AN EVALUATION OF THE EFFECT OF ACCOUNTING RECORDS ON THE PERFORMANCE OF SME IN NIGERIA A STUDY OF SELECTED SMES IN LAGOS METROPOLIS
The research provides a theoretical and case study appraisal on the elect
of accounting records on the performance of SME in Nigeria. It elucidates the
nature and significance of accounting records and determines the levels of performance of SMEs. The research projects the nature, growing importance and
contributions of SME’s to the development of the economy. It provides a case study appraisal of selected SME’s in Lagos metropolis as a measure to provide a practical perspective to the study.
1.1. BACKGROUND OF THE STUDY
Small and medium –scale enterprise (SMEs) play very important roles in the process of industrialization and sustainable economic growth (Ogujiuba, Ohuche
and Adenugs, 2004) since the 1960s to date SMEs are being given due recognitions especially in the developed nations for playing very important roles
towards fostering accelerated economic growth development and stability within several economies (Gunu;2004) (Orugu, 2005; Aremu, 2010) they make up
the largest proportion of business all over the world and play tremendous roles in employment generation provision of goods and services, creating a better
standard of living as well as immensely contributing to the Gross Domestic Products (GDP) of many countries (Ihua, 2009, Paul, 2010) SME’s sub-sector came
into the mainframe of policy formation in Nigeria owing to its contributions (Obamuyi, 2007). Like in the developed countries, SME’s have enabled
entrepreneurship activities through which employments have been generated and poverty reduction and sustainable livelihood achieved (Ogujiuba et al
2004). It makes up about 97% of businesses in Nigeria and provide an average 50% of Nigeria employment and its industrial output (Anyo, 2005). Government
and development epacts have therefore realized the fact that SME’s possess the needed catalyst to turn the economy around for good. (Uchechukwu, 2003; Anyanwu, 2003).
SME’s in Nigeria need the necessary financial back up to improve operations build capacity and grow. But these laudable objectives are besieged with the poor nature with which SME’s are operated and managed. Many SME’s lack accurate financial record of their business operations, the inability to make proper accounting, results to waste and loss of profit. Lack of basic accounting practices in most SME’s in Nigeria tends to compound their financial challenges.