Abstract:
This study assessed the impact of accounting information system on borrowing cost in
Ghana. Specifically, the study explored SMEs motivation for adopting Accounting
Information Systems, the factors that influence Loan Officer’s decision to provide
credit to SMEs, the relationship between financial reporting benefits of using AIS and
SMEs access to credit and the impact of Accounting Information system usage on
SMEs Borrowing Cost. The study deployed both mixed research approach where data
was collected from the Chief Accountant or finance officers of 7 SMEs who were
purposively targeted by the researcher. Also, the study collected data from the Chief
Executive Officer (CEO), deputy CEO, loan officers and deputy officers operating in
the head offices of the 13 microfinance institutions in the Kumasi Metropolitan
Assembly to achieve the other research objectives. The findings of the study revealed
that SMEs adopted AIS to improve their decision-making quality from the data
reported to managers and also to maintain the quality level of this information. Also,
loan officer’s perception of SMEs honesty in terms of financial reporting and
competence through the quality of their financial reporting data were revealed to be
associated with their decision to extend credit to SMEs or otherwise. Moreover, the
results of the study revealed that, AIS usage has a negative and statistically significant
relationship with SMEs cost of borrowing. Base on the findings of the study, the
researcher recommended that the government through the NBSSI (National Board for
Small Scale Industries) and other regulators of SMEs in Ghana in their attempt to
sustain businesses and increase employment should put out strategic plans such as
providing subsidized loans to SMEs solely for the procurement of AIS to help
majority of SMEs in Ghana use AIS so that they can make better decisions and also
attract lower cost on their borrowed funds.
Description:
A Dissertation in the Department of Accounting, School of Business,
submitted to the School of
Graduate Studies, in partial fulfillment
of the requirements for the award of the Degree of Master of
Business Administration
(Accounting)
in the University of Education, Winneba
DECEMBER, 2022