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ACCOUNTING PRACTICES AND PERFORMANCE OF SMALL AND MEDIUMSCALE ENTERPRISES (SMES) IN AKWAIBOM STATE, NIGERIA
Abstract: In the midst of divergent scholastic views about the determinants of performanceby SMEs across different disciplines. This paper provides empirical evidence about the influence of accounting practices on the performance of SMEs operating in AkwaIbom State, Nigeria.The study was to examine the contributions of accounting practices to the well-being of SMEs.A sample of SMEs operating in AkwaIbomState was surveyed. In addition to examining their financial statements, a structured questionnaire was used fordata collection. The data collected were analyzed using mean scores and mean score percentages; and regression analysis was adopted for the estimation of the model formulated.The result of multiple regression analysis revealed a joint significant positive relationship between cash, tangible non-current assets, inventory management practices and return on capital employed, as indicated by an adjusted R-square of 87.1%. Cash management practice (CMP) has the greatest influence followed by Inventory management practice (IMP). However, Tangible non-current assets management practice (TNCAMP) has negative significant influence on performance of SMEs in AkwaIbom State. The results showed a strong linear relationship between accounting practices and performance by SMEs in AkwaIbomState. It was therefore recommended that SMEs should endeavour to engage in accounting practices, such as cashand inventory management practices as well as preparation of financial statements, regardless of how simple it may appear.This study revealedthatapplying accounting practices are significant to the overall well-being of SMEs, yet the practices are still very low among those operatingin AkwaIbomState. It was concluded that an increase in the level of accounting practices has the capacity to reduce failure rate among SMEs in the state.
Keywords: Inventory management practices, Cash management practices,Tangible non- current assets management practices,Return on Capital Employed