Effect of Accounting Information System on Financial Performance of Micro, Small and Medium Enterprises in Nairobi City County, Kenya
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Date
2023-10
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Daystar University, School of Business and Economics
Abstract
This research addressed the effect of accounting information system (AIS) on the financial performance of Micro, Small, and Medium Enterprises (MSMEs) within Nairobi City County. The purpose of this study was to establish the effect of accounting information system on the financial performance of MSMEs in Nairobi City County. The study objectives were to determine the extent to which computer-based applications are used by MSMEs in Nairobi City County, to assess the financial performance of MSMEs in Nairobi City County and to evaluate the effect of accounting information system on the financial performance of MSMEs in Nairobi City County. The study was guided by Agency Cost Theory, Stakeholder Theory, and Positive Accounting Theories. The study investigated the impact of Accounting Information Systems (AIS) on the financial performance of 50 out of 30,252 MSMEs engaged in alternative credit activities. The study used a stratified sampling method and collected data through structured questionnaires. The study employed descriptive statistics and Pearson's correlation. To ensure clarity in research questions, a pretest was conducted with 5 questionnaires (10% of the sample size) before distributing them to the entire population. The findings revealed that 51% of respondents believe that computer-based software positively affects their daily operations. Additionally, 81.3% express confidence in their firms' strong financial performance. Around 57.1% of participants believe that AIS influences the financial performance of MSMEs. Notably, 55.8% of respondents believe that Nairobi City County plays a role in the financial success of MSMEs in Nairobi County. The study recommends strategic actions, including continued implementation and seamless integration of AIS with an emphasis on security.
Description
MASTER OF BUSINESS ADMINISTRATION
in Finance
Keywords
Accounting Information System, Financial Performance, Micro, Small and Medium Enterprises, Nairobi City County, Kenya
Citation
Kamau, A. M., (2023). Effect of Accounting Information System on Financial Performance of Micro, Small and Medium Enterprises in Nairobi City County, Kenya: Daystar University, School of Business and Economics