Factors Affecting Adoption Of Computerized Accounting Systems By Small And Medium Sized Manufacturing Firms In Nairobi County

Abstract

The use of computerized accounting systems (CAS) helps ensure that any firm produces reliable financial reports that simplify and improve the effectiveness of aggregate accounting processes and procedures. Manufacturing companies face barriers to the implementation of accounting systems due to internal and external factors. Some of the failures of industrial companies is due to the inability of businesses to obtain accounting reporting structures. The implementation of a computerized accounting system plays a very important role in enabling consumers of financial information to achieve their financial objectives. The study aimed at evaluating the factors that affected adoption computerized accounting system by medium and small sized manufacturing firms in Nairobi County. The study was guided specifically by the following objectives; To determine extent to which accounting expertise affected adoption of computerized accounting system in by medium and small sized manufacturing firms in Nairobi County, To examine extent to which technological change affected adoption of computerized accounting system by medium and small sized manufacturing firms in Nairobi County and To establish the extent to which cost affected adoption of computerized accounting system adoption by medium and small sized manufacturing firms in Nairobi County. A descriptive research design was adopted in the study. Data collection was carried out using the primary approach and the standardized questionnaire was administered personally. The data collected was analyzed using Stata. The population for this study was small and medium sized manufacturing companies in the county of Nairobi. The study used a survey of 181 manufacturing firms. Robust regression analysis was used as a statistical method to estimate the relationship that occurred. The results indicated that accounting expertise, cost and technological change affected the adoption of computerized accounting systems by medium and small sized manufacturing firms in Nairobi County. The study recommended that owners and managers of small and medium sized manufacturing firms should consider accounting expertise, cost and technological change in order to bring efficiency and effectiveness in their firms through providing accurate and reliable reports to users of financial information.