The Use of Information Technology (IT) among Small and Medium Enterprises (SMEs) In Financial Reporting: Evidence from Ghana

Abstract

In today’s world, the role of Information Technology (IT) has become an essential tool to the success of every business. A major strategy in ensuring cost reduction, security and remaining efficient and effective in today’s modern business environment is the use of recently emerged IT in business. Better decision-making among businesses will elevate the danger of failure and instead remain competitive. This paper sought to assess the relevance of IT on accounting practices in relation to financial reporting by Small and Medium Scale Enterprises (SMEs) in Ghana; that is determining whether or not IT systems have better influence on accounting practices in relation to organizational performances. Majority of SMEs used in the study indicated that IT provide security with financial information, hence the result of this research showed positive correlation between IT and its usage in financial reporting. According to this study, the use of IT has a positive impact on the accounting practices which directly enhance performance of businesses. Business organizations are however encouraged to embrace IT systems in full capacity for their accounting practices to ensure fast track of their financial reporting to users of accounting information. It would be added advantage if government of developing countries will advocate and create more awareness on the importance of IT in business to ensure development.