Abstract
Computerized Accounting System (CAS) plays a prominent role in providing information accurately and quickly to meet the challenges of the ever-changing business environment. Developing countries, however, struggle and are reluctant towards adopting CAS in SMEs. In Sri Lanka whereas an emerging economy is existing, a few studies have attempted to study the reticence of adopting CAS in SME sector. SME sector is vital in developing economy as it generates employment, promotes the growth of Gross Domestic Product (GDP) and stimulates other economic activities. Even though SMEs engender many benefits, their persistence is threatened and need strategies to overwhelm the challenges in the competitive business environment in emerging economies. In line with the previous studies focused on the technological revolution and SMEs in developing countries, research findings reveal that SMEs have a poor accounting system and slower in using new technology. According to them, one key strategy is accountability via sound reporting practices. The study, therefore, examines the factors which affect to the adoption of CAS in SMEs in Sri Lanka. According to the literature, the various factors were identified and broadly classified under different categories. In this study, four factors are included in the research model as managers’ support, perceived usefulness, ability of bearing the cost and human resource proficiency. This study was conducted through the structured questionnaire survey method. Data was collected from 118 SMEs representing manufacturing, trading and services sectors in Matara District, Sri Lanka. The study used Partial Least Squares (PLS) path modeling to analyze the collected data. The study results disclosed that manager’s support and firm’s ability of bearing the cost have a positive and statistically significant relationship with adoption of CAS in SMEs. As per survey results, it has confirmed that there is a positive relationship between perceived usefulness and HR proficiency on adoption of CAS but it is not statistically significant.
Highlights
The development of Information Technology (IT) has had a dramatic effect on accounting information system(Ismail et al, 2003;Taiwo & Edwin, 2016).The use of IT has made a huge transformation in the way of processing transactions
Comparative Fit Index (CFI), Normed Fit Index (NFI) and Tucker Lewis Index (TLI) were used to estimate the improvement in fit in the proposed model to identify the factors affecting the adoption of Computerized Accounting System (CAS) among Small and Medium Enterprises (SMEs) in Sri Lanka
The objective of this study is to identify the factors affecting the adoption of CAS among SMEs in Sri Lanka
Summary
The development of Information Technology (IT) has had a dramatic effect on accounting information system(Ismail et al, 2003;Taiwo & Edwin, 2016).The use of IT has made a huge transformation in the way of processing transactions. CAS empowers accounting procedureswith providing accurate, fast and reliable reports(Akande, 2016;Dabor et al, 2016;Nyang‘auet al., 2015). It provides relevant and timely information(Dabor et al, 2016) for decision-making purposes.the advent of CAS has affected the form and substance of information in the business world in order to gain competitive advantages. Generating employment and revenuefor the government is the key role of SMEs(Amoako, 2013; Dabor et al.,2016;Rathnasiri,2015; Tijani&Mohammd,2013). Adoption of CAS may be a decisive factor for SMEs to reduce the problems in accounting records (Akande, 2016)
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