Perceived Use of Accounting Information and Practices of Accounting in Micro Enterprises of Developing Countries

Md. Zakir Hosen (), Md. Takibur Rahman and Md. Mamun ur Rashid
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Md. Takibur Rahman: Department of Accounting and Information Systems, Patuakhali Science and Technology University, Bangladesh
Md. Mamun ur Rashid: Department of Agricultural Extension and Rural Development, Patuakhali Science and Technology University, Bangladesh

Journal of Accounting and Management Information Systems, 2020, vol. 19, issue 4, 682-706

Abstract: Research question: What is the perceived use of accounting information and current practices of accounting in micro enterprises? Motivation - Business decisions are more accurate and focused if they are made based on reliable information, for instance, accounting information. However, the use of accounting information in decision-making varies among the business entities, which is even poor in micro enterprises in developing countries. Idea - This study aims to examine perceived use of accounting information in decision-making and current practices of accounting in micro enterprises of Bangladesh. Data - The data include the characteristics of owner and business, perception on accounting systems, the use of accounting information (ACI) in decision-making and the current accounting practices collected from 148 respondents. Tools - The data are analyzed using standard descriptive statistical tools and multivariate regression. Findings - We find that the perception regarding the use of ACI in decision-making is low. Furthermore, the existing practices of accounting in surveyed entities are very low. The key practices, in terms of weighted mean, are cash reconciliation and practices of budgeting. Furthermore, the number of employees in the enterprises has a positive significant relationship with the perception regarding the use of ACI in decision-making. Besides, enterprises practicing accounting have higher performance. In addition, the size, and the nature of business have statistically significant positive effects on turnover. Contribution - This study may help stakeholders in understanding the role of accounting in business decision-making and its impacts on financial performance of the micro enterprises in developing countries.

Keywords: accounting information; decision-making; perception; proprietorship (search for similar items in EconPapers)
JEL-codes: G21 M41 M48 (search for similar items in EconPapers)
Date: 2020
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