Call girls in Andheri with phone number 9892124323
ASSESSING THE REASONS WHY SMALL AND MEDIUM SCALE ENTERPRISES ARE NOT KEEPING ADEQUATE ACCOUNTING RECORDS.
1. ASSESSING THE REASONS WHY SMALLAND MEDIUM
SCALE ENTERPRISES ARE NOT KEEPING ADEQUATE
ACCOUNTING RECORDS.
By
COLLINS OPOKU JUNIOR
+233543855651
2. OUTLINE OF PRESENTATION
CHAPTER ONE ……………. INTRODUCTION
CHAPTER TWO …………... LITERATURE REVIEW
CHAPTER THREE ……….… METHODOLOGY
3. CHAPTER ONE
BACKGROUND OF THE STUDY
The dynamic role of Small Business in developing countries as engines
through which the growth objectives of developing countries can be
achieved has long been recognized. It is estimated that Small Business
employs 22% of the adult population in developing countries
(Daniels & Fiche 2006).
Small and medium scale enterprises provide 85 percent of manufacturing
employment, contributes about 70 per cent to Ghana’s Gross Domestic
Product and account for about 92 per cent of businesses in Ghana
(Abor & Quartey 2010),
An inadequate accounting system is a primary factor in small business
failures. Quality of SME records keeping attract investors to invest and for
financial institution to provide finance (Tagoe et al., 2001)
4. GENERAL OBJECTIVES
To assess record keeping
practices by small and
medium scale enterprises
(SMEs) in the Ahafo–Ano
North District
SPECIFIC OBJECTIVES
To assess the sorts of records
kept by SMEs in Ahafo-Ano
North District.
To ascertain whether they
SMEs records are able to meet
finance providers.
To examine the importance’s
of proper bookkeeping and
basic accounting procedures in
SMEs.
5. STATEMENT OF THE PROBLEM
Difficult for government to plan adequately to embrace SMEs sector due to
inadequate proper accounting records keeping
Difficulties to get Credit extension to SMEs sector is also difficult to be
assessed by financial institutions
Budgeting or financial planning for the business in this sector is quite a
difficult task because of lack of good Book keeping practices of the
business in this sector
RESEARCH QUESTIONS
What sort of accounting records is kept by SMEs in Ahafo-Ano North District.?
Do SMEs accounting records meet the requirement of finance providers?
How can accounting records help SMEs in Ahafo-Ano North District.?
6. CHAPTER TWO
LITERATURE REVIEW
According to Bolton Committee’s Report on Small Business (1971),
The economic definition regarded firms as being small if they satisfied three
criteria:
They had a relatively small share of their market place
They were managed by owners or part-owners in a personalized way,
and not through the medium of a formalized management structure
They were independent, in the sense of not forming part of a larger
enterprise.
The European Commission (2003) defines SMEs as enterprises which employ
fewer than 250 persons and which have an annual turnover not exceeding
EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43
million.
According to (NBSSI, 1990) SMEs are defined in Ghana by applying both
the “fixed asset and number of employees “criteria. It defines a small-scale
enterprise as a firm with not more than 9 workers, and has plant and
machinery not exceeding 10million Ghana cedis and micro with
employees less than five
7. THEORETICAL LIERATURE
The International Accounting Standard Board (IASB,2007), defines small and Medium size
enterprise as an entity that does not have public accountability and publishes general-purpose
financial statements for external users.
According to NBSSl (2000), SMEs are more labour intensive and tend to lead to more
equitable distribution of income than larger enterprises
According to Madson K. and Belot T. (1998), an encouragement of SMEs in both rural and
urban areas should be a high priority in Africa, not only for the impact of development of
growing indigenous private but also as recruitment and training process for future enterprises
EMPIRICAL LIERATURE
According to SEED Working Paper Number 29 (Geneva 2002), SMEs play a key role in the
manufacturing sector providing 80% of the total employment, contributing over 30% to Gross
Domestic Product (GDP) and getting fourth of the sectors export earnings
Small Scale Industry give the number of registered limited companies in Ghana at
approximately 80,000, registered partnerships 220,000 and unregistered and informal
companies countless.
8. CHAPTER THREE
METHODOLOGY
RESEARCH DESIGN
Descriptive Cross-Sectional data was used in the sense that data was
systematically collected at a point in time analyzed and presented to give
a clear picture about the cash management of SMEs in Ahafo-Ano North
District.
The study population comprised of 373 registered businesses, in the
Ahafo-Ano North district. These businesses comprise mainly sole
proprietors and few limited liability companies.
POPULATION OF THE STUDY
9. SAMPLING TECHINIQUES
The population of 335 registered businesses with the VAT
service was therefore sampled
DATA COLLECTION TECHNIQUES AND TOOLS
Structured Interview
Prepared questionnaires containing open ended and closed was
given out to the study subjects to respond to with the aid of
research assistants.
10. CHAPTER FOUR
PRESENTATION, ANALYSIS AND DISCUSSION OF DATA
In other to investigate into this issue, questionnaires were
administered, interviews conducted among the various
business owners of small scale enterprise in Sekyere
Ahafo-ano District as to how they are not keeping
adequate accounting records.
The result of the study obtained from the use of
questionnaires, interviews findings are discussed based
on the respondents’ feedback.
12. PREPARATION OF ACCOUNT AT THE END OF THE
YEAR
7%
93%
Yes No
Sources: Researchers’ field survey, 2019
13. 130
0
10
0 0
93
0
7
0 0
To determine
profitability
For tax purposes For loan
requirements
As a statuary
obligation
Chartered
accounting firm
REASONS FOR PREPARING ACCOUNTS
Sources: Researchers’ field survey, 2019
14. Responds Frequency Percentage (%)
YES 44 32
NO 94 68
Total 138 100
HAVE YOU EVER RECEIVED BASIC ACCOUNTING AND
BOOKKEEPING TRAINING?
Sources: Researchers’ field survey, 2019
16. CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATION
Various reasons were given by these small and medium scale enterprises why they are not
keeping records of their sales. Some of these reasons are that many SME’s do not have the
knowledge and understanding in book - keeping. Others also say that they do not have time of
keeping records especially when their customers are queuing for goods. There were also those
who even said that they feel lazy to document their purchases, sales and expenditures every
day.
RECCOMENDATION
The owners and manager of SMEs should be educated about the importance of keeping
adequate accounting records.
Laws should be enacted to make it obligatory for sole proprietorships (SMEs) to keep
adequate accounting records.
The government should make the study of accounting obligatory from primary to senior
secondary level in order to make Ghanaians aware of the importance of keeping adequate
accounting records or bookkeeping.