Effect of Accounting Information System on Business Decision Making Among Small and Medium Enterprises in Yola North, Adamawa State, Nigeria

Abstract

This study examined the effect of Accounting Information Systems (AIS) on business decision-making of Small and Medium Enterprises (SMEs) in Yola North, Adamawa State, Nigeria. The study specifically investigated three components of AIS: record-keeping systems, financial reporting systems, and cash management systems, and their influence on managerial decision-making processes. The research was anchored on Decision-Usefulness Theory. A quantitative research approach was adopted using a cross-sectional survey research design. The population comprised 1,050 registered SMEs in Yola North across four sectors: Trade & Commerce, Manufacturing, Services, and Agriculture. A sample size of 290 was determined using Taro Yamane's formula, and a stratified random sampling technique was employed to ensure sectoral representation. Primary data were collected through structured questionnaires administered to SME owners and managers. Data were analysed using descriptive statistics, correlation analysis, and multiple regression analysis. The findings revealed that all three AIS components record-keeping systems, financial reporting systems, and cash management systems have positive and statistically significant effects on business decision-making. Record-keeping is significant influenced business decision-making, underscoring their foundational role in providing accurate data for informed decisions. The model explained 34.7% of the variance in business decision-making. The study concludes that effective implementation of AIS components significantly enhances decision-making capabilities, operational efficiency, and business sustainability among SMEs in Yola North. It recommended that, investing in affordable accounting software, regular preparation of financial reports, adoption of cash flow forecasting practices, and policy interventions to promote AIS adoption.