adoption of computerized accounting system by smes in benin city

International

Academic

Journal

of

Economics International Academic Journal of Economics Vol. 3, No. 1, 2016, pp. 48-65.

ISSN 2454-2474

48

www.iaiest.com

International Academic Institute for Science and Technology

Adoption of Computerized Accounting System by SMEs in

Benin City

Alexander Dabor

a, Meshack Aggreh

b, Mercy Aneru

c

aLecturer, Veritas Univeristy, Abuja, Nigeria

b Lecturer, Veritas Univeristy, Abuja, Nigeria

cProfesional Student Member, Institute of Charttered Accountants of Nigeria, (ICAN)

Abstract

The objective of this study is to find out the prospects and challenges of the adoption of computerized

accounting by SMEs owners in Benin City. The study employed chi-square statistical technique to

ascertain the relationship between the dependent variable and the independent variables. The results show

that availability of financial resources, business size and business competition influence the adoption of

CAS by SMEs in Nigeria. The result further shows adoption computerized accounting system enhances

speed and improve the quality of financial and non-financial report prepared by SMEs in Nigeria . The

study recommends that government should make accounting software available at subsidized rate to

SMEs owners.

Keywords: Computerized Accounting System, SMEs, Innovative Theory,

Introduction:

In recent times the world economy has witnessed tremendous development which can betraceable

emergence of Small and Medium Scale Enterprises (SMEs). These unprecedented growth is very

common in developing countries (Ariyo, 2005). The social and economic values that Small and Medium

Scale Enterprises add to a nation cannot be overstated. SMEs sector play a key role in providing

employment for the teeming population of any nation and also in generating revenue for the government

. Simply put it this way - SMEs are engine drivers for achieving sustainable economic growth for any

meaningful nation. To achieve this onerous task SMEs need to map out strategies to overcome the

International Academic Journal of Economics,

Vol. 3, No. 1, pp. 48-65.

49

challenges in the business world. These challenges include cost reduction, reengineering of human

capital and maximizing competitive advantage (UNCTAD, 2005).

There is no gainsay to the fact that SMEs connote the flag-sheep of any momentous country. However,

anecdotal evidence shows that SMEs in developing countries like Nigeria are faced with a lot of

challenges that have hampered their growth in recent times and their survival is threaten. There is a need

for them to build strategies in order to survive the storm in the business environment. One key strategies

is accountability via sound reporting practices. Suffices to say that the trends of things and the stiff

competition in the business world today has made the fusion of information technology into operation of

SMEs in contemporary economies imperative. Many argued that IT thrives on accounting base system.

Njikamp and Cohen-Blankshtain (2005) opine that digital revolution has not only impacted contemporary

business life style of living but has also affected public officers. Business organizations especially small

and medium size enterprises in 21st century operate in complex and competitive environment

characterized by changing conditions and economic climate that made the adoption of computerized

accounting system for its trading and other financial activities almost impossible. The traditional view of

small and medium businesses record keeping suggest that the accountant should prepare financial reports

manually. Adoption of Computerized Accounting System (CAS) will increase speed and accuracy of

financial report of SMEs this can improve the reliability of the reports.

Basil (2005) observes that Most SMEs in Nigeria die within their first five years of existence, a smaller

percentage goes into extinction between the sixth and tenth year while only about five to ten percent

survive, thrive and grow to maturity. Many factors have been identified contributing to this premature

death of SMEs. Key among them include: insufficient capital, irregular power supply, infrastructural

inadequacies (water, roads etc.), lack of focus, inadequate market research, over-concentration on one or

two markets for finished products, lack of succession plan, inexperience, lack of proper book keeping,

lack of proper records or lack of any records at all, inability to separate business and family or personal

finances, lack of business strategy, inability to distinguish between revenue and profit, inability to procure

the right plant and machinery, inability to engage or employ the right caliber of staff, cut-throat

competition . However this study focuses on reconciling the traditional way on keeping financial record

and modern day reality.

Theoretical basis of research:

Computerization

Computeristion is the act of converting manual function into automated system. Computerisation is

based on the concept of database. A database is a management system which is define by a set of

computerized program that manage and organizes data effectively and provide access to the stored data


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by the application program. Computerisation in accounting takes place via software like: SAP, quick

book, SQL, Peachtree mention but a few.

Linda (2004) noted that there are two functions in record keeping, namely: to provide entrepreneurs

business operation and a complete and easy set to record the business activity by providing income tax

information which is widely available and verifiable. A good accounting system should give an accurate

and comprehensive results of operations, which allow quick comparison between current and previous

years data, offers the financial statements to be used by prospective creditors, bankers and management,

facilitate filing reports and tax returns to government regulatory agencies and tax-collecting, and

disclosing record keeping error, waste, theft, and employee misconduct

CAS can be divided into two major categories, namely the low-end and the high-end systems. Among the

characteristics that distinguished the low-end and high-end systems are ease and speed with which

information is extracted from the accounting database, quantity of information that can be stored in the

database, intensity of use, and easiness of modification and customization (Spivak & Honig, 1997).

However, the advancement of CAS has created a new breed of computerized accounting systems beyond

the high-end, that is, enterprise resource planning (ERP). ERP systems are integrated software packages

designed to provide complete integration of an organization’s business information processing systems

and all related data (Everdingen et al., 2000). The ERP system would further strengthen a firm’s strategic

position with the availability of information that could support the management decision-making

processes.

Honig (1999) classified CBAS into two major categories, namely the low-end and the high-end systems.

Among the characteristics that distinguished the low-end and high-end systems are ease and speed with

which information is extracted from the accounting database, quantity of information that can be stored in

the database, intensity of use, and easiness of modification and customization.

SME

The European Economic Commission (EEC) and the European Investment Bank defines SME as any

firm with a workforce not exceeding 500, with net assets of less than ECU 75 million, and with more than

one third of its capital held by a larger company. Central Bank of Nigeria defines SME in Nigeria as any

business outfit that which asset base between N4million and N500million and staff strength between 10

and 100.

South Africa National Small Business Amendment Act 26 2003 defines SME as any enterprise that with

one or more of the following characteristics:

Fewer than 200 employees

Annual turnover of less than R64 million

Capital assets of less than R10 million

Direct managerial involvement by owners


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In Taiwan, the small scale business was defined as a business with less than 5 employees and the medium

as the business with between 10 and 499 employees in 1991 in the manufacturing sector.

The South Korea defined small scale enterprise in 1988 as any business that employ 5 to 19 and medium

scale enterprises as employing between 20 and 199 without Sectoral specification. In Bangladesh a micro

firm employed less than 20, while small firm employed from 20 to 99 in the manufacturing sector without

mentioning of medium scale enterprises in 1986. In Bolivia, a small scale employs 1 to 9 and medium

scale 10 to 99 employees in 1992 (Hallberg, 1999).

In Ghana, the Ghanaian Enterprise Development Commission defined a small industry as one requiring a

loan of not more than c250,000 (if the borrowers equity were 30 percent including land and building).

The Bank of Ghana, which operated a Credit Guarantee scheme (CGS), defined a small scale business by

its sales volume (turnover) and by size of its investment in plant and equipment. To qualify for the CGS,

an enterprise must have annual turnover not greater than c300,000 (three hundred thousand cedis) and

plant and buildings valued at no more than c 1 00,000 in 1988. The National Board for Small Scale

Industry in Ghana defined Small scale enterprise as a company having an asset valued at c10,000

(excluding land, building and vehicle) and employ 9 persons or less (Okraku and Croffie, 1997).

In the 1979 Credit Guidelines to commercial and merchant banks, the Central Bank of Nigeria (CBN)

defined small scale enterprises (excluding general commerce) as enterprises in which total investment

(including land and working capital) does not exceed N500,000. In its monetary circular No. 22 of 1988,

the CBN redefined small Scale enterprises (excluding commerce) as enterprises in which total investment

(including land and capital) does not exceed N500,000 and/or annual turnover does not exceed N5

million. Following the persistence depreciation of the naira, capital investment was raised to N5 million

and turnover to N25 million (FRN, 1988). Also, in 1979, the Small Scale Industries Division of the

Federal Ministry of Industries defined small scale industries as enterprises having investment capital

(investment in building, machinery, equipment and working capital) of up to N60,000 and employing not

more than 50 persons. This was later revised to embrace any manufacturing, processing or service

industry with capital not exceeding N150,000 in machinery and equipment.

The Nigerian bank for Commerce and Industry (NBCI) in the same year defined small scale enterprises as

those businesses (for the sake of revolving loan schemes) investing not more than N500,000 (excluding

the cost of land but including working capital). In 1985, NBCI redefined small scale enterprises as firms

whose capital costs do not exceed N750,000 (including working capital but excluding land). In the 1990

budget, the Federal Government of Nigeria defined small scale enterprises, for the purpose of commercial

bank loans, as those enterprises with an annual turnover not exceeding N500,000 and for merchant bank

loans, as those with a capital investment of not less than N2 million (excluding cost of land) or a

maximum of N5 million. The National Economic Reconstruction Fund (NERFUND) puts the ceiling for

small scale industries at N10 million.


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Section 37(2) of the Companies and Allied Matters decree of 1990, defined a 'small company' as one with

annual turnover of not more than N2 million, and net assets value of not more than Nl million

(Ekpenyong, 1997)

Benefit of computerized accounting system

The two biggest advantages of a computerized accounting system are speed and accuracy. When using a

manual accounting system, each step in the accounting cycle must be performed by hand. For example, if

a business pays their electric bill, a check has to be written, an entry must be recorded into the check

register, and the transaction has to be posted to the respective ledgers: in this case, a debit to the electric

company’s ledger account and a credit to cash. This process would need to be repeated for every

transaction a business makes. If the business is small and makes only a few transactions a month, it would

not be much of a problem. But for other businesses, there could be thousands of transactions, and it could

take both a large amount of time and a substantial staff to keep up. With a computerized accounting

system, the steps described above are completed with one entry. The journal entries for cash and the

electric company are automatically posted to their respective ledgers. What could take several minutes

manually takes only seconds with a computerized accounting system. Also, because only one entry needs

to be made with a computerized system, the likelihood of an incorrect entry is greatly reduced.

Challenges SMEs face in their ability to computerize

In spite of the various government programs and incentives, including technology acquisition and skill-

building programs, the adoption and effectiveness of technology adoption among SMEs is still an issue of

great concern to the government. Shahrum et al., (1996) found that adoption CAS among SMEs in the

Mid East was only fifty-one percent. They further found that only fifty-three percent of the firms used

computers for financial and accounting purposes. The percentage is fairly low compared to the CAS

adoption among SMEs in the Western countries. One possible explanation for the low adoption level is

that most of SMEs owners are apprehensive of CAS (Peter, 1999) due to their unfamiliarity with the

technology (Soon, 1990) . In this regard, Raman and Yap (1996) argued that the lack of a coherent

national IT plan and disintegration of IT training at various levels of agencies might have contributed to

the slow adoption rate of CAS among SMEs.

Research Background

According to Thong (1999) owner-managers particularly features important characteristics towards

education, knowledge level in computer, experience in computer training, innovativeness IT adoption and

computer self- efficiency. Capability using a computer was defined by Compeau and Higgins (1995) as

computer self- efficiency. Longenecker, Moore, Petty and Palich (2006) showed that many entrepreneurs

do not keep sufficient records and/or that they do not benefit the use of their financial statements. On the

other hand Klien (2002) stresses that a business either small or big business must have equivalent

accounts namely, the income, capital, expenses and liabilities .Small business need to track its assets,

liabilities, income and the expenses. Various software package introduce such as interface, wizards file,

icon and pre built templates for multipurpose. It can be memorizes by saving the data and the forms that


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been used regularly. By using this feature, record keeping will be consistent and also save time (Davis &

Dunn, 2005).

There is a strong link between qualifications of their leaders and technology-driven firm. According to

Lal, (2006) finding educational attainment of company directors who are related to the use of ICT and

further stresses that one possible clarification for the low adoption level of CAS is that most SME

owners are anxious of CAS and also because of their unfamiliarity with the technology. Adoption of CAS

by small business is more likely to be conducted by CEO (business owner), who has been conducting

computer training and have their own computer efficiency (Delone 1988, Raymond 1988). Ettlie (1990)

is of view that CEOs with greater knowledge in technological innovation is significantly more likely to

implement an aggressive technology adoption policy. Lacking in basic knowledge and awareness in

information systems were found in the CEOs of small and medium businesses( Gable & Raman,1992).

Unfamiliarity of IT was the main cause why most of them are less concern and do not know the benefits

using information system. If the owner (CEO) knows the importance of CAS, technology adoption is

ready for them. This seems to imply that, if CEOs know the benefits of CAS, they will be willing to adopt

such technology. Furthermore, they have to be given the required skills in IT besides the basic skill

needed by the small business owner-manager( Feeney & Wilcox ,1998). Instead, the owner-manager can

prevent any worthwhile IT performance through group or hostility to the IT (Thatcher and Perrewe,

2002). Therefore, owner-manager has CAS adoption efficiency in small and medium business.

Outsourcing the accounting work to the public accounting firm is preferred by the small and medium

businesses. By outsourcing, the awareness of the importance and the benefit in using CAS is low( Delone

,1988). These knowledge deficiencies will create a barrier to CAS adoption. According to Longenecker,

et al. (2006), small and medium business owners-managers are not expert in accounting but they should

know the process including the financial statements and identify the best methods can be apply to its

business. The characteristics of the organization are other variables that influences the decision whether

to adopt CAS. Organizational characteristics such as business size, employee’s level of IT knowledge,

industry sector, business location, and information-intensity has been analyzed in previous research

studies by Wenzler, (1996); Attewell, (1992); and Delone, (1988).

Generally, the larger the number of employees, the greater the sales turnover, the more information-

intensive the industry and the more likely a small business will adopt CAS. Moreover, small businesses

tend to face some challenges like; financial incapacity, non availability of time and inadequate IT skilled

staff to facilitate innovation adoption). Alpar and Reeves, (1990) reported that, knowledge of information

systems, even among small businesses able to hire people with specific skills. Environmental

characteristics related to organizations operating variables such as external agents and competition.

Competition may lead to the use of innovative technology. Wholesalers, trade associations, franchisors

and voluntary groups were influenced from high IT adoption by small businesses (Tread, 1990). Wenzler

(1996) identifies that the reasons for implementing CAS by SME are their customers rather than the

competitor.


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Competition is generally believed to increase the probability of innovation adoption (Thong, 1999).

Competition led to the uncertainty of the environment and enhances both the rate and the need of

adoption of innovations. Porter and Millar (1985) suggest that, there are three ways businesses can adopt

CAS. Changing the competition rules, as well as changing the industry structure. CAS can create

competitive advantage by reducing costs or increase differentiation. Finally, CAS seed new businesses by

creating a demand from new products, often in the existing business operations.

Adopt an innovation is also affected by peer pressure associated to the "diffusion effect," which is, the

degree of influence on individual outstanding increased by one or an organization to approve or reject the

innovation, resulting from activation of the peer network in social system (Rogers, 1983). Firms may end

up adopting because of perceived competitive necessity (or even sheer imitation) rather than as a result of

a cost/benefit assessment (O’Callaghan, 2005).

Research methodology

The population, sample and sampling

The population for this study comprises all 84 registered (registered with Corporate Affair Commission)

SMEs in Benin City. The sample size is forty registered SMEs drawn the population of SMEs in Benin

City applying the thumb rule. The SMEs that form the sample were selected by employing clusters

sampling and the simple random sample technique. The population is divided into four groups; namely

manufacturing, service outfit, agro-allied companies and food and beverage to ensure that all groups are

fully represented. Ten firms were selected from each cluster. The data used for this study is the primary

data .The primary data is obtained by administering questionnaire to elicit information from owners and

staffers of the selected SMEs in Benin City.

Research tools

The research instrument for this research is the Likert-type questionnaire and two way questionnaire. This

is a specific type of multiple choice questions suitable for obtaining the respondents evaluation or

assessment of an object. It indicates the extent to which respondents agree or disagree with given

statement. The questionnaire is divided two sections .Section A will capture the biometrics of respondents

while section B will contain questions related to the hypotheses to be tested.

To ensure validity and reliability of the questionnaire a test and pre-test was carried out. The research

instrument was checked by calculating its content validity index (CVI).The questionnaire was first given

to an expert to perform a pilot test. The used to content validity method developed by Lawshe (1975).This

method is essential used for gauging agreement among raters or judges regarding how important a

particular item is. The study measured CVI by relying on the knowledge of people who are familiar with

the construct being measured. The independent ratings of each subject-matter expert are then compared

and analyzed to determine the degree of content validity that exists for each question. The item ratings

are typically on a 5-point ordinal scale Then, for each item, the CVI is computed as the number of experts


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giving a rating of either 3 or 4 (thus dichotomizing the ordinal scale into relevant and not relevant),

divided by the total number of experts. For example, an item that was rated as quite or highly relevant by

four out of five judges would have an I-CVI of .80.

Similarly, the successfully retrieved questionnaires are subjected to series of test to correct anomaly that

may arise from questionnaire retrieved questionnaire. The questions that fail the test are modified. To

ensure reliability of the instrument and to build confidence that the instrument will yield good results,

cronbach’s alpha tests was performed on the Likert scales instrument. Using data obtained from the

questionnaires and statistical software SPSS 20.0 the reliability of the questionnaire was estimated as

0.78.

Method of data analysis

This study adoptede chi-square statistical technique . Before we analyze our statistical data, we

performed some preliminary statistical tests such as descriptive statistics and Pearson correlation matrix.

The data was coded and thereafter the information gathered from the questionnaire will be analyzed with

SPSS software.

Model specification

Dayarathne and Kumari (2000) assert that there are some pertinent variables that effect adoption of

computerized accounting by SMEs. They summarized the factors, CEO characteristics, Accountant

characteristics, business size and competition.

Adoption of CAS=f(ceo characstics, accountant characteristic, firm size and competition)

ACAS= + QACCH+ SIZE+ +€……………………….(1)

In the same vein Xiao (1996) formulated the model below to determine the challenges faced by SMEs in

adopting CAS .

ACAS=f(availability of funds, age of firm, CEO training and nature of business)

ACAS= + AFIRM+ + +€……………………….(2)

In this study we used modified of (1) and (2)

Adoption of CAS=f(benefit derived from ACAS and the challenges )

ACAS = f (AVFUND,QFR,SMR,SIZE and COMPT)

Mathematically written as :

CAS = + QFR+ SMR+ SIZE + COMPT +€


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where:

CAS = Computer accounting system

AVFUND = Availability of fund

QFR = Quality of financial report

SMR = Speed of accompanying accounting task

SIZE = Size of business

COMPT = Competition

€ = error term

A prior expectation

β:

Decision rule: If the calculated value of coefficient of t-value (value gotten from e-view software) is

greater than absolute critical value of 1.96 or the p-value is less than 0.05, we reject the null hypothesis

and accept the alternative hypothesis. The value of calculated is compared with critical at 5% level of

significance. This is the thumb rule

The Analysis of Data

We have used Descriptive statistics and inferential statistics such as single variable regression and chi

square test for analyzing data.

Analysis of Bio-data

Figure 1 Sex Distribution of the respondents

25

12

GENDER

MALE

FEMALE

Source: Field Survey, 2016


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57

From the analysis of the responses retrieved, of the 37 respondents whose responses were used for the

analysis, 12 of the respondents were female which represents 32% of the sample while 25 of the

respondents were males which represent 68% of the sample.

Figure 2 Age Distribution of the respondents



analysis, 11(29%) of the respondents were within the age range of 18-30 while 9(24%) of the

respondents were in the age range of 31-40 years. Furthermore, 8 (21%) of the respondents were in the

age range of 41-50 while 9(24%) were in the range 51-above.

Figure 3 Educational Qualification of the respondents

ON…

B.S…

M.…

13

17

7



analysis, 7(18%) of the respondents have M.sc qualifications. 17(45%) of the respondents have

B.SC/H.ND qualifications while 13(35%) of the respondents had the ordinary national diploma

(O.N.D)


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58

Research Findings

Hypothesis one

Availability of financial resources does not influence the adoption of CAS by SMEs in Nigeria.

Table 1. Descriptive Statistics

N Mean Std. Deviation Minimum Maximum

Statement 1 37 21.7413 15.53693 1.00 5.00

Statement 3 37 20.5622 18.57426 1.00 5.00

Source: Researcher’s computation (2016) using SPSS 20.0

The descriptive statistics above shows that the mean response for statement 1 is 21.74 which indicates

that most of respondents agreed to the statement that fund is one the impediment of the adoption of CAS

. The standard deviation of 20.5622 is an indication of the degree of dispersion of the total responses

from the mean response. The maximum and minimum values are 1 and 5 respectively. The descriptive

statistics also shows that the mean response for statement 3 is 20.5622 which indicates that most of

respondents strongly agreed to the statement that availability funds influence the adoption of CAS .

The standard deviation of 18.5742 is an indication of the degree of dispersion of the total responses from

the mean response. The maximum and minimum values are 1 and 5 respectively.

Table 2 Chi-square

Statement 1 Statement 3

Chi-Square 28.403a 26.105

a

Df 4 4

Asymp. Sig. .000 .000

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell frequency

is 28.6.


Table 2 presents the results for the chi-square test statistics. As observed, all the statements are all

significant at 5% level as the asymptotic value of 0.00. Specifically, statement 1 has a chi-square and

asymptotic value of 28.403 and .00 respectively. Statement 3 has a chi-square and asymptotic value of

26.105 and 0.00 respectively. All the asymptotic values are less than the alpha value of 0.05 at 5%

significance level and the calculated chi-square also exceeds the theoretical value at 5%. In light of the

above, we reject the hypothesis availability funds does not influence the adoption of CAS by SMEs in

Nigeria

Hypothesis Two

Ho: . Adoption of does not improve the quality of financial and non-financial report prepared by

SMEs in Nigeria


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59

Table 3. Descriptive Statistics


Statement 2 37 2.2308 1.26542 1.00 5.00

Statement 10 37 1.5734 1.45103 1.00 5.00


The descriptive statistics above shows that the mean response for statement 2 is 2.2308 which indicate

that most of the respondents agreed that adoption of CAS leads to quality report . The standard deviation

of 1.26542 is an indication of the degree of dispersion of the total responses from the mean response. The

maximum and minimum values are 1 and 5 respectively. The descriptive statistics also shows that the

mean response for statement 10 is 1.5734 which shows that most of the respondents agreed that adoption

leads to improved managerial output. The standard deviation of 1.45103 is an indication of the degree of

dispersion of the total responses from the mean response. The maximum and minimum values are 1 and 5

respectively

Table 4 Chi-square Test Statistics



a

Df 4 4

Asymp. Sig. .000 .000






significance level and the calculated chi-square also exceeds the theoretical value at 5% .In the light of the

above, we reject the null hypothesis which states that adoption of CAS does improve the quality of

financial and non-financial statement prepared SMEs in Nigerians.

Hypothesis Three

H0: Adoption CAS does not enhance speed of completing accounting task by SMEs s in Nigeria.

In testing the hypothesis, the chi-square statistics is employed. It examines the size of the discrepancy

between observed and expected values. Again, in conducting the analysis, we shall utilize the SPSS

statistical package. The descriptive statistics, contingency tables and chi-square test statistics are presented

below;


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Table 5 Descriptive Statistics


Statement 4 37 2.5245 1.49097 1.00 5.00

Statement 6 37 1.2937 1.50039 1.00 5.00


The descriptive statistics above shows that the mean response statement 4 is 2.5245 which indicate that

the average responses to statement 4 seem to cluster around the “agree” option. The standard deviation of

1.49097 is an indication of the degree of dispersion of the total responses from the mean response. The

maximum and minimum values are 1 and 5 respectively. The descriptive statistics above also shows that

the mean response statement 6 is 1.2937 which indicates that the average responses to statement 4 seem

to cluster around the “strongly agree” option. The standard deviation of 1.500 is an indication of the

degree of dispersion of the total responses from the mean response. The maximum and minimum values

are 1 and 5 respectively.




a

Df 4 4

Asymp. Sig. .000 .000

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell frequency is 7.4.






significance level and the calculated chi-square also exceeds the theoretical value at 5% In the light of

the above, we reject the hypothesis which states that Adoption CAS does not enhance speed of

completing accounting task by SMEs s in Nigeria

Hypothesis four

H0:. : Business size does not influence the adoption of CAS by SMEs in Nigeria.



statistical package. The descriptive statistics and chi-square test statistics are presented below;


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61



Statement 11 37 22.245 21.3417 1.00 5.00

Statement 12 37 19.4937 20.1039 1.00 5.00

Source: Researcher’s computation (2016) using, SPSS 20.0


the average responses to statement 11 seem to cluster around the “agree” option. The standard deviation

of 21.3417 is an indication of the degree of dispersion of the total responses from the mean response. The


the mean response for statement 12 is 19.4937 which indicates that the average responses to statement12

seem to cluster around the “strongly agree” option. The standard deviation of 20.1039 is an indication of

the degree of dispersion of the total responses from the mean response. The maximum and minimum

values are 1 and 5 respectively.




a

Df 4 4

Asymp. Sig. .000 .000








the above, we reject the hypothesis which states that Business size does not influence the adoption of

CAS by SMEs in Nigeria.

Hypothesis Five

H0: Business competition does not influence adoption of CAS by SMEs in Nigeria.



statistical package. The descriptive statistics and chi-square test statistics are presented below:



Statement 5 37 2.2145 1.69197 1.00 5.00

Statement 7 37 1.1313 1.40139 1.00 5.00



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62


the average responses to statement 5 seem to cluster around the “agree” option. The standard deviation of

1.69167 is an indication of the degree of dispersion of the total responses from the mean response. The


the mean response statement 6 is 1.1313 which indicates that the average responses to statement 7 seem

to cluster around the “strongly agree” option. The standard deviation of 1.401 is an indication of the

degree of dispersion of the total responses from the mean response. The maximum and minimum values

are 1 and 5 respectively.




a

Df 4 4

Asymp. Sig. .000 .000








the above, we reject the hypothesis which states that business competition does not influence adoption of

CAS by SMEs in Nigeria

Conclusion:

The aim of the study is to ascertain the benefits as well the challenges of adoption of Computerized

accounting system by SMEs in Nigeria. The result shows that availability of financial resources influence

the adoption of CAS by SMEs in Nigeria. It also shows adoption computerized improve the quality of

financial and non-financial report prepared by SMEs in Nigeria . Furthermore, the study shows that

adoption CAS enhance speed of completing accounting task by SMEs s in Nigeria. In addition the result

shows that business size influences the adoption of CAS by SMEs in Nigeria. Finally, the study reveals

that business competition influences adoption of CAS by SMEs in Nigeria.

Practical suggestions:

The study recommends that government should make accounting software available at subsidized rate to

smaller firm that are with financial challenges. SMEs owners should complied to file their reports within

a stipulated period of time to the Nigerian Chamber of Trade ,Commerce and Industry employed and

defaulters should be penalized.

This study considered a sub part in Nigeria – Benin City; we recommend that researchers that intend to

carry out further studies in this area should expand their scope to the West African sub-region (a cross-

country analysis) using other non-parametric and parametric statistical methods.


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Appendix

QUESTIONNAIRE

SECTION A

INSTRUCTION: Please tick appropriately in the box/column as [ ]:

Personal Data

1. Sex: Male [ ], Female [ ]

2. Age: 18-30yrs [ ], 31-40yrs [ ], 41-50yrs [ ], 51yrs and above [ ]

3. Educational Qualification: SSCE/WASC [ ], OND/Diploma [ ], HND/B.Sc. [ ], M.Sc.[ ], Ph.D.[ ]

4. Work Experience: 0-5yrs [ ], 6-10yrs [ ], 11-15yrs [ ], 16-20yrs [ ] 21yrs and above [ ]

5. Number of employees in your firm ……………………………………….

SECTION B

S/N Items SA A U SD D

1. Cost of switching from manual to computerized

accounting system is capital intensive.

21 14 2

2. The adoption of computerized accounting system

influences the quality and accuracy of reports positively.

22 14 1 1

3. Lack of financial resources hinders SMEs from

switching over to computerized accounting system.

13 24

4. Adoption of computerized accounting system results in

speedy completion of accounting tasks

23 13 1

5. Adopting computerized accounting system gives a firm

competitive advantage over its competitors.

11 22 4 1

6. The use of computerized accounting system enhances

speedy outcomes and preparation of reports.

18 19 1

7. Computerized accounting system enhances operational

effectiveness generally than manual accounting system.

16 19 1 1 1

8. Size of SMEs in terms of its assets determines the

adoption of computerized system.

8 18 5 6

9 SMEs need to switch over to computerized accounting

system in order to meet up with new business

environment and competitions.

10 23 3 1

10 Adoption of computerized accounting system will lead

to significant changes in the quality and style of

managing SMEs.

11 20

5 1

11 Very small business with low value transactions do not

need to switch over to computerized accounting system.

14 14 5 1 3

12 Turnover of business affects the adoption of

computerize accounting system.

17 10 3 2 5

13 The adoption of computerized accounting by SMEs

reduces the level of fraud and forgery.

19 19 4 3 1

14 Adoption of computerized accounting system lead to

timely accomplishment of accounting task.

24 10 1 2

adoption of computerized accounting system by smes in benin city

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