The Influence of Accounting Information System on Financial Performance of Small and Medium-Sized Enterprises in Kangar, Perlis

Abstract

Accounting Information Systems (AIS) play a pivotal role in shaping the financial performance of companies in Malaysia, with particular significance for Small and Medium-Sized Enterprises (SMEs). However, the intricate nature of AIS presents formidable challenges and barriers for SMEs, necessitating a thorough examination of its impact on their operational efficiency and financial outcomes. This study aims to elucidate the nexus between AIS and SMEs' financial performance by focusing on three crucial variables: timeliness, transparency, and accuracy. The study employed questionnaire surveys, with a total sample size of 357 respondents drawn from a population of 4,735 SMEs in Kangar, Perlis. Utilising SPSS Statistics Software, the collected data underwent rigorous analysis, including correlation and multi-regression analyses. The results underscored a highly significant impact of timeliness, transparency, and accuracy of AIS on SMEs' financial performance. These findings offer invaluable insights into the pivotal role of AIS in augmenting SMEs' financial performance, highlighting avenues for optimising their accounting systems. By shedding light on the intricate dynamics between AIS and SMEs' financial outcomes, this research contributes to a deeper understanding of the mechanisms underpinning effective financial management in the SME sector. Moreover, it provides actionable recommendations for SMEs to leverage AIS effectively, thereby enhancing their competitiveness and sustainability in the dynamic business landscape of Malaysia.