Accounting Practices of Small and Micro Enterprises in North Shewa Zone Amhara Regional State of Ethiopia

Abstract

The government of Ethiopia gives special emphasis for small and micro enterprises in recent periods for the development of the country and faces various challenges. One of the most critical problems is related to proper recording of accounts and preparation of financial reports. The main objective of this study therefore to examine the accounting practices of Small and Micro enterprises in north shewa zone of Amhara regional state of Ethiopia. 305 Small and micro enterprises were selected as samples from five town administrations of north shewa zone. The researcher used purposive non probability sampling techniques to select towns and disproportionate stratified random sampling techniques which involve dividing the population into homogeneous subgroups in to sector wise (construction, urban agriculture, manufacturing and trade). The study was revealed that more than 50% of the respondents do not keep the accounting records totally due to the reason that lack of accounting knowledge, required more cost, waste of time, more labor intensive. Even for those respondents who prepare accounting records the main constraint faced with them for proper accounting record is lack of accounting knowledge. Therefore, the researcher recommended that the concerned governmental institutions Debre Berhan University, North Shewa zone small and micro enterprises office and north shewa zone TVET colleges arrange training`sessionstraining`sessions for those enterprises.