Accounting Information Systems (AIS) in SMEs: Towards an Integrated Framework

Accounting Information Systems (AIS) in SMEs: Towards an Integrated Framework

Fahmi Ibrahim (Universiti Teknologi Brunei, Bandar Seri Begawan, Brunei Darussalam), Diyana Najwa Haji Ali (Universiti Teknologi Brunei, Bandar Seri Begawan, Brunei Darussalam) and Nur Suaidah Awang Besar (Universiti Teknologi Brunei, Bandar Seri Begawan, Brunei Darussalam)
Copyright: © 2020 |Pages: 17
DOI: 10.4018/IJABIM.2020040104

Abstract

Small-medium enterprises (SMEs) have always been considered to be the backbone of Brunei's economy. As published by the OECD in 2006, SMEs constitute a high percentage of businesses, where they account for 98% of all active business enterprises, and contribute about 92% of the employment in the private sector, and at least 66% of the GDP within the non-oil sector of the economy. Since SMEs are considered to be significant for the economy, they are encouraged to improve their business performance in order to sustain their business development by enhancing their accounting information system. This article will focus on the current accounting practices in which Brunei SMEs have been implemented by MMA Cube Stores as a case study. As cube shop businesses have been growing all over the country, it is significant to carry out this research as it may apply to the other similar business in Brunei. Reasonable recommendations are included in this article for the augmentation of the accounting system among Brunei SMEs.
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1. Introduction

Small and medium-sized enterprises (SMEs) have played a key role in economic growth and equitable development in developing countries (OECD, 2006). In Brunei, SMEs account for 98 per cent of all active business enterprises and have contributed 58% of total employment and 22% of Gross Domestic Product (GDP) (Association of Southeast Asian Nations, 2011). Thus, small and medium enterprises (SMEs) are considered to be the one of main contributor to the economy of Brunei Darussalam. For almost a decade, His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam has been highlighting the importance of SMEs in his Titah as their contribution in providing secondary support and income to the country’s economic growth is important as ever (Anwar, 2007). While many small-medium enterprises (SMEs) have encountered new obstacles (Chan & Qi, 2003; Yunis et al., 2013), there are several success factors that may contribute to the success and failure of SMEs. The critical of success factors (CSFs) for SMEs can be categorised into three main types; entrepreneurial, enterprise and business environment (Simpson et al., 2012; Rutherford et al., 2000; Gibb, 2000). In view of this chapter, accounting system practices and information systems are identified in the literature as contributing success factors under the proxy of Enterprise-Strategic Planning and Business Environment-Technological. Accounting system is the form of strategic planning of an organisation with technological of information systems that must go well to ensure the success. However, the article will focus on one of the factors which is the accounting system practices of small and medium enterprises (SMEs) in Brunei using one company as a case study.

Accounting Information Systems (AIS) is a vital resource for today’s SMEs as it has the ability to facilitate towards an effective decision making, planning and controlling activities of an organisation. SMEs are highly required to manage their accounting and finances efficiently in order to maintain and improve their business since one of the aims of running a business is “profitability”. Finance in general (but cash in particular) is critical issue for growing businesses (Carpenter & Peterson, 2002; Sexton et al., 1997). Hence, adequate and high-quality accounting information systems is crucial to achieve this goal. This is because the lack of access to information (Islam, Abdullah & Salleh, 2001) and proper accounting records may contribute to the failure of SMEs. Moreover, previous research discovered that poor information quality may lead to negative effects on the decision making (Huang, Lee & Wang, 1999; Clikeman, 1999).

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