Abstract: Since in Somalia it’s clear that many SME’S play a vital role in both in the economy and as a means of reducing poverty. Since accounting information system play a vital role for the facilitation of organization’s operations, in my best knowledge it’s still questionable whether this system have better adaptation to a changing environment, better management of arm's length transactions and a high degree of competitiveness in Small businesses in Mogadishu. Therefore, this study investigates the impact of practices of Accounting Information System on Small Businesses financial performance in Mogadishu-Somalia. The general objective of the study was to establish the effect of accounting information System on Financial performance of SMEs in Mogadishu-Somalia. And this study was focused on four main specific objectives such as the effect of Financial accounting information system, Cost Accounting information system, Management Accounting information system and Financial Management information system on the financial performance of the SMEs in Mogadishu-Somalia. The study discussed three theories and they are Agency theory, Contingency theory and Behavioral theory. The study adopted a quantitative research with the specific research design being a descriptive design. The population of the study was the classified SMEs locate in Mogadishu Market, and they are 5 main SMEs in Mogadishu Market, the employees worked that 5 main SMES are 133 employees. The sampling frame is 133 employees in 5 main SMEs arising from the sample size of 100 employees was extensively surveyed to ascertain the influence of Accounting Information system on Financial performance of SMEs. The sampling technique used was purposive sampling. Primary data was collected by use of questionnaires which are administered through drop and pick method. Data screening was done to identify any missing data and it further test for reliability and normality. Data was analyzed using SPSS version 22. Descriptive statistics e.g standard deviations and inferential statistics such as Pearson’s correlation, ANOVA and multiple regression analysis were used for further analysis. The findings of this study was there was positive and significant effects of Financial Accounting information system on Financial performance (β = .177; t = 2.029; p < 0.05) as well as the results indicates There was positive and significant effects of Cost Accounting information system on Financial performance (β = 1.269; t = 4.187; p < 0.05) and the third objectives was found there was positive and significant effects of Management Accounting information system on Financial performance (β = 1.829; t = 5.637; p < 0.05) and finally the researcher found there was positive and significant effects of Financial Management information system on Financial performance (β = .500; t = 6.378; p < 0.05). In conclusion the results shows that Financial accounting information system , Cost accounting information system , Management accounting information system and Financial management information system is significant in predicting the financial performance of SME’s operates in Mogadishu- Somalia. In light of the results study, the researcher recommends that the management of Small and Medium Enterprises effective use of Accounting Information Systems in administrative decisions-making. As well as the researcher recommends the development of software and hardware used in the information systems and the training of personnel in the coordination of accounting information systems.
Keywords: Financial Accounting, Cost Accounting, Management Accounting, Financial Management Information System and Financial Performance.
Title: EFFECT OF ACCOUNTING INFORMATION SYSTEM ON FINANCIAL PERFORMANCE OF SMALL & MEDIUM ENTERPRISES IN MODADISHU-SOMALIA
Author: Hassan Mohamed Sabrie, Aaron Mukhongo
International Journal of Management and Commerce Innovations,
ISSN 2348-7585 (Online)
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