in the process of making business
decisions. Accounting is a key segment of each organization and therefore organizations are
required to maintain effective books of accounts. Financial accounting is the art of systematic
identification, measurement, classifying, summarising and recording in a key way and with
respect to the money, events and transactions which are in a way financial in nature and
assessing, communicating and interpreting the outcomes thereafter.
Orobia, Padachi and Munene, (2016 p: 110) stated that computerised accounting system
is a process that makes use of computers to the inputs, stores, processes and outputs the
accounting data in form of financial statements. Orobia, Padachi and Munene, (2016 p: 110)

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further adds that accounting system records all the relevant transactions that frequently deal with
the circumstances that have an effect on the financial scenario and the organizational
performance.
Prasad and Green, (2015 p: 139) explained a computerised accounting system as a
process or structure with the help of which the financial data related to the transactions of a
business are organised, recorded, assessed, summarised, communicated and interpreted to the
participants by making use of computers and processes related to computers like the accounting
packages. Prasad and Green,(2015 p: 139) even stressed on the fact that it is a mechanised
method of assisting the inflow of the financial data as well as the mechanisation of the
accounting jobs like the recording of the database and construction of the reports. Prasad and
Green,(2015 p: 139) states that maintaining precise records of accounting is a key part for any
company.
However, computerised accounting system associates with the utilisation of computers in
order to monitor large quantity of data with efficiency, speed and accuracy that aims at
overcoming necessary challenges which do not transform the principles.
Hussain and Raghavan, (2017 p: 137) stated that computerised packages can rapidly
create all sorts of documents required by the management like for example budget assessment
and variance evaluations. The data analysis and processing are more precise and faster which is
able to satisfy the demands of the managers and the management for timely and authentic
information for the purpose of decision making.
Lutfi, Idris and Mohamad, (2016 p: 6) agreed with the time and the speed with the help of
which accounting is undertaken and furthermore explained that a computerised accounting

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system can construct statement of income, balance sheet and other kinds of accounting
statements at any point of time. He even agreed that “computerised accounting system” permits
the management and the managers to recognise easily and solve issues instantly.
Rikhardsson and Dull, (2016 p: 37) cited that development in the performance of a
business is an outcome of the computerised accounting system as it is a highly cohesive
mechanism that changes the process of a business with the features of performance development
which is inclusive of inventory control, statutory and reporting methods. Rikhardsson and Dull,
(2016 p: 37) even states that this aids an organization in accessing the information quicker and
undertake precise and faster decisions as it even helps in improving the level of communication.
According to López‐pérez, Melero and Javier Sese, (2017 p: 999), it is easy to undertake
the functions of accounting by utilising the computerised accounting systems. The posting of the
transactions to the ledger, the double entry principle can be mechanised by making use of the
computerized accounting process.
Falkner and Hiebl, (2015 p: 144) addressed that managers cannot easily fulfil the donor
and the statutory statement requirements like the balance sheet, profit or loss account and
personalised statements without making use of the “computerised accounting systems”. With the
incorporation of “computerised accounting system”, the process can be done in a quick manner
with minimum level of effort. Computerised accounting system simplifies auditing and have
effective access to the required data like the payments, cheque numbers and various other
transactions, which would be helpful in mitigating the time needed in order to give out this sort
of data and documentation during the auditing time.

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Klovienė and Gimzauskiene, (2015 p: 1712) addresses that there exists a challenge of
ineffective human involvement with the “computer files and computer programs”. The staffs in
the companies may fiddle with the records that are in the computers and computer programs for
the idea of intentionally altering the accounting data. This leads to the misrepresentation of the
data that would be vital for the purpose of decision making.
According to Limburg, Knowles McCulloch and Spira, (2017 p: 188), one of the
limitations and threats of computerised accounting system is the availability of computer virus. It
is known that computer virus is kind of a computer code or a program that is constructed
essentially to cause harm and damage to the computer and computer software that leads to
unbalanced behaviour in the various programs within the computer. The critical impact is that it
may create damage to the software and the hardware and thereby leading to loss of priceless
information like the data related to the customer account, past financial statements, data related
to the loans that have been allowed to others that are already recorded in the computer.
Aduamoah et al.,(2017 p: 5) explained that financial statements is the mechanism of
disclosing the financial data or the information about the financial scenario of an organization,
operating activities and their flow of funds for an accounting time period.
According to Grabinskia, Kedziora and Krasodomska, (2014 p: 281), financial statement
is associated with revealing helpful data to the users so that effective decisions can be
constructed and implemented within an organization. Kemppainen et al.,(2017 p: 21) implied
that financial documentation is the process with the help of which financial data can be used for
the purpose of assessing the transactional figures, timing and the cash flow hesitations. It is even
seen that financial reporting needs to deliver the data about the economic resources of the

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companies, the entitlements against these resources, equity of the owners and the transformations
in the claims and the resources.
Parnell, Long and Lester, (2015 p: 431) stressed that financial statements should provide
facts about the financial performance during the time when the management discharges their
accountabilities to the management and the owners. It would therefore be helpful to the
managers and the management so that they can undertake decisions on behalf of the
entrepreneurs.
In accordance to Patra and Nath, (2016 p: 41), the quality of the financial statement is
dependent on the user who is using the data and therefore should be assess in accordance to the
requirement and demand of the users. Federations of Accounting Standards Board (FASB)
explained quality to be a hierarchy of the qualities of accounting with reliability and preciseness
which is regarded as the key features while representing the verifiability, comparability,
neutrality, faithfulness, understandability and consistency which are looked upon as the
secondary features (Klimczak and Krasodomska, 2017) .
Adeyemi, Obah and Udofiaa, (2015 p: 546) explained that the data is looked upon to be
reliable and dependable if it is independent from material faults and bias and explains effectively
that it looks to disclose. In this manner effective results can be attained.
Rikhardsson and Dull, (2016 p: 37) even explains that the user needs to be able to
compare and assess the financial reports of an organization over a specific time period in order to
recognise the patterns in their financial performance and scenario. This is able to provide better
understanding and knowledge to the companies.

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Troshani, Parker and Lymer,(2015 p: 228) stresses on the fact that timeliness is another
key feature of the quality of the financial data. This ascends as an outcome of accounting data
perishability. In order to assist the users, the financial data must be disclosed at the precise time
or else the data would lose their relevance.
Yanto et al., (2016 p: 63), stated that understandability is a feature of financial
documenting that assists the users to understand the vitality of the financial data. He even
debates that the users are expected to have significant amount of knowledge about the business
and the willingness to examine and have proper understanding of the information. The
International Accounting Standards Boards further brings in that data should not be omitted on
the factor that it may be complex for few of the users to gain an understanding.
The effect of “computerised accounting system” on the construction of the financial
statements has been connected to the advantages of incorporating the computer process while
constructing the financial reports.
In accordance to Ng et al.,(2017 p: 349), the disclosure of the scheduled documents can
be simplified and triggered and constructed at systematic interval with ease. With the
implementation of computerization, construction of the financial statements would be easier as
the data can be created easily and on a frequent basis can be updated.
With the considerable rise in the frequency of transactions and rise in the demand for
actual time data, the management of the accounting information on an actual time basis has
become significant. This is attainable by utilising the computerised processes and thereby
stimulating the quality of the financial statements. Giner,hellman, Jorissen-Quagli and Taleb,

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(2016 p: 294) addresses that mechanising the general ledgers of the business, payroll and the
other related accounting jobs enhances the effectiveness of the company.
Zach, Munkvold and Olsen, (2014 p: 335) explains that computerised accounting systems
have even been acknowledged for their swift processing and large and swift storage ability. The
exploitation of the computerised accounting system aids in updating the balances of the accounts
at any time period in order to assist the management with the purpose of decision making.
Laitinen, (2018 p: 52) even explained that computerised accounting system is dependent
on the satisfaction of the end users. Salehi, Tagribi and Farhangdoust, (2018 p: 19) explained that
satisfaction of the high end users creates a positive attitude towards making use of satisfaction
and in turn developing the voluntary utilisation of the system.
Trigo, Belfo and Estébanez, (2016 p: 994) cited that the accounting information quality
and the accounting system performance is a concern for the management. A computerised
accounting system is a delivery mechanism for the accounting data with the idea of providing
authentic and dependable accounting data to the users, safeguarding the company from the
probable risks that comes out as a result of misuse of the accounting information and system
among the others. The use of the computerised accounting system is useful in assessing the
financial data and thereby providing results at a rapid pace and thereby reducing the time frame
for the purpose of accounting for any organization.
2.1 Related Studies
These studies have been relevant to the current paper because of the fact that there have
been several aspects that are similar to this paper and in the same manner results can be obtained
that would effective for the completion of the paper.

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The case study explained by Kharuddin, Foong and Senik, (2015 p: 679), he concentrated
on the cash management and computerised accounting system in the financial organizations. The
case explained the benefits, objectives and the issues related to computerisation and the process
how the cash is administered, the effect of computerised accounting on the management of cash
and even the relationship between two variables and construction of suggestions for the
stakeholders of the banks. Analytical and descriptive research was utilised to assess the
discoveries and develop conclusion related to the topic. Primary data was used and the data was
collected with the support of questionnaires and surveys. The end result from this case study
indicated that computerised accounting system have an effect on cash management and the
relationship is weak and thereby providing an negative sign to the stakeholders and to the
management that computerised accounting system single-handedly cannot administer the
organizational cash but even reinforces any other means as there are certain operations which
cannot be determined by the computers like the instances of money laundering and other
associated operations which needs strict control from the management.
There was another research that was undertaken in order to evaluate the impact and the
use of “Computerised Accounting Systems” in the financial reports of the “rural banks” in
Ghana. The paper even had another goal of addressing the issues that is faced in the usage of the
“computerised accounting system”. The development in the knowhow in the current period is the
order of the day. The companies are continually searching for cost-efficient, economic and
effective ways of fulfilling the desires of the customers. Therefore, there is a requirement for the
organizations to be aware of the present problems in the technology in order to develop their
organization. This is helpful in attaining a competitive edge over their rivals especially in the
decade where there are more banks coming into the economy (Aris et al., 2015). One of the

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process to mitigate the expenses related to the business activities is to ensure that the allocated
assets are effectively used thereby gaining optimum benefit at a minimum level of expense.
Hence, with the utilisation of the resources like “Computerized Accounting System”, it is
projected that the process of accounting will be able to create precise and pertinent reports for the
purpose of undertaking business decisions by the users. “Computerised Accounting Systems” are
hence utilised by these companies in order to create accurate and timely documents with the help
of an effective and fast assessment of the accounting data.
2.2Small and medium enterprises in Maldives
The standards for explaining “Small and Medium Enterprises” in Maldives are
fundamentally ascertained by the number of employees that are functioning within the
organization. There are numerous explanations for the small and medium enterprises globally,
but on the other hand most frequently utilised factor is the total number of employees within the
organization (Ainin et al., 2015). These parameters in most of the cases create uncertainties in
accordance to the discrepancies and the cut off points that have been used by numerous official
websites and sources.
SMEs in Maldives are increasingly looked upon as the engine for the economic
development and the creation of fortune and wealth. By gaining the right sort of assistance and
support, the SMEs can create a new flow of development and progress especially for the future
economies. The SME development is looked upon as an essential component and is a measure
for equivalent economic growth and for the development and competitive edge along with the
sturdiness of the organization.
The potential of the Small and Medium Enterprise (SME) sector in creating a more
resilient and diversified economy as well as creating more employment opportunities,

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particularly in the outer atolls. It envisages establishing the requisite institutional and
organizational mechanisms to restructure and consolidate all SME Development activities in
order to achieve economies of scale and efficiency of operations. Furthermore, it is also
exploring the option of pooling all funds allocated for development of SMEs and related
activities under the aegis of a single entity with responsibilities for providing the various services
needed for SME Development in the country across sectors (Ministry of Economic
Development, 2018)
The classification for Micro, Small and Medium Enterprises (MSMEs) in the context of
SME Law is given below:
Annual Income of Companies in Maldives
Category Full time
employees Annual Income/Turnover
Micro Enterprise 0 - 5 0 - 500,000
Small Enterprise 06 - 30 500,001 - 5,000,000
Medium Enterprise 31 - 100 5,000,001 - 20,000,000
Source: Ministry of Economic Development - SME Classification
For SME’s to be classified, it has to be registered with the ministry in some form; for
example, as Sole Proprietorship or as a Partnership or as a Company (Ministry of Economic
Development, 2018).
The other probable guiding principle that can be used in order to explain the companies
as a small and medium enterprise is the fixed asset valuation in the company. Moncayo and
Montenegro, (2016 p: 120) has explained that in certain cases the total number of employees and

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the fixed asset arrangement has been considered together for the purpose of explaining small and
medium enterprises. They explain small scale companies to be one that comprises of employees
of not more than 9 employees and the value of equipment and plants that does not exceed 10
million.
The small and medium enterprises can be segmented into rural and urban companies. The
urban organizations can be additionally segmented into unorganised and organised companies.
The organised ones are seen to comprise of a formal structure with paid employees and they have
a registered office and on the other hand the unorganised organizations mostly comprises of the
employees who function from temporal structures and open spaces and even from home and
appoints few and in certain circumstances no salaried employees (Camacho‐miñano, Segovia‐
vargas and Pascual‐ezama, 2015). They generally depend on the services that have been given by
family relatives and apprentices. The rural organizations are generally composed of small family
businesses, individual workers and women who are processing food from the local and domestic
crops. The key operations within this sector are inclusive of textile and clothing, soap making,
blacksmith, timber and mining, leather, brick manufacturing, ceramics, processing of food and
beverage, furniture, bakery and mechanics.
One significant factor is that small and medium enterprises make effective utilisation of
the resources that are limited at hand rather than the large scale organizations. There have been
several studies that have recommended that the level of production is much higher in the small
and medium enterprises in accordance to the large scale organizations. This is generally because
of the fact that “small and medium enterprises” are labour intensive and have very less amount of
investment capital at their reserve, which generally leads to increased level of productivity
(Verbano and Crema, 2016). By observing this, it has been debated that promotion of the “small

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and medium enterprise” sector in the developing nations will provide more opportunities for
employment and lead to a reasonable distribution of the national income and will make sure a
rise in the sustainable productivity with enhanced technology.
2.3Factors that influence computerised accounting system
Hussain and Hadi, (2018 p: 14) addressed that there are two roles in the maintenance of
records in order to provide the entrepreneurs with the operations of the business and a precise
and complete set in order to record the activities of the business by providing information related
to income tax which is available widely and are verifiable. An effective accounting system
provides comprehensive and accurate outcomes of the activities which permits quick comparison
among the previous and the current year data which can be used by the stakeholders in filing of
the reports and tax payment to the government.
A basic observation is explained by Krishnan and Joshi, (2017 p: 95) who have stressed
that a business being large or small must have balance accounts that includes capital, income,
liabilities and expenses. The small businesses need to maintain a track of their income, asset,
liabilities and expenses. There are several accounting software package who have introduced
icon, wizards file, interface and pre-constructed templates for multipurpose activities.
The assessment of the factors that have an impact on the incorporation of the computer,
implementation of internet, implementation of the accounting software, Pinsker and Felden,
(2015 p: 118) stated that the possibility of implementation of computers is critically affected by
the size of the business, significance of innovation and creativity, degree of education and
training the managers regarding computer. Conversely, implementation of internet is associated
positively to computer training of the managers; innovation and creativity, development and
stabilisation are negatively associated to the internal objectives. Nonetheless, the purpose to

SMEs in
Maldives
Size of the
business
Motivation
and creativity
Degree of
education
Training
Computerised
Accounting
System
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implement the accounting software is related positively to a reasonable attitude towards the
process of accounting and the objectives that have been addressed.
2.4 Conceptual Framework
The conceptual framework in accordance to this research is given as follows:
Title: Conceptual Framework for Computerised Accounting System in Maldives
Figure 1: Conceptual Framework of the paper

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The conceptual framework has been constructed in order to gain knowledge of the
variables that are related to the present research topic. There are two kinds of research variables
that are available to the researcher and they are the “independent variable” and the “dependent
variable”. The dependent variable is the aspects that is to be measured in the research and which
is affected by the evaluation. The dependent variable reacts to the “independent variable” as the
“dependent variable” relies on the “independent variable”. In this paper, the dependent variable
is the computerised accounting system and the independent variables related to this topic are the
size of business, motivation and creativity, level of education and the training that is given to the
employees in the SMEs in Maldives. All these independent variables provides an insight about
the fact that how computerised accounting system has an impact on the SMEs in Maldives. All
these variables are able to ascertain the degree of impact “computerised accounting system” have
on the functional abilities of the SMEs in Maldives.
2.5 Summary of the Literature
The literature review in accordance to the paper has looked to address the computerised
accounting system that is used globally and the suggestions that have been given with the help of
which an understanding can be attained with respect to the use of the computerised accounting
system. The review has even looked to explain the access the related studies with the help of an
understanding of the computerised accounting system in the SMEs can be known. The factors
that have an influence on the computerised accounting system can be known and thereafter
results can be known with the help of which this research paper can move forward.

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Chapter 3: Research Methodology
3.1 Introduction
The section of the “research methodology” relates with the process with the help of
which the researcher looks to collect the data that is relevant to the research topic and therefore
with the help of this data, the researcher can complete the paper in a precise manner. The
methodology of the paper consists of various segments that includes the philosophy of the
research, approach that is to be taken in the research, the design of the research, the process of
data collection, data analysis method, sampling size and techniques and other sections that would
be useful for the researcher in gathering the data and accordingly undertake the data analysis in
order to have an idea about the impact of “computerised accounting system” in the financial
documenting in the “SMEs” in Maldives. The objectives and the goals of this research paper is
framed and accordingly the review of literature is constructed with the help of which an idea can
be attained as to what kind of data is relevant for this research and the source that can be used in
order to obtain such data (Newman, 2017). This section even addresses the ethics that have been
taken into consideration with the help of which the reader can have an idea that the data collected
for the purpose of assessment are true and fair.

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3.2 Research Philosophy
The philosophy of the research considers the mechanisms and the procedures that is
significant for evaluating the impact of computerised accounting system in the SME companies
in Maldives. The research philosophy can be explained as the recommended ideologies that aid
the researcher in creating knowledge in order to attain relevant answer for this research. The
extent of the research philosophy even addresses the quality and the characteristic of the idea that
has been created. The research philosophy consists of three sorts and they are known as realism,
interpretivism and positivism. Kulik and Fletcher, (2016: p: 78) explains that research
philosophy chosen by the researcher is suitable for the thesis and is reliant on the aims and goals
of the research thesis. The positivism philosophy is exploited when the researcher tries to use the
theories and the journals that are related to the research topic and even provides certain
additional data and that are authenticated by the objectives of the research. The realism
philosophy associates with the real figures and facts that are in accordance to the current scenario
that is related to the aspect of the research that is addressed and accordingly is authenticated by
the researcher. Sullivan et al., (2014 p: 14) on the other hand, addressed that interpretivism is a
larger philosophy as it looks to define the present scenario and the information given in the
research and even addresses the psychological definition among the facts and the occurrences.
In accordance to this research, it is seen that positivism philosophy has been used by the
researcher in this research paper because of the fact that there are several aspects that needs to be
addressed by the researcher and accordingly all the elements that have an impact on the
computerised accounting system in the financial reporting of SMEs can be explained in an
explicit manner. The positivism philosophy explains the facts and figures that are available to the

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researcher and accordingly undertake the analysis with the help of which relevant answers can be
attained.
3.3 Research Approach
The approach of the research is one of the essential measures that have been exploited in
the construction of the research thesis in order to reach the real and the expected outcome for this
respective research thesis. In this respect, Shaikh and Karjaluoto, (2015 p: 666) explained that
the approach of the research aids the researcher to disclose the measures and the procedures in
order to undertake the required activities of the thesis. There are generally two kinds of research
approach that are available to the researcher and they are deductive and inductive research
approach. Busco and Quattrone,(2015 p: 1262) cited that deductive approach focuses on
assessing the structures and the theories that are accessible to the researcher and thereafter
relating them with the current paper by taking help of the data that is gathered by the researcher.
This research thesis focuses on having an understanding of the effect of the
“computerised accounting system” in the construction of the financial report of the SMEs in
Maldives and therefore the researcher has decided to make use of the deductive approach. The
deductive approach has been used in this research as the researcher will look to make use of the
current data that is available for the companies. In this respect, the researcher would look to
make use of the already existent data and thereafter take actions that would be fundamental in
discovering the results that is required by the researcher (Woods et al., 2016). It is even seen that
the researcher has exploited quantitative evaluation in order to gain the outcome for the research.
The quantitative evaluation is undertaken by assessing the responses that will be attained from
the respondents. Additionally, positivism philosophy is associated in a direct manner to the
quantitative data analysis within which the collected data has been assessed by taking assistance

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of the past trends and the theories that are present and the ideas that have been proven.
Therefore, deductive approach has been looked upon as the most ideal one for attaining the
actual result of the research thesis.
The researcher has not incorporated the inductive approach as this process take into
account new data and information that has not been used earlier. Furthermore, the researcher is
not in the idea of constructing new theories and models for completing the research paper and
therefore as the researcher would be using existing theories and models hence deductive
approach is ideal and inductive approach is not ideal.
3.4 Research Design
The “research design” assists the researcher in constructing the course of the thesis in
order to attain the specific aims that are dependent on the aims and objectives that have been
constructed earlier in this paper. Domenica et al.,(2015 p: 985) explained that design of the
research helps the researcher to provide ideas by limiting the distinct result by taking assistance
of which the remaining segments of the research thesis can be conclude. There are three kinds of
designs that are accessible to the researcher and they are “exploratory research design”,
“explanatory research design” and “descriptive research design” (Khalique et al., 2015). The
exploratory research design is implied in circumstances in order to have knowledge about the
factors that are actually the issues of the research. It mainly focuses on the knowledge related to
the research issues that directly impacts the answers related to the impact of computerised
accounting system in the SMEs in Maldives.
Explanatory research design on the other hand aids in defining the cause and effect
relationship by anticipating the future results that expected out of the procedure that is ongoing.
The descriptive research design on the other hand undertakes the exploration and the explanation

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of the issues related to the research thesis topic. It mainly helps the researcher an opportunity to
widen the field of understanding and knowledge base.
This current paper looks to provide knowledge about the factors that have an impact on
computerized accounting system in the SMEs in Maldives in accordance to the constructed
research objectives (Woods et al., 2016). Therefore, the current research provides explanation of
the factors that have an impact on the computerized accounting system in the SMEs in Maldives.
The researcher would even look to provide suggestions for reducing the problems at the end of
the research. Hence, the researcher has implied explanatory research design as the data that
would be collected would be addressed in an effective manner in order to create an
understanding of the factors that have an impact on computerised accounting system on the
construction of the financial statements in the SMEs in Maldives.
3.5 Quantitative Data
The quantitative data looks to explain a certain amount, quantity and range. This kind of
data is usually the units of measurement and it creates boundary limits to the data and even
applies numerical operations. Dwivedi et al.,(2015 p: 157) addressed that quantitative data
provides information in accordance to the aspects of the human responses with respect to the
current research paper. Therefore, it requires a distinctively extensive sample size for their
evaluation. Therefore, the respondents that have been chosen would look to answer the objective
and the research question that has been constructed in this paper. The research would be looking
to use the primary data from the employees who are functioning in the SMEs in Maldives.
3.6 Primary Data
Primary data refers to the information that is new and is collected from the selected
respondents. . A survey is undertaken with the assistance of a questionnaire where “close ended

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questions” have been forwarded to the selected respondents and accordingly results have been
obtained with the help of which analysis of the data has been undertaken. Beattie, (2014 p: 134)
stated that survey is one of the effective methods that can be exploited by the researcher so as to
gain the quantitative data as it helps in the collection of relevant data from an extensive sample
size. The questionnaire has been framed by depending on the constructed aims and objectives.
The researcher has looked to collect the data from the most reliable sources and the
responses received from the individuals. The researcher has looked to maintain data reliability by
making use of the application of software tools. In addition, the researchers have even made use
of the most reliable and valid internet sources in order to collect the data in regards to the topic.
3.7 Sample Size
The sample size addresses the number of respondents that would be exploited by the
researcher so as to undertake the primary data collection process and accordingly reach the end
result of the research thesis. The researcher is in need of adequate number of respondents and
their answers in order to undertake the process of data assessment. The employees of the SMEs
are chosen as the respondents for this research and the researcher has selected a sample size of
50 respondents out of the large population pool because of the fact that only 50 questionnaire
feedback was received out of the overall questionnaires that was forwarded with the help of
which effective level of outcome can be attained. Simple random probability sampling technique
have been undertaken by the researcher and accordingly selected respondents have been chosen
from a larger pool of sample and thereby providing all the employees with the opportunity to get
selected for the purpose of assessment (Khalique et al., 2015). Simple random probability
sampling has been selected as there are large of number of employees in the SMEs and in order

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to select a small sample, it is essential to undertake this sample technique so that partiality is not
maintained in the research.
3.8 Access to the respondents
The availability of the data in accordance to the employees is gathered by taking
assistance of the employee database of the SMEs that are operational in Maldives. The data
provided by the SMEs and the government have been used for the assessment in this paper.
3.9 Data Analysis
This is the most vital area of the research methodology section as it would provide the
tools and the mechanisms that would be undertaken with the help of which the collected data
would be gone through various techniques and accordingly the outcome of the paper can be
attained. It is seen that there are several mechanisms that are available to the researcher but the
researcher has the idea of making use of the tool that would be suitable for this paper. In this
respect, the researcher has made use of Microsoft Excel software with the help of which various
analyses like frequency, correlation and descriptive statistics would be undertaken and thereby
the results that are deemed suitable can be gathered.
3.10 Ethical Considerations
Ethics is one of the key concerns that need to be looked upon by the researcher with the
help of which precise data can be collected and authentic results can be attained. In this respect,
it is seen that the researcher has looked to maintain the code of ethics and accordingly collect
data from reliable sources so that the data is true and relevant (Karpoff et al., 2017). The use of
the data is helpful in gaining results that are suitable for the completion of the paper in a precise
manner and would even make the readers be comfortable about the fact that the results from this
paper and true and fair. Ethics has a vital role in the minds of the readers and the users and

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therefore maintenance of the ethics can be useful in creating trust and loyalty among the readers.
There exists various ethical codes that have been constructed by the national and the
international bodies and therefore the researcher tries to make use of the same and thereby true
and authentic results that can be used by researchers in the coming future.
Chapter 4: Data Analysis and Discussion
4.1 Introduction
The process of data analysis is constructed in order to evaluate the data that has been
collected with the assistance of several processes and thereby an idea can be obtained with the
help of which the paper can be completed effectively. The researcher in this paper has
undertaken frequency analysis and different other statistical tools and analysis in order to have an
understanding of the effect of computerised accounting system in financial reporting in SMEs in
Maldives.

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4.2 Frequency Analysis
In this section of the paper a detailed analysis of all the questions would be taken into
consideration in order to have an understanding of what the respondents have shared with respect
to this topic. Each of the questions is explained as follows:
It is seen that six companies have been taken into consideration and accordingly out of
them a total of 51 respondents have been selected.
Answer to Question No 1
Q1 51 5 Tally 15 Others 13.000 0.255
Quick Books 9.000 0.176
SAP 5.000 0.098
Sage 9.000 0.176
Tally 15.000 0.294
This question is related to having an understanding of the software that is used by
companies that are functioning in Maldives and it is seen that 15 of them have responded to
Tally followed by 13 people responding that other software have been used. 9 of them each have
responded to Sage and Quick Books and 5 of them have responded to the use of SAP. It is
therefore seen that Tally is mostly used by the companies.

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10%
18%
25%
18%
29%
Frequency (Q1)
SAP Quick Books Others Sage Tally
Answer to Question No 2
Q2 51 4
2-3
years
ago 20 0-1 year ago 5.000 0.098
2-3 years ago 20.000 0.392
4-5 years ago 19.000 0.373
6 and above years ago 7.000 0.137
This question is related to having knowledge about the number of years the company has
computerised the system and the results indicate that most of the respondents comprising of 20
people have said that it has been incorporated around 2-3 years ago followed by 19 respondents
who have said that it has been incorporated 4-5 years ago. 7 respondents have said that their
companies have been using computerised system for over 6 years and above and the rest of 5
people have said that computerised system has been incorporated about 0-1 years ago.

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10%
39%
37%
14%
Frequency (Q2)
0-1 year ago 2-3 years ago 4-5 years ago 6 and above years ago
Answer to Question No 3
Q3 51 7
Cost of
training 29
Initial cost of
installation 23.00 0.139
Cost Benefit Analysis 23.00 0.139
Cost of training 29.00 0.176
Knowledge of
employees 28.00 0.170
Acceptance by users 21.00 0.127
Adaptability of
workers 24.00 0.145
Other specify 17.00 0.103
This question is related to having an understanding of the factors that have been
considered while incorporating this computerised system within the company. The results that
have been obtained explains that cost of training the employees has been the most key factor that
has been identified by the respondents followed by knowledge of the employees, cost benefit
analysis and initial cost of installation. A small number of employees have suggested that the
acceptance of the users and others to the factors that have been considered.

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14%
14%
18%
17%
13%
15%
10%
Frequency (Q3)
Initial cost of installation Cost Benefit Analysis Cost of training
Knowledge of employees Acceptance by users Adaptability of workers
Other specify
Answer to Question No 4
Q4 51 5 Neutral 18 Agree 15.000 0.294
Disagree 11.000 0.216
Neutral 18.000 0.353
Strongly Agree 4.000 0.078
Strongly Disagree 3.000 0.059
This question looks to answer whether the financial reports that are prepared are
understandable properly by the users and the answers indicate that most of the respondents have
remained neutral as 18 of them responded to it and 15 of them agreed to this point and 11 of
them disagreed. 4 of them have strongly agreed and the rest of 3 people have strongly disagreed.
The results indicate that the financial statements are properly understandable.

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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
2
4
6
8
10
12
14
16
18
20
Frequency (Q4)
Categories
Frequency
Answer to Question No 5
Q5 51 5 Agree 18 Agree 18.000 0.353
Disagree 9.000 0.176
Neutral 13.000 0.255
Strongly Agree 6.000 0.118
Strongly Disagree 5.000 0.098
This question looks to answer whether the authentic information is available with respect
to the incorporation of the budget and the respondents have agreed to this point. This is due to
the fact that 18 of them have agreed, while 13 of them have remained neutral. 9 of them have
disagreed while 6 of them have strongly agreed and the rest of 5 of them have strongly disagreed.

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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
2
4
6
8
10
12
14
16
18
20
Frequency (Q5)
Categories
Frequency
Answer to Question No 6
Q6 51 5 Agree 22 Agree 22.000 0.431
Disagree 7.000 0.137
Neutral 14.000 0.275
Strongly Agree 5.000 0.098
Strongly Disagree 3.000 0.059
This question tries to answer whether the financial accountability in the SMEs can be
addressed to be adequate and the responses suggest that it is adequate as 22 of them agree to this
statement, while 14 of them remain neutral. 7 of them have disagreed to this point and 5 of them
strongly agree while 3 of them strongly disagree. This indicates that the financial accountabilities
are sufficient for the SMEs.

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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
Frequency (Q6)
Categories
Frequency
Answer to Question No 7
Q7 51 5 Agree 20 Agree 20.000 0.392
Disagree 6.000 0.118
Neutral 11.000 0.216
Strongly Agree 13.000 0.255
Strongly Disagree 1.000 0.020
This question is related to having an understanding of whether the employees who are
associated with the transactions of the SMEs are trustworthy and it is seen that the respondents
agree to this statement as 20 respondents have agreed to this point. It is seen that 13 respondents
have strongly agreed to this point. 11 of them have remained neutral and thereby indicating that
they are not aware of the answer or do not want to share the same and 6 of them have disagreed
with this statement. Only a single individual has strongly disagreed to this point.

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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
Frequency (Q7)
Categories
Frequency
Answer to Question No 8
Q8 51 5 Agree 19 Agree 19.000 0.373
Disagree 10.000 0.196
Neutral 14.000 0.275
Strongly Agree 7.000 0.137
Strongly Disagree 1.000 0.020
This question is related to having an understanding of whether the financial information
that are received from the use of the computerised system are adequate or not. The responses
indicate that as a whole the respondents agree to this statement as 19 of them have responded to
it. 14 of them have looked to remain neutral while 10 of them disagree to this point. 7 of them
strongly agree and only one individual strongly disagree. Therefore, it can be said that the
financial information that is received is adequate.

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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
2
4
6
8
10
12
14
16
18
20
Frequency (Q8)
Categories
Frequency
Answer to Question No 9
Q9 51 5 Agree 25 Agree 25.000 0.490
Disagree 4.000 0.078
Neutral 14.000 0.275
Strongly Agree 6.000 0.118
Strongly Disagree 2.000 0.039
This question looks to answer whether the financial reports that are disclosed with the
help of the computerised system is helpful for the users for the purpose of decision making and
the results indicate that the financial statements are helpful for making decisions because of the
fact that 25 of the respondents agree to it. 14 of the others have remained neutral while 6 of them
strongly agree. It is seen that 4 of them disagree to this statement while 2 of them strongly
disagree.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
30
Frequency (Q9)
Categories
Frequency
Answer to Question No 10
Q10 51 5 Agree 22 Agree 22.000 0.431
Disagree 4.000 0.078
Neutral 18.000 0.353
Strongly Agree 6.000 0.118
Strongly Disagree 1.000 0.020
This question looks to have an understanding of whether the accounting system that is
used in the SMEs are computerised or not. The results indicate that the accounting system that is
used in mostly computerised because of the fact that 22 of them agree to this point and on the
other hand 18 of them remain neutral. This indicates that they are not aware of the same. 6
respondents strongly agree to this statement while 4 of them disagree to this point. Only a single
respondent has strongly disagreed to this point.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
Frequency (Q10)
Categories
Frequency
Answer to Question No 11
Q11 51 5 Agree 22 Agree 22.000 0.431
Disagree 6.000 0.118
Neutral 14.000 0.275
Strongly Agree 8.000 0.157
Strongly Disagree 1.000 0.020
This question is related to gaining an understanding of whether the SMEs are reliant on
the computerised accounting system in order to record any kind of data. It is seen that SMEs are
reliant on the computerised system in order to record the data as 22 of them have agreed to this
point. On the other hand 14 of them have remained neutral and 8 of them have strongly agreed. It
is seen that 6 people disagree to this point and only one person has strongly disagreed to this
point.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
Frequency (Q11)
Categories
Frequency
Answer to Question No 12
Q12 51 5 Agree 18 Agree 18.000 0.353
Disagree 8.000 0.157
Neutral 15.000 0.294
Strongly Agree 7.000 0.137
Strongly Disagree 3.000 0.059
This question is related to having an understanding of whether the computer software that
is used by the SME is sufficient and effective. The results have indicated that these systems are
effective because of the fact that 18 of them have agreed to this point. It is seen that 15 of them
have remained neutral and 7 of them strongly agree to this point. The rest of the respondents
comprising of 8 people have disagreed while the remaining 3 have strongly disagreed.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
2
4
6
8
10
12
14
16
18
20
Frequency (Q12)
Categories
Frequency
Answer to Question No 13
Q13 51 5 Agree 19 Agree 19.000 0.373
Disagree 3.000 0.059
Neutral 17.000 0.333
Strongly Agree 11.000 0.216
Strongly Disagree 1.000 0.020
This question looks to answer whether the companies make extensive use of the
accounting software that has been selected. It is seen that 19 of them have agreed to this proposal
and a bigger percentage of 17 people have remained neutral. 11 people have strongly agreed and
the rest of the people comprising of 3 people have disagreed and a single individual has strongly
disagreed.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree Strongly Disagree
0
2
4
6
8
10
12
14
16
18
20
Frequency (Q13)
Categories
Frequency
Answer to Question No 14
Q14 51 5 Agree 25 Agree 25.000 0.490
Disagree 2.000 0.039
Neutral 16.000 0.314
Strongly Agree 7.000 0.137
Strongly Disagree 1.000 0.020
This question tries to figure out whether the computerised accounting system aids in the
process of financial management. It is seen that 25 of the respondents have agreed to this point
explaining that these computerised accounting systems facilitates the process of financial
management. It is seen that 16 of them have remained neutral and thereby explaining that
whether they do not want to answer or are unaware of this question. 7 of them have strongly
agreed while 2 of them disagree and one of them strongly disagrees. Therefore, it can be said that
computerised accounting system is helping in the development of financial management.

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FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
30
Frequency (Q14)
Categories
Frequency
Answer to Question No 15
Q15 51 4 Agree 26 Agree 26.000 0.510
Disagree 6.000 0.118
Neutral 12.000 0.235
Strongly Agree 7.000 0.137
This question looks to discover whether computerised accounting system have a positive
effect on the performance of the “SMEs”. The responses that have been gathered states that these
accounting systems have positive effect on the SME’s performance because of the fact that 26 of
the respondents have agreed to this point. 12 of them have remained neutral while 7 of them
strongly agree. The remaining 6 of them have disagreed and no responses have been received for
strongly agree.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
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Agree Disagree Neutral Strongly Agree
0
5
10
15
20
25
30
Frequency (Q15)
Categories
Frequency
Answer to Question No 16
Q16 51 5 Agree 27 Agree 27.000 0.529
Disagree 5.000 0.098
Neutral 9.000 0.176
Strongly Agree 6.000 0.118
Strongly Disagree 4.000 0.078
This question looks to answer whether the computerised accounting system is user
friendly or not and it is seen that 27 of them agree to this point and on the other hand 9 of them
remain neutral. 6 of them strongly agree and 5 of them disagree. Only 4 of them strongly
disagree. The results have indicated that these accounting systems are user friendly in nature.

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Agree Disagree Neutral Strongly Agree Strongly Disagree
0
5
10
15
20
25
30
Frequency (Q16)
Categories
Frequency
Answer to Question No 17
Q17 51 4 Agree 25 Agree 25.000 0.490
Disagree 4.000 0.078
Neutral 14.000 0.275
Strongly Agree 8.000 0.157
This question tries to discover whether the computerised accounting system is able to
enhance the effectiveness of the data and thereby lead to the reduction in the mistakes in the
financial statements. The results indicate that the effectiveness of the data has been increased and
the extent of errors have reduced as 25 people have agreed to this statement while on the other
hand 14 of them have remained neutral. 8 of them have strongly agreed and the rest of 4 people
have disagreed to this point.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree
0
5
10
15
20
25
30
Frequency (Q17)
Categories
Frequency
Answer to Question No 18
Q18 51 4 Agree 24 Agree 24.000 0.471
Disagree 4.000 0.078
Neutral 12.000 0.235
Strongly Agree 11.000 0.216
This question is associated to the leadership aspects and therefore looks to address
whether the SMEs effectively monitor all the transactions that they are undertaking and results
explain that all the transactions are effectively monitored as 24 of the respondents have agreed to
this point. 12 of them have remained neutral to this question while 11 of them have strongly
agreed to this point. The remaining 4 of them have disagreed to this statement.

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FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree
0
5
10
15
20
25
30
Frequency (Q18)
Categories
Frequency
Answer to Question No 19
Q19 51 5 Agree 19 Agree 19.000 0.373
Disagree 8.000 0.157
Neutral 15.000 0.294
Strongly Agree 6.000 0.118
Strongly Disagree 3.000 0.059
This question tries to answer whether computerised accounting system improves the
leadership style of the SMEs. It is seen that 19 of them have agreed to this point and thereby
explaining that computerised accounting system is able to enhance the leadership style of the
SMEs. 15 of them in this question have remained neutral and 8 of them have disagreed to this
point. 6 of them strongly agree and 3 of them strongly disagree.

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Agree Disagree Neutral Strongly Agree Strongly Disagree
0
2
4
6
8
10
12
14
16
18
20
Frequency (Q19)
Categories
Frequency
The results that have been obtained from the frequency analysis explains that
computerised accounting system is an effective system for the SMEs in Maldives and this has
been able to improve the quality of the financial statements as well as enhance certain aspects of
the business performance.
4.3 Descriptive Statistics
The process of descriptive statistics looks to address the all the questions that have been
considered in this paper and thereby gain access of the mean and standard deviation of all the
questions. The descriptive statistics are taken into deliberation in order to explain the basic
features of the data that has been considered in a study. It provides a simple overview about the
measures and the samples. This statistics therefore forms the base for every kind of quantitative
data analysis. The table that is given below explains the descriptive statistics for this paper.
Statistic
Nbr. of
observatio
ns
1st
Quartil
e
Media
n
3rd
Quartil
e Mean
Standard
deviation (n-
1)

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Section A
The financial reports
disclosed are understandable
clearly by the users 51 2 2 4
2.76470
6 1.176235271
There is adequate authentic
information on budget
incorporation 51 2 2 4
2.96078
4 1.295542887
The financial accountability
in the SMEs can be explained
as sufficient 51 2 4 4
3.09803
9 1.220735876
The employees concerned
with the transaction of SMEs
are trustworthy 51 2 4 4.5
3.52941
2 1.254638453
The employees concerned
with the transaction of SMEs
are trustworthy 51 2 4 4
3.13725
5 1.216874814
The financial information are
adequate 51 2 4 4
3.29411
8 1.188177052
The financial reports that are
disclosed provide authentic
information for the users for
the purpose of decision
making 51 2 4 4
3.19607
8 1.183547343
The accounting system
utilized in SMEs are
computerised 51 2 4 4
3.31372
5 1.208142311
The SME relies on the
computerized system in order
to record the data 51 2 2 4
3.05882
4 1.271404966
Section B
The computer software used
by the SME is effective and
sufficient 51 2 4 4
3.37254
9 1.264290858
The companies make
extensive use of the
accounting software package
that has been selected 51 2 4 4
3.37254
9 1.165517641
The computerized accounting
system facilitates the process
of financial management 51 2 4 4
3.43137
3 1.118121674
Computerized accounting
system has a positive impact 51 2 4 4
3.33333
3 1.227463509

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
on the performance of the
SMEs
The computerized accounting
system (CAS) are user
friendly 51 2 4 4 3.45098 1.136903259
CAS enhances the level of
data effectiveness and
reduction in errors in the
financial statement 51 2 4 4
3.58823
5 1.151980392
Section C
The SMEs efficiently
monitors all the transactions
that they undertake 51 2 2 4
3.03921
6 1.248371488
The computerized accounting
system improves the
leadership style of the SMEs 51 2 2 4
3.01960
8 1.272638143
The table has segmented the questions based on the variables that the questions look to
answer. The results that have been obtained indicate that in Section A all the questions have their
mean value encompassing between 2.76 to 3.5. This indicates that the answers that have been
obtained having moving in between the values of agree and neutral that has been constructed in
the question paper. The standard deviation of these questions has been close to 1 and thereby
explaining that all the data is closely related to each other and has not been significantly
dispersed.
The results that have been obtained for Section B of the questionnaire addresses that the
mean value is between 3.3 to 3.5, which is a manner explains that the respondents have answered
the questions in a positive manner and the value of the standard deviation close 1 indicates that
the data are not spread out entirely.

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The data that has been observed for Section C addresses that mean has been close to 3
and the standard deviation is closer to 1 and thereby all the questions that have been answered
provide suitable results and answers for this paper.
4.4 Correlation
Summary Statistics
Variab
le
Observatio
ns
Obs.
with
missin
g data
Obs.
witho
ut
missin
g data
Minimu
m
Maximu
m Mean
Std.
deviatio
n
Sectio
n A 51 0 51 2.000 5.000 3.235 1.124
Sectio
n B 51 0 51 2.000 5.000 3.422 1.055
Sectio
n C 51 0 51 1.000 5.000 3.029 1.088
This table provides a summary and the aggregate of the results of the descriptive statistics
that have been explained in the table earlier.
Correlation Matrix
Variable
s
Section
A
Section
B
Section
C
Section
A 1 0.581 0.558
Section
B 0.581 1 0.520
Section
C 0.558 0.520 1

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The correlation table looks to address the relationship among all the variables that are
taken into consideration in this paper. The table explains Section A has positive and strong
correlation with Sections B and C and in the similar manner Section B has positive and strong
correlation with Section A and C. Section C on the other hand has positive and strong correlation
with Section An and B and thereby indicating that all the questions within these three sections
are mutually related to each and other and their positive values indicates that precise and proper
results will be attained.
Scatter Plots
1.5 2 2.5 3 3.5 4 4.5 5 5.5
0
1
2
3
4
5
6
Section B
Section A

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0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
0
1
2
3
4
5
6
Section C
Section A
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
0
1
2
3
4
5
6
Section C
Section B
4.5 Discussion
The completion of the process of data analysis is helpful for the determination of the
results that is required by the researcher and the analysis of the data indicates that computerised

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accounting system is an effective tool that is able to improve the financial recording standards of
the SMEs in Maldives. The results that have been obtained explains the fact that computerised
accounting system have a positive effect on the financial documentation of the SMEs as it is seen
that there is a rise in the development of the leadership style as well as the monitoring style over
the financial statements and the reports. The errors in the financial reports are minimised and the
effectiveness of the data is useful for the determination of the better process of making decisions
among the management of the companies. The financial information that is available in the
financial statements are adequate and precise and thereby is helpful to the users. On an overall
view, it can be said that there exists a positive impact of “computerised accounting system” on
the financial documenting of the SMEs and thereby several measures and steps need to be taken
with the help of which these aspects can be developed in an effective manner.

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Chapter 5: Conclusion, Recommendation and Future Work
5.1 Conclusion
This is the final section of the thesis and this section looks to draw the conclusion that is
attained from the analysis of the data. The paper from the beginning has looked to create a
background of the study with the help of which an understanding of the background of Maldives
as well as the history of computerised accounting system and how it has transformed itself with
the changing time have been addressed. The problem statement has been provided in order to
highlight on the aspects that requires additional attention. The discovery of the problem
statement leads to the creation of the research objectives and the questions with the help of which
the researcher create an action with respect to which the analysis can move forward and
accordingly precise and effective results can be attained. The significance of the research is even
constructed so that the readers have an idea about the validity and the significance of the
research.
The literature review that has been framed for this paper has the intention of addressing
the factors and the associated variables that have been discovered by the other researchers who
have undertaken research on similar topics. The literature therefore highlights several areas that
are related to the computerised accounting system and has even undertaken a comparison with
the related studies in order to discover the changes that have taken place with the advent of time

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and technology. Ideas about the small and medium enterprises that are operational in Maldives
have been provided with the help of which the general operational activities of the company can
be attained in an effective manner. The various factors that have an influence on the
computerised accounting system have even been explained.
The research methodology section of the paper has looked to discover the suitable data
that would be helpful in the assessment of the problems that have been discovered and thereby
attain appropriate results in order to complete the paper in a precise manner. It is seen that the
researcher has chosen primary data for this paper as the responses that have been received from
the employees who are functioning in the SMEs in Maldives will be helpful in understanding the
impact of computerised accounting system in the SMEs in Maldives. The researcher has chosen
six SME companies of Maldives and has selected the respondents from their employees. The
data collected from the respondents have been possible with the help of survey questionnaires
and the collected data is used for the intention of data exploration. The results that have been
attained needs to be compared in order to have an understanding of whether they are able to
answer the research objectives.
5.2 Addressing the Objective
The research objective of this thesis has been to discover the impact of “Computerised
Accounting Systems” that have led to transformations in various aspects of the accounting
practices of the SME businesses in Maldives. The results have indicated that Computerised
Accounting Systems have a positive role to play with the help of which the development of the
operational activities of the SMEs are improved and accordingly errors that were available in the
financial statements have reduced. It is even seen that effective level of decision making is
possible with the help of the “Computerised Accounting Systems”. This system even maintains

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track and record of all the financial transactions that are taking place and is even user friendly
thereby assisting the better level of work from the employees. Hence, in accordance to the
objective, it can be said that “Computerised Accounting Systems” has a positive impact on the
financial reporting of the SMEs in Maldives.
5.3 Recommendation
It is essential to provide certain suggestions by looking at the results that have been
gathered from this research paper. It is recommended that proper monitoring of the activities that
are done with the Computerised Accounting Systems is undertaken in order to restrict any kind
of false input of data in the system. It is even recommended that incorporation of the
Computerised Accounting Systems should be evaluated in order to have an understanding of
impact of the transformations that these systems have been able to provide in order to preserve
proper and much better financial statements. The positive outcomes that these transformations of
the accounting systems have given out needs to be utilised by the management with the help of
which better functional activities can be performed by the SMEs.
5.4 Future Work
The research that is undertaken has the scope of future work because of the fact that new
and improved Computerised Accounting Systems will be introduced with the advent of time and
the development of science and technology and therefore researches in the future would be
helpful in determining the fact that whether the Computerised Accounting Systems have changed
for the good or the bad for the economy. A comparison can be made for the impact it would have
in the future period on the SMEs and what sort of changes that have taken place with respect to
the current time period can be known in an effective manner. The future works will be helpful in
eliminating the limitations that have been observed in the current research paper.

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Questionnaire
Title: The Impact of Using Computerised Accounting Systems in the Financial Reporting
among SMEs in Maldives
INTRODUCTION
My name is Ali Irufan. I am a student at the University of the West of England (UWE). I have
prepared this questionnaire for the purpose of collecting data on a research work titled: ― “The
Impact of Using Computerised Accounting Systems in the Financial Reporting among SMEs in
Maldives” in partial fulfilment for the award of a Master’s Degree in Business Administration.
Please tick or circle where appropriate.
Q1. Computerized accounting software package used in this organization
 Quick Books
 SAP
 Sage
 Tally
 Others Specify ………………………………………………..
Q2. When did the Organization computerize the systems?

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
 0-1 year ago
 2-3 years ago
 4-5 years ago
 6 and above years ago
Q3. Factors considered in choosing the above accounting software? Please tick as many as possible
 Initial cost of installation
 Cost Benefit Analysis
 Cost of training
 Knowledge of employees
 Acceptance by users
 Adaptability of workers
 Other specify_______________________________________
Section A
Quality of
Financial
Reports
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
The financial
reports
disclosed are
understandable
clearly by the
users

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
There is
adequate
authentic
information on
budget
incorporation
The financial
accountability
in the SMEs
can be
explained as
sufficient
The employees
concerned with
the transaction
of SMEs are
trustworthy
The financial
information are
adequate
The financial
reports that are
disclosed
provide
authentic
information for
the users for
the purpose of
decision
making

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
Section B
Computerised
Accounting
System
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
The accounting
system utilised
in SMEs are
computerised
The SME relies
on the
computerised
system in order
to record the
data
The computer
software used
by the SME is
effective and
sufficient

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
The companies
make extensive
use of the
accounting
software
package that has
been selected
The
computerised
accounting
system
facilitates the
process of
financial
management
Computerised
accounting
system has a
positive impact
on the
performance of
the SMEs
The
computerised
accounting
system (CAS)
are user friendly

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THE IMPACT OF COMPUTERISED ACCOUNTING SYSTEMS (CAS) IN THE
FINANCIAL REPORTING AMONG SMES IN MALDIVES
CAS enhances
the level of data
effectiveness
and reduction in
errors in the
financial
statement
Section C
Leadership Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
The SMEs
efficiently monitors
all the transactions
that they undertake
The computerised
accounting system
improves the
leadership style of
the SMEs