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Research Articles

The Adoption of Computerized Accounting System (CAS) in Small and Medium Scale Enterprises (SMEs): With Special Reference to SMEs located in Matara District, Sri Lanka

Author:

G.A.N. Darshi

University of Ruhuna, LK
About G.A.N.
Department of Accounting and Finance, Faculty of Management and Finance
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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.

How to Cite: Darshi, G.A.N., 2019. The Adoption of Computerized Accounting System (CAS) in Small and Medium Scale Enterprises (SMEs): With Special Reference to SMEs located in Matara District, Sri Lanka. Sri Lanka Journal of Economic Research, 7(1), pp.77–91. DOI: http://doi.org/10.4038/sljer.v7i1.41
Published on 01 Dec 2019.
Peer Reviewed

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