Accounting information system, financial reporting quality and financial performance of small and medium enterprises in Accra metropolis

Abstract

The primary emphasis of this investigation was centered on accounting information systems (AIS), the financial reporting quality and financial performance of small and medium enterprises in Accra metropolis. In accordance with the aims of the study, an explanatory research framework employing a quantitative methodological paradigm was implemented. A meticulously structured questionnaire was employed to execute the survey among 249 randomly chosen managers and owners of SMEs. The hypotheses were scrutinized through a reflective model definition utilizing structural equation modeling within the SMART PLS framework. The results demonstrated that alterations in AIS, characterized by the information quality, service quality, systems quality, and user satisfaction—resulted in a modest enhancement of financial performance. Furthermore, it was elucidated that the owners/managers of small and medium-sized enterprises (SMEs) within the Accra Metropolis have reported an augmentation in financial information, which can be largely attributed to the implementation of accounting information systems. The improvement in financial performance was determined to be significantly influenced by the financial reporting quality. The findings suggested that the predictive correlation between accounting information systems and financial performance was markedly mediated by the of financial reporting quality. The survey emphasized the imperative for SMEs in the Accra Metropolis to prioritize the allocation of resources towards the establishment of robust accounting information systems where this investment ought to primarily concentrate on critical components of accounting information systems