The Effect of Accounting Record Keeping Practices on Financial Performance: Special Reference to Small and Medium Enterprises in Anuradhapura District

Somathilake Hmdn and Ranathunga Kgkd
Additional contact information
Somathilake Hmdn: Department of Accountancy & Finance, Faculty of Management Studies, Rajarata University of Sri Lanka
Ranathunga Kgkd: Department of Accountancy & Finance, Faculty of Management Studies, Rajarata University of Sri Lanka

International Journal of Research and Innovation in Social Science, 2021, vol. 05, issue 08, 258-264

Abstract: In Sri Lankan context Small and Medium Enterprises (SMEs) play a vital role and contribute in significantly to the economic growth and social development through job creation, poverty alleviation and new business development, but on the other hand there are many failures of SMEs due to poor record keeping practices, inaccurate accounting information, reason to inaccurate financial performance and to make poor financial decisions. Therefore, many of SMEs die off soon after their establishments and face financial and management challenges. The purpose of this study is to identify the effect of accounting record keeping practices on financial performance of SMEs in Anuradhapura district. Preparing accounting records (PAR), preparing financial statements (PFS), computer utilization (CU) and respondents’ perception (RP) used as independent variables to measure the accounting record keeping practices. Financial performance (FP) was used as the dependent variable of this study. The research was based on the quantitative research method and the data were collected from 152 SMEs in Anuradhapura district using a structured. Descriptive analysis, correlation analysis and multiple regression analysis used to analyze collected data according to SPSS 25 version. Results revealed that accounting record keeping practices show a positive effect on financial performance of SMEs and preparing financial statements have a significant effect on SMEs financial performance. So, SMEs should highly concern about record keeping practices as one of the tool to improve and increase the financial performance and relevant authorities should develop specific guidelines and must provide templates of account record keeping practices for SMEs to make them very easier and familiar with account practices.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijriss/ ... -issue-8/258-264.pdf (application/pdf)
https://rsisinternational.org/virtual-library/pape ... uradhapura-district/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:5:y:2021:i:08:p:258-264

Access Statistics for this article

International Journal of Research and Innovation in Social Science is currently edited by Dr. Nidhi Malhan

More articles in International Journal of Research and Innovation in Social Science from International Journal of Research and Innovation in Social Science (IJRISS)
Bibliographic data for series maintained by Dr. Pawan Verma ().