Factors Affecting the Adoption of Formal Accounting Systems by SMEs

Small to medium-sized enterprises’ (SMEs) poor performance is often ascribed to external factors such as burdensome character of the legal framework, limited scope to penetrate the export market and access to finance. However, internal factors such as marketing, operation and in particular accounting services may be equally responsible to such state of affairs. This study therefore attempts to analyse the importance attached to formal accounting systems among the small to medium-sized Mauritian manufacturing firms operating in six main industry groups. The research findings are based on a comprehensive survey of the financial and working capital management practices of 141 SMEs. Additional rigour to the research findings was possible through the use of 12 mini case studies.