Influence of Accounting Practices in Small and Medium Enterprises

This study examines the influence of accounting practices on small and medium enterprises (SMEs) in different regions around the world. It investigates the role of accounting practices in SMEs and the benefits they expect from professional accountants. The study uses a descriptive survey design and a sample of 100 respondents. The data is gathered through well-prepared questionnaires and face-to-face interviews. The study aims to provide insights into the impact of accounting practices on SMEs.

Influence Of Accounting Practices In Small And Medium Enterprises 1
INFLUENCE OF ACCOUNTING PRACTICES IN SMALL AND MEDIUM ENTERPRISES
Name:
Institution:
Course:
Tutor:
Date:

Influence Of Accounting Practices In Small And Medium Enterprises 2
Abstract
Small alongside medium enterprises act as the backbone of every business and commerce
by creating several entrepreneurs, involving different stakeholders, creating job opportunities for
a skilled and half skilled workforce. The main purpose of this survey is to determinant how
accounting practices influence operations of small alongside medium enterprises (SMEs) in
different regions around the global community. The primary research inquiry of this examination
includes: What is the role of accountant practices in SME’s? and what kind of benefits, SME’s
expect from professional accountants? The use of descriptive survey design will be embraced for
the survey. Besides, targeted population for units used in this study will include a population of
130 SMEs as respondents and a sample of 100 respondents will be used in this survey. Data
present in the Ministry that deal with trade along with industrialization will be used to include 60
SMEs in the manufacturing sector, 25 SMEs in trading sectors, together with 15 SMEs in the
service centers will be used. The use of stratified sampling technique will be applied as a way of
determining the sample size of one hundred from entire population in the research. For this
examination, vital information will be gathered by well-prepared questionnaires founded on
identified survey questions supplemented by follow up face to face interview. Besides,
descriptive statistics will be used during the analysis process..
Research problem
In most countries such as in Australia, SMEs sectors are considered as major contributors
to financial stability. These enterprises provide income along with employment to a major
portion of people in most nations. The different survey has reported that SMEs contribute to over
seventy per cent of newly created jobs in a single year (Zotorvie 2017). Despite the importance

Influence Of Accounting Practices In Small And Medium Enterprises 3
of SME in different regions, different surveys have recorded that three out of five business
operations fail within three years after their establishments (Cuzdriorean 2017). For instance,
failure in operations of SMEs results in loss of occupations and then results to increase in
instances of insecurity, depleted liquidity in market, as well as declined financial progress.
Research question
The study has the expectation of finding appropriate answers to several questions under
investigation. Some of the important research question in this examination comprises of;
i. What is the role of accountant practices in SME’s?
ii. What kind of benefits, SME’s expect from professional accountants?
Hypothesis
In reference to literature work, this examination target at offering deal answers on impact of
accounting operations on operations of SMEs. This proposal of the survey will aim ate checking
the subjected hypotheses with the aim of attaining the best conclusion on the issue under
examination.
First Hypothesis
H0: Accounting practices influence the operations of SMEs.
H1: Accounting practices do not pose any impact on operations of SMEs.
Hypothesis 2
H0: Accounting practices influence the cost reduction in operations of SMEs

Influence Of Accounting Practices In Small And Medium Enterprises 4
H1: Accounting practices do not pose any impact on the reduction in cost in operations of
SMEs
Delimitations and limitations
The application of a specified test remains as big restriction in this survey. The study only
focused on a particular number of SMEs while there are various enterprises around the
Australian community. Such ideas might be ineffective in attaining the appropriate solution on
whether accounting activities impact the operations of SMEs. Due to time constraint in
conducting the research in this diverse field that involves many enterprises make it tough for the
surveyor to attain an effective outcome (Haider, Munajat, and Kamarulzaman 2013). The study
requires huge sum of funds in order for plan to attain its completion.
Background
It is clear from most researches that SME plays a fundamental purpose in the economy
especially for countries that are still developing as well as economically emerging states.
Different accounting operations of SMEs do not necessarily provide complete as well as
pertinent financial data required to improve financial choices made by various business operators
(Asirah 2018). It has been noted with a lot of concern that the majority of SMEs around various
markets such as in Australia does not maintain comprehensive accounting reports. The lack of
appropriate documentation of accounting by such enterprise does arise because of lack of
effective knowledge of accounting. Besides, most SMEs fail to prepare financial records at all
during their operations, hence, the financial assessment is not done as a result. Therefore, all
these instances within the operations of SMEs have to lead to the primary target of this research
proposal. The chief target is thus to investigate the impacts of accounting activities within SMEs

Influence Of Accounting Practices In Small And Medium Enterprises 5
(Hawari and Nassar 2018). Moreover, accounting practices and system remain to be the
methodical, well-structured technique for long accurate financial data and controls. The use of
accounting in different operations of SMEs help in sowing the books, statements, files, vouchers,
and other supporting information that result from the use of different processes of accounting.
For instance, in Australia, there are over 100 SMEs (R, Ali, and MS 2017). Among these
enterprises, researchers have shown that a huge number of businesses do not use accounting
practices.
Ethical consideration
Ethics consideration in this research on the influence of accounting on SMEs stays to be
the different collection of guidelines. These regulations govern expectations of different
individual’s together with behaviors of either respondent or interviewer during the exercise of
carrying out the investigation. Ethics in this research work are crucial as it forms the part of the
investigation. Such issues of ethics determine different to do and don't before, during, and after
investigation (Glattke 2017). For instance, there is an important need to respect every
individual’s opinion pertaining to their views on impact of accounting activities on the
operations of SMEs. Therefore, this issue ensures that every respondent is not in any way ready
to receive a subjection to harm in the process of investigation. There is an ethical consideration
of attaining the consent of the respondent. For instance, each and every respondent and
interviewer must have consent before starting the examination. The consent must be obtained
before the investigator can be able to administer a questionnaire to respondents to answer
questions. Besides, the protection of the identity of every respondent is an important ethical
consideration in this study. The protection of identity will ensure that each and every participant
that wishes to take part in the study are unworried about their views that they will air out on how

Influence Of Accounting Practices In Small And Medium Enterprises 6
accounting practices affect operations of SMEs in any region of their interest (Glattke 2017).
Through appropriate consideration of above ethics, the surveyor can be able to obtain much-
needed data for the examination.
Literature review
This section of research proposal represents the foregoing reflected studies of the
accounting system from pros as well as cons corner of assessment. It is evident from SMEs
sectors are progressively termed as essential engine useful in the development of employment as
well as advancement in the economy. The issue has been demanded by increasing knowledge
within authority that massive schemes in industrial area are less probable to produce necessary
chances of employment given an enhanced concentration of capital of yield in the sector.
Moreover, accounting practices have been viewed to be the critical element for the financial
presentation of SMEs (Tabot and Kamala 2016). Limit to accounting practices hinder advance
operational charges than larger ventures in attaining recognition. Additionally, poor management
practices along with accounting practices are also some of the major factors that hinder the
financial performance of these firms. Accounting practices, for instance, hamper the capacity of
SMEs to increase finance. Asymmetries of data linked with loaning to borrowers that borrow on
small portion have a limited stream of finance to smaller corporations. Despite all these assets,
some other examinations have suggested that a huge number of SMEs are unsuccessful because
of non-economical purposes. Du, Jiang, and Ji (2017) noted that poor accounting practices that
result in deprived record maintenance are chief contributors to letdown of SMEs. It was
suggested by Abimbola and Kolawole (2017) that inadequate fundamental business
administration practices with abilities needed for record keeping lead to failure in operations of
SMEs around different nations.

Influence Of Accounting Practices In Small And Medium Enterprises 7
Practices of accounting along with economic reporting of SMEs
In most fields, regulations require various SMEs to set up different monetary records and
regularly have them reviewed from time to time. In most instances, financial practices are
categorized with authority, positioned on different online sites or prepared ready upon request.
Ahmad (2013), all corporations are needed to maintain appropriate reports of financial
statements in fulfillment with companies act. The organization has the mandate to prepare and
submit tax authority to different governments with an agreement with several pieces of
legislation of tax. Examination by AlKhajeh and Azam (2018) concludes that different
governmental policies are primary drivers as to why different SMEs need to organize economic
records.
Tabot and Kamala (2016) conclude their study by reporting that amount of accounting
exercises in SMEs is reliant on number of working environmental elements that comprise of
business size together with an alliance of industry. It is further reported that most owners, as well
as directors of SMEs, connect with public accountants to organize much-needed data as directors
look for extra data, but to a restricted degree. Research by R, Ali, and MS (2017) ends by
indicating that advancement of resonance accounting data structure within SMEs relies greatly
on quantity of accounting skill of owners of the firm. Glattke (2017) and Mbogo (2017) had a
common view that SMEs use specialized accounting for researching for yearly information and
for different requirements of accounting. Haider, Munajat, and Kamarulzaman (2013) on their
part agreed that expert accountants need to make their operations to comprise of graphics
arrangements and explanation of amount in economical records. It was recorded by Abimbola
and Kolawole (2017)that high charge of hiring accountants leaves SMEs owners or managers
with little or no alternative but to consign accounting administration of data. Zotorvie (2017)

Influence Of Accounting Practices In Small And Medium Enterprises 8
proposed that the application of software of bookkeeping by directors in SMEs to enhance
operations of accounting. Such practices are improved but creators of accounting software are
about to create another medium-sized application for SMEs.
The previous investigation of the user of economical records in SMEs exposed that
different proprietors, tax systems, managers, and borrowers are chief consumers. As recorded by
Du, Jiang, and Ji (2018), contemporary assessment is recording that number of different
consumers of accounting practices and data within SMEs is improving. The increase is with the
aim of including venture entrepreneurs alongside clients in different chains of supply. Moreover,
Tabot and Kamala (2016) in their study concluded that accounting practices together with
marketing pose a huge challenge to the management of SMEs. The study further recommends
that the management of SMEs need to learn how to use accounting or hire specialists in order to
improve their competitiveness while using different accounting practices. The conventional
accounting reporting according to Hawari and Nassar (2018) plays a significant purpose in
operations of SMEs. However, it is also reported that operational records need to be altered in
order for them to be used. There is a need for the management of such enterprises of proposes
the proper application of cases basics more willingly than accruals foundation. Some authors
such as Tabot and Kamala (2016) have argued that financial recording ideas within SMEs seem
to fail to be dictated by several external economical recording necessities that are present for
their operations for them.
Aim or objectives of the research
The chief target of this examination is to examine influence of accounting operations in SMEs.
Other precise aims of this research work comprise of the need;

Influence Of Accounting Practices In Small And Medium Enterprises 9
 To investigate the manner in which accounting practices influence operations of
SMEs around different markets
 To examine benefits that the accounting practices have on activities that relate to
operations of SMEs.
Methodology
This section comprises the description of different procedures and techniques that will be
utilized in conducting this survey. It consists of the report of effective research methodology to
be used, the population of the study. The section also comprises of different sampling
techniques, method of gathering data, as well as techniques of analyzing data.
Design of research
This survey will be managed via descriptive case examination research plan. This plan
will be appropriate as it will permit for the thorough examination of different aspects that impact
financial presentation of SMEs. As stated by Sousa (2014), a case study in research work
consists of a careful as well as an inclusive examination of the societal unit, family, foundation,
entire group, or ethnic association and embraces deep examination. The descriptive case
examination in this work will comprise of the gathering of data through interviewing,
observation, or administering the well-structured questionnaire to the sample of individuals
(Jervis and Drake 2014). This technique will be vital as it will be essential in drilling low, rather
than emit wide. The case examination will be vital as it will provide the surveyors with in-depth
data that aid in attaining different objectives of the assessment.
Sample dimension

Influence Of Accounting Practices In Small And Medium Enterprises 10
The smaller dimension of the massive population of SMEs under consideration will form
the much-needed sample size. Effective selection of sample size will make the research to be
economical in nature during the process of data gathering (Glattke 2017). In this study, a sample
dimension of a hundred respondents will be utilized to examine as well as to attain the specified
objectives and question of survey. Sample will be dispersed according to the arithmetic power of
the SMEs group with that aim of avoiding or eliminating instances of biases from occurring.
Category Targeted Population Sample Size
Manufacturing Sectors 2,500 60
Trade 1,500 25
Services Sectors 550 15
Total 4,550 100
Data collection techniques
The primary information in this study will be gathered through questionnaires
administration to identified respondents. These questionnaires will be delivered in several SMEs
and later picked to give the respondent an opportunity to fill. However, some questionnaires can
be delivered to targeted respondents through online by use of emails and then filled by
respondents before they email them back to the interviewer. As recorded by Jervis and Drake
(2014), primary data in any research refer to those items that are original to the issue under
examination. However, Sousa (2014) has been of the view that primary data is the data collected
by researcher in different field locations clearly for relative examination. However, this
examination will rely on initial information obtained from administered questionnaires and
observations by the interviewer.

Influence Of Accounting Practices In Small And Medium Enterprises 11
Methods of data analysis
Data analysis techniques in this research will comprise of several approaches that
comprise of quantitative approach. For instance, the use of quantitative research technique of
analyzing gathered data will focus on attaining efficient use of different online forums and
survey with the different advisory of accounting practices on their influence on operations of
SMEs (Jervis and Drake 2014). However, the application of the quantitative approach of survey
analysis targeted at creating significant use of diverse figures, charts, mathematical models, and
excels sheets, alongside diverse statistical approaches present on online sites will be used. The
technique utilized to analyze quantitative data will be descriptive (Sousa 2014). For instance, the
use of descriptive approach will comprise of ideas of getting different statistical means, media,
and variances for the already gathered data.

Influence Of Accounting Practices In Small And Medium Enterprises 12
List of References
Abimbola, O. and Kolawole, O. (2017). Effect of Working Capital Management Practices on the
Performance of Small and Medium Enterprises in Oyo State, Nigeria. Asian Journal of
Economics, Business and Accounting, 3(4), pp.1-8.
Ahmad, K. (2013). The Adoption of Management Accounting Practices in Malaysian Small and
Medium-Sized Enterprises. Asian Social Science, 10(2).
AlKhajeh, M. and Azam, A. (2018). The Relationship of Implementing Management Accounting
Practices (MAPs) with Performance in Small and Medium Size Enterprises. Journal of
Accounting and Auditing: Research & Practice, 2018, pp.1-7.
Asirah, A. (2018). Analysis Of Accounting Application On Micro Small And Medium
Enterprises. Patria Artha Journal of Accounting & Financial Reporting, 2(1).
Cuzdriorean, D. (2017). The Use of Management Accounting Practices by Romanian Small and
Medium-Sized Enterprises: A Field Study. Journal of Accounting and Management Information
Systems, 16(2), pp.291-312.
Du, B., Jiang, J. and Ji, X. (2018). Research on the Development of Management Accounting in
Small and Medium-Sized Enterprises in China. Open Journal of Accounting, 07(01), pp.19-24.
Glattke, T. (2017). International Research Collaborations: Ethical and Regulatory
Considerations. The ASHA Leader, 12(17), pp.19-21.

Influence Of Accounting Practices In Small And Medium Enterprises 13
Haider, Z., Munajat, Y. and Kamarulzaman, R. (2013). (Libs) A Promising Technique, Its
Limitations And A Proposed Method. Jurnal Teknologi, 57(1).
Hawari, E. and Nassar, M. (2018). The Factors Affecting the Different Management Accounting
Practices in Small and Medium Sized Enterprises in Jordan. International Journal of Academic
Research in Business and Social Sciences, 7(12).
Jervis, M. and Drake, M. (2014). The Use of Qualitative Research Methods in Quantitative
Science: A Review. Journal of Sensory Studies, 29(4), pp.234-247.
Mbogo, M. (2017). Influence of Managerial Accounting Skills on SME’s on the Success and
Growth of Small and Medium Enterprises in Kenya. Journal of Language, Technology &
Entrepreneurship in Africa, 3(1).
R, U., Ali, J. and MS, K. (2017). Accounting Practices of Small and Medium Enterprises in
Rangpur, Bangladesh. Journal of Business & Financial Affairs, 06(04).
Sousa, D. (2014). Validation in Qualitative Research: General Aspects and Specificities of the
Descriptive Phenomenological Method. Qualitative Research in Psychology, 11(2), pp.211-227.
Tabot Enow, S. and Kamala, P. (2016). The accounts payable management practices of small,
medium and micro enterprises in the Cape Metropolis, South Africa. Investment Management
and Financial Innovations, 13(1), pp.77-83.
Zotorvie, J. (2017). A study of Financial Accounting Practices of Small and Medium Scale
Enterprises (SMEs) in Ho Municipality, Ghana. International Journal of Academic Research in
Business and Social Sciences, 7(7).