THE RELEVANCE OF ACCOUNT IN THE GROWTH AND SURVIVAL OF SMEs IN NIGERIA
CHAPTER ONE
1.1 BACKGROUND OF STUDY
The small and medium scale industry has experience significance changes in terms of growth and survival in recent times as new business ideas and good accounting records are introduced into the sector although most of the small scale business (SSBs) are not registered as corporate bodies rather as a sole proprietorship, this made it easy for such business to get registered with stress than other form of business registration. It is evident that SMEs has grown in number more than other
forms of business and could be found anywhere in Nigeria. According to Boachie-Mensah and Marfo-Yiadom 2005) stated that in spite of their numbers, about 60% of the SSBs fail within the first five years of operation. Most SMEs fail because of their inability access finance from most of the
financial institutions since they lack proper financial records as requirement according to (William, 2008).
It has been attributed that the inability of most small scale business to survive beyond the first few month of
establishment and operation was due to lack adequate financing.
According to (Amoako, 2013) stated that to become successful and be able to contribute meaningfully to the
economy of Nigeria, SMEs must be able to attract and secure finance by themselves.
Recent studies shows that larger firms will be able bring to themselves economic and certain sophisticated
quantitative management techniques that may not practicable for small and medium scale enterprises. Small scale
business may be able to maintain closer client relation and better customer relation than the bigger companies.
According to (Abdulrasheed, Khadijat and Oyebola, 2012) stated that the differences in operation techniques may
influence the deficit in accounting method employed in generating financial information. Most firms can employ
different principles such as different inventory techniques, depreciation method, method of accounting for income
taxes and revenue recognition procedures etc.
In recent times most business unit become complex and broader on scope, accounting evolved in response to the
increased planning and control responsibilities of management.
According to (Abdulrasheed, Khadijat and Oyebola, 2012) stated that as government grows in size and become more
centralized in nature, accounting was developed to meet the increased accountability; business decision need to be
supported by good and quality financial information which need to be relevant, user friendly and available in timely manner.
THE RELEVANCE OF ACCOUNT IN THE GROWTH AND SURVIVAL OF SMEs IN NIGERIA