THE IMPACT OF IMPLANTATION E-ACCOUNTING SYSTEM ON

PERFORMANCE SMEs IN MOGADISHU-SOMALIA

BY
Mohamed Omar Abuhadi
Ramla Abdikadir Ibrahim
&
Ikran Abdiwahid Hussein

A PROPOSAL PROJECT SUBMITTED IN PARTIAL FULFILLMENTS OF THE

REQUIREMENTS
FOR THE DEGREE IN BACHELOR
OF ACCOUNTING

FACULTY OF ACCOUNTANCY
SIMAD UNIVERSITY

2023

i
 DECLARATION A
We are hereby declaring that this proposal is from our own work and effort, and that it has not
been presented anywhere else for any award. All sources of information used in this proposal
have been cited and referenced.

Name of the Candidate: Mohamed Omar Abuhadi

Signature: __________________
Date: / / 2023
Name of the Candidate: Ramla Abdikadir Ibrahim
Signature: __________________
Date: / / 2023

Name of the Candidate: Ikran Abdiwahid Hussein

Signature: __________________
Date: / / 2023

ii
 DECLARATION B
I officially state that I have supervised and studied this proposal and that in my opinion, it
conforms to acceptable standards of academic presentation and is fully adequate. I hereby also
confirm that the research proposal was conducted in accordance with degree regulations and
University Research Project Manual (RPM).

Name of the Supervisor: Mohamed Ismail

Signature: __________________

Date: / / 2023

iii
 DEDICATION
This research proposal is dedicated to my family members, mentors and my close friends. Thank
you for your support and endless encouragements.

iv
 ACKNOWLEDGMENTS

First and foremost, we have to thank my research supervisor Mr. Mohamed Ismail. Without his
assistance and dedicated involvement in every step throughout the process, this thesis would
have never been accomplished. We would like to thank you very much for your support and
understanding. We also appreciate for your kindness and helpfulness.

We wish to acknowledge people who have greatly influenced and facilitated the process of
preparing this graduation project, without whom it would have been difficult to accomplish on
our own.

Special appreciations go to the Managers and employees of SMEs in Mogadishu Somalia who
are going to respond our research questionnaire in order to reach our objective. We appreciate
any help they give us.

Most importantly, none of this could have happened without our families. Our families, who
offered their encouragement and their financial support every week – despite our own limited
dedication to correspondence. With their own brand of humor, they had been kind and supportive
to me over the last several years. To our parents and our beloved brothers and sisters– it would
be an understatement to say that, as a family, we have experienced some ups and downs in the
past three years. Every time we were ready to quit, you did not let us and we are forever grateful.
This dissertation stands as a testament to your unconditional love and encouragement.

v
Table of Contents
DECLARATION A.....................................................................................................................................ii
DECLARATION B....................................................................................................................................iii
DEDICATION..........................................................................................................................................iv
ACKNOWLEDGMENTS............................................................................................................................v
CHAPTER ONE....................................................................................................................................- 1 -
1.1 BACKGROUND OF THE STUDY.......................................................................................................- 1 -
1.2 PROBLEM STATEMENT.................................................................................................................- 3 -
1.3 RESEARCH OBJECTIVE...................................................................................................................- 5 -
1.4 RESEARCH QUESTIONS.................................................................................................................- 5 -
1.5 SIGNIFICANCE OF THE STUDY.......................................................................................................- 5 -
1.6 SCOPE OF THE STUDY...................................................................................................................- 6 -
1.6.1 CONTENT SCOPE........................................................................................................................- 6 -
1.7 OPERATIONAL DEFINITIONS OF KEY TERMS.................................................................................- 6 -
CHAPTER TWO..............................................................................................................................- 8 -
2.0 INTRODUCTION............................................................................................................................- 8 -
2.1 DEFINITION AND CONCEPT OF THE E-ACCOUNTING.....................................................................- 8 -
2.1.1 ONLINE ACCOUNTING SYSTEM..................................................................................................- 9 -
2.1.2 INFORMATION TECHNOLOGY COST........................................................................................- 10 -
2.1.3 INFORMATION AND COMMUNICATION TECHNOLOGY..........................................................- 11 -
2.2 SMALL AND MEDIUM ENTERPRISES............................................................................................- 13 -
2.3 E-ACCOUNTING AND SMES.........................................................................................................- 13 -
2.4 THEORETICAL FRAMEWORK.......................................................................................................- 14 -
2.5 CONCEPTUAL FRAMEWORK.......................................................................................................- 16 -
Figure 1.1: Conceptual Framework................................................................................................- 16 -
2.6 CONCLUSION..............................................................................................................................- 17 -
CHAPTER THREE...............................................................................................................................- 18 -
3.0 INTRODUCTION..........................................................................................................................- 18 -
3.1 RESEARCH DESIGN......................................................................................................................- 18 -
3.2 OPERATIONAL DEFINITIONS OF KEY VARIABLES.........................................................................- 19 -
3.3 RESEARCH INSTRUMENT............................................................................................................- 20 -
3.4 RESEARCH POPULATION.............................................................................................................- 20 -
3.5 SAMPLE SIZE...............................................................................................................................- 21 -

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3.6 SAMPLING TECHNIQUE...............................................................................................................- 21 -
3.7 DATA COLLECTION AND GATHERING METHOD...........................................................................- 22 -
3.8 DATA ANALYSIS..........................................................................................................................- 22 -
3.9 ETHICAL CONSIDERATION...........................................................................................................- 23 -
REFERENCE.......................................................................................................................................- 25 -

vii
 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

E-accounting involves making use of accounting software and computers to record, store and

analyze financial data (Esmeray and Esmeray, 2020), and it makes sure that the information of

critical financial is controlled, accurate and safe from corruption of data. E-accounting accuracy

facilitates speed and lower cost of handling the business operations (Cong et al., 2019) .

It eliminates some of the mundane and time-consuming tasks associated with hand- operated

(manual) accounting (Je˛drzejka, 2019), and it facilitates all the procedure (calculations),

including additions and deduction, are done automatically by software (Uzrail and Bardai, 2019;

Suyono et al., 2019).

Online accounting solutions make it easier for different individuals to access accounting

information outside of the workplace in a secure manner (Teru et al., 2019). E-accounting helps

to prepare the financial statements and ensures high reliability (Bataineh, 2018) and it helps to

records, keep, move data through using a software system easier than shifting through a bunch of

documents (Teru, 2019) .

In Mexico, the Ministry of Finance and Public Credit apply their tax policies through the Tax

Administration Service (SAT), this body indicates that electronic accounting (e-accounting) for

tax purposes is ‘sending files in XML format (Extensible Markup Language) of registered

transactions via electronic means that a company or a person sends to their tax email account’

(SAT, 2015) transactions. The obligation to submit electronic accounting comprises of preparing

1
the following: chart of accounts, trial balance, and if required, policies and supporting documents

(SAT, 2015).

It is important to note that Mexico is the protagonist of a reform proposed by the OECD

(Organization for Economic Co-operation and Development) on the use of new technologies to

improve fiscal control of the country, which is why it is crucial for the entire international

community to study the implementation measures that were taken and the obstacles encountered

in its adoption. This arose from the low tax collection in Mexico, despite high tax rates, this is

due to weaknesses in the application of tax legislation which are affected by the lack of fairness

and transparency of the tax system (OECD, 2012).

The aim of this study was to describe and analyze the adoption and implementation of electronic

accounting by companies in Mexico .(Rodriguez Venegas and Espinoza Mosqueda 2017) .

In Oman , Adoption and use of E-accounting are common for a majority of the companies in

developed countries. But technological adoption and information and communications

technology (ICT) usage among the Omani small and medium-sized enterprise (SME) industry is

yet to reach a much-desired level (Thottoli et al., 2019).

In Oman, the oil and gas sector will have price challenges in the future, and the government

relies on now are the sectors of the non-oil industry such as e-commerce, services, and so on

which require attention and intervention by researchers or scholars that helps to develop a

sustainable competitive culture among SMEs which ultimately contribute to the economy of the

country. Since there are no specific researches, as to the author’s knowledge, some serious

ambiguities are existing in the field of E-accounting practices among SMEs in Oman. (Teru,

2019) .

2
In Somalia, private companies are increasing in size as they range from small, medium and large

scale. These organizations/business companies from telecommunication, export, importers, and

others usually make up diverse nature of business and commerce in the country. These

companies are vividly seen mainly in the forms of business partnership and corporations and are

likely to use Electronic accounting system after manual accounting system Poor understanding

the importance of use Electronic accounting system. (Hassan, 2020)

Considering the importance of Somali business organization and how imminent it is for them to

manage and to use Electronic accounting system implication on their wellbeing, it therefore

become pertinent to conduct a research on the impact of Implementation of E-Accounting

System on Financial Performance, using these companies as a focal point since the sales and

production capability of the companies will directly have a great impact on the National

economy. (Hassan, 2020)

1.2 PROBLEM STATEMENT

E-accounting involves making use of accounting software and computers to record, store and

analyze financial data (Esmeray and Esmeray, 2020), and it makes sure that the information of

critical financial is controlled, accurate and safe from corruption of data. (Thottoli, 2021) .

Manual accounting systems have proved to be time and space consuming. Most SMEs have

failed to produce their month-end management reports and annual financial statements

accurately and in time. (Sandra 2019) .

Accountants at small businesses appear to be underutilizing electronic accounting software. Lack

of qualified staff with electronic accounting ability, lack of electronic facilities and

infrastructure, inadequate training and retraining of accountants/staff to acquaint them with the

3
development of new technologies, and other reasons can be attributed to SMEs' under-utilization

of electronic accounting software’s/tools, according to Adejola (2012).

The present information technology trend emphasizes the importance of maintaining paperless

workplaces in which accounting officers are expected to capture, save, and retrieve accurate data

utilizing paperless accounting systems. This can only be accomplished if SMEs implement and

use electronic accounting.

However, a large majority of Business adopt a manual accounting system, and many others do

not engage in any form of accounting at all .The manual accounting system is known for its

slowness and difficulties in retrieving financial information. Many organizations are failing in

business, because of unavailability of high technology or trained staff .

To ensure the gaps by providing new evidence on the organizational determinants that influence

the implementation of e-Accounting on performance SMEs particularly in Mogadishu.

Therefore, there is a need for businesses to adopt E-accounting as a replacement for traditional

practices for efficient performance. This study aims to fill the above mentioned gap by

investigating factors that influence the E-accounting system particularly, the main objectives of

this study is to investigate the effect of E-accounting system (Online Accounting System, IT

Cost and ICT ON SME performance) in Mogadishu Somalia .

4
1.3 RESEARCH OBJECTIVE

1. To investigate the effect of Online Accounting System on SMEs performance in Mogadishu

Somalia

2. To investigate the effect of Information Technology Cost on SMEs performance in

Mogadishu Somalia

3. To investigate the effect Information and Communication Technology on performance SMEs

in Mogadishu Somalia

1.4 RESEARCH QUESTIONS

1 What is the effect of on Online Accounting System performance SMEs in Mogadishu

Somalia?

2 What is the effect of Information Technology Cost on performance SMEs in Mogadishu

Somalia?

3 What is the Impact of Information and Communication Technology on performance SMEs in

Mogadishu Somalia?

1.5 SIGNIFICANCE OF THE STUDY

Future researchers will benefit from this study because it provided as a source of knowledge as

well as a guideline for them to follow in following studies on the same issue.

The study will be useful for both public and private institutions because it will keep them

updated on current concerns as well as how to manage them properly.

It also motivates them to take the appropriate measures to find long-term solutions to the

difficulties they face. Every organization or business company will profit from the study because

it raises awareness of the problem and the need to address it. This will benefit the organization's
5
managers, employees, stakeholders, and other partners. to persuade the organizations easily

consume the services that are intended to address the problem .

1.6 SCOPE OF THE STUDY

This study was conducted between June 2022 to Feb 2023.This is the time period that university

has allocated for the students to conduct their studies. This study was conducted in Mogadishu,

Somalia. Mogadishu provides an optimum location for this type of study because since many

businesses are based and operate there.

1.6.1 CONTENT SCOPE

This study was focused on the Impact of Implementation of E-Accounting System on

performance SMEs .

1.7 OPERATIONAL DEFINITIONS OF KEY TERMS

ELECTRONIC ACCOUNTING SYSTEM: Is any accounting system that involves the

application of computing, mobile, and Internet technologies in performing accounting functions

E-accounting or online accounting is that in which all the transactions are recorded in an online

server or database (Teru, 2019).

SMALL TO MEDIUM ENTERPRISE (SMEs) : a Small business that employ not more than

50 people (Sandra, 2019).

INFORMATION TECHNOLOGY COST (IT COST) : are mainly related to the price of

accounting software, implementation cost, software customization costs and redesigning of

accounting software costs. (Thottoli, 2021)

6
INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) is defined as any

technology that facilitates communication and assists in capturing, processing and transmitting

information electronically (Apulu & Latham, 2009).

ONLINE ACCOUNTING SYSTEM (OAS):are cloud-based application systems that use the

internet to access and maintain business accounting records .

7
 CHAPTER TWO
LITERATURE REVIEW

2.0 INTRODUCTION

This chapter presents different literatures related to the impact of implantation E-Accounting On

SMEs in Mogadishu. These literatures will be retrieved from various books, journals, articles and

studies related to the same problem under investigation.

2.1 DEFINITION AND CONCEPT OF THE E-ACCOUNTING

E-Accounting or Online Accounting is new development in field of accounting. It means all your

transactions will record in online server or data base, just like website or blog or web blog. But

for opening or making accounts will uses login ID and password. (Fatima, 2016)

E-accounting or online accounting: is the application of online and internet technologies to the

business accounting function. It is a new development in the field of accounting and is adopted at

the international level. E-accounting or online accounting is that in which all the transactions are

recorded in an online server or database. (Teru, 2019) .

A system is a set of interrelated components that interact to achieve a goal (Romney and

Steinbart, 2006). In support of this O’ Brien and Marakas, (2009) define a system as a set of

interrelated components with a clearly defined boundary, working together to achieve a common

set of objectives by accepting inputs and producing outputs in an organized transformation

process. An Information System (IS) is a system with its resources identified as people,

hardware, software and data. The people involved are end users as well as (IS) specialists.

According to Romney and Steinbart, (2006) an Accounting Information System is a system that

collects, records, stores, and processes data to produce information for decision making.

8
2.1.1 ONLINE ACCOUNTING SYSTEM

OAS is a new technology designed to build advanced capabilities for management accounting. It

offers a means to control and to facilitate the accounting and controlling function with the aim of

helping performance SMEs to achieve a balance between liquidity and profitability (Liu, 2012).

By using Accounting information systems organization can enhance their performance.

Accountants need to develop new skills in order to work effectively and efficiently with new

technologies such as , big data, data analysis, and mobile technology. To a large extent, artificial

intelligence and process automation have taken over accountants’ professional duties. This can

create more complex activities for accountants, such as business analysis and advising (Rîndaşu,

2017).

The accounting professionals can be as an assistant in providing to accounting innovation.

Mobile technology can be used to improve the process of accounting recording for small and

medium entrepreneurs. For example, cloud accounting technology is one successful solution

derived from cloud computing that enables the storage and processing of corporate financial and

accounting documents in the cloud (Tudoran & Ionescu, 2014). This initiative is likely to appeal

to SMEs that want to provide information to customers (Bankosz & Kerins, 2014). Mobile

accounting applications are easy for SMEs to use. However, the effectiveness of existing

accounting applications needs to be analyzed.

Changes in technological developments that require significant financial reporting can be made

easily and quickly so that users of financial statements can make decisions quickly. There are

several important factors that should be considered when selecting an accounting system to

create financial statements (Ghasemi, Shafeiepour, Aslani, & Barvayeh, 2011).

9
2.1.2 INFORMATION TECHNOLOGY COST

IT makes SMEs record, process and keep their accounting functions efficiently, accurately, and

timely. IT cost are mainly related to the price of accounting software, implementation cost,

software customization costs and redesigning of accounting software costs. The most important

cost that affects the adoption of software to provide accounting

10
service is that the price of the accounting software which is provided by the software vendor

(Dinha and Dob, 2020; Putra, 2019). Effective implementation of AIS in an organization incurs

implementation costs (Suyono et al., 2019). Accounting service enterprises may incur initial

training and annual training of employees cost for accounting software application (Hien et al.,

2019; Hossain and Rahman, 2019). Customization of accounting software is one of the

determinant factors which affects the interests of SMEs to use accounting applications (Putra,

2019). SMEs undergoing AIS redesign may lead to redesign their existing accounting software

as part of operational control and process (Turner et al., 2020; Ghorbel, 2019).

SMEs which have accounting software may go for upgrading software at some point. This

software maintenance and up-gradation cost are one of the factors that affect the interests of

SMEs using accounting applications to enhance the core program’s functionality and rise

software up-gradation (Putra, 2019; Mauricette, 2019). The majority of review of literature

provided IT cost that affect E-accounting or accounting software adoption of any organization.

IT cost positively associates with E-accounting practice.

2.1.3 INFORMATION AND COMMUNICATION TECHNOLOGY

ICT has made available new technology like software accounting packages which have made

accounting process very easy and time saving (Ogundana, 2017).

Information and Communication Technology (ICT) facilitates communication and assists in

capturing, processing and transmitting information electronically (Apulu & Latham, 2009).

SMEs have with time seen the positive impact that ICTs, such as computer terminals, e-mail,

internet and their applications can have on their business.

11
Information and Communication Technology (ICT) covers technologies like the simple

telephone, point-of-sale systems, stand-alone PCs, networked environments, Internet, and credit

card facilities.

The primarily digital technologies designed to collect, organize, store, process and communicate

information within and external to an organization and, in our case, SMEs (Ritchie & Brindley

2005).

ICT is a broad concept that covers Information Systems (IS), Information Technology (IT) and

digitalization. Many authors (Martin & Matlay, 2001

ICT brings changes in the global information flow, behavior, patterns and options of customers,

and SMEs stand to benefit from ICT in reduced transaction costs, inventory controls, quality

controls, access to a wider market space and leveraging economies of scale (Ritchie & Brindley,

2005). According to Moodley (2002), ICT is an enabler for global networking economy as it

offers enterprises a wide range of possibilities for improving their competitiveness.

They also provide mechanisms for getting access to new market opportunities and specialized

information services such as distance consulting, continuous training, new advisory modes use of

ICT to introduce, reinforce, supplement and extend skills (Pisapia, 1994) and its integration has

been attracting a great deal of interest among researchers in professional development

communities and human-computer interaction circles .

12
2.2 SMALL AND MEDIUM ENTERPRISES

Small and Medium Enterprises have been classified in a variety of ways based on the amount of

money invested, the size of the company, the number of people employed, and the ownership

and management structure.

SMEs are entities which do not have onerous requirements of filing their financial statements

with any regulatory body for the purpose of issuing financial instruments.

In Zimbabwe, the Ministry if SMEs (2000) defines a small enterprise as a business that employ

not more than 50 people while operating as a registered entity and a medium enterprise as one

employing up to 75 and 100 people.

On the other hand, the International Accounting Standards Committee Foundation (2007) defines

an SME as an entity that does not have public accountability and thus publishes general purpose

financial statements for external users.

Small and medium-sized businesses play a significant part in industrial prosperity; they

contribute to eliminate poverty by creating jobs, which serve as a source of national outputs and

profits. Small and medium-sized businesses (SMEs) serve as incubators for emerging

entrepreneurs and huge organizations, and they are valued partners of large firms since they

provide and deliver support services. They may lack the experience to execute comprehensive

accounting processes, however accounting systems are extremely valuable to these

organizations.(Osinowo 2018) .

13
2.3 E-ACCOUNTING AND SMES

The change was measured through the level of acceptance of technology. The research

confirmed that the relationship between perceived usefulness and ease of use contributes positive

to accounting information system adoption among public sector organizations. (Sandra, 2019)

Abdulla (2009) investigated accounting information systems based on usefulness and ease of use

only. He furthermore termed the behavioral and performance change of technology acceptance

that are expected to occur through performance application to business functions of public sector

organizations in Tripoli Libya .

Research by Ismail (2006) examined Accounting Information Systems effectiveness and its

influencing factors in the context of SMEs in Malaysia. The proposed model examined the

impact of AIS sophistication, manager participation in AIS implementation, manager AIS

knowledge. The results showed that manager accounting knowledge, and the effectiveness of

vendors and accounting firms significantly contributed to AIS effectiveness. This study suggests

that managers need to acquire sufficient accounting knowledge to better understand the business

information requirements. Ismail and King (2007) concluded that the development of a sound

accounting information system in SMEs depends on owner-manager’s level of accounting

knowledge.

Research conducted by Duxbury et al (2002) found that the main perceived barriers to

implementation computer technologies among Canadians were lack of financial resources and

the skilled personnel. Both strong and managerial and strategic competencies were a deficiency

in SMEs hence it results in failure to adopt accounting information systems.

14
2.4 THEORETICAL FRAMEWORK

OAS can be a boon for SMEs as they no longer need to rely consistently on their accountants, or

the filing of statutory returns. They need no longer be concerned about the consequences of

incorrectly performing the task. In addition to this, OAS can have a beneficial effect on time

management, productivity and the flexible working practices of small businesses(Osinowo

2018).

The ability of OAS users casually retrieving their financial data stored on the vendor’s server and

accounts can be processed by the software user anytime and anywhere, using any device with

internet access – even on a mobile phone. This means that information can be distributed

seamlessly and instantly, reducing the possibility of errors and confusion (ICAEW, 2010).

Computers, servers, the Internet, wireless and personal digital devices have forever transformed

the way companies conduct business. Software packages have also improved traditional

operations and production processes. Accounting has seen tremendous advancements thanks to

the growth of information technology. Accounting software automates the traditional paper

ledgers and accounting books. These software packages may come with a variety of specialized

features or a generic program that can be customized to current business operations. (Ghasemi et

al. 2011) .

Companies usually choose accounting programs based on the size of their operations and the

number of users accessing the system. Large companies may choose system-wide software

packages, such as an enterprise resource planning system. Information technology (IT) has

created significant benefits for accounting departments.(Teru, Idoko, and Bello 2019)

15
IT networks and electronic systems have reduced the amount of time accountants need to prepare

and present financial information to management and stakeholders. IT has not only reduced the

time required to present financial information, but it has also increased the overall efficiency and

accuracy of the information.( Ogundana et al 2017) .

16
2.5 CONCEPTUAL FRAMEWORK

ONLINE
ACCOUNTIG
SYSTEM

INFORMTION
TECHNO OGY
SMEs
COST

INFORMATION AND
COMMUNICATION
TECHNOLOGY

Figure 1.1: Conceptual Framework

17
2.6 CONCLUSION

Technological progress, both the preparation of a document and arrangement of accounting

records have been carried out in electronic environment. The fast development of e-accounting

has a great impact on e-accounting.

By means of this development, information is generated by the accounting system that has come

to a level that generates extremely various information in a short time completely to the

information users. In other words, E-accounting practices have provided saving of time,

synchronous and comparable presentation of financial statement has become easier. Based on the

findings of the study, it was concluded that usage of electronic accounting by small and medium

scale enterprises has the potential to improve their performance in financial reporting of

activities in the organization.

18
 CHAPTER THREE
RESEARCH METHODOLOGY

3.0 INTRODUCTION

This chapter discussed the methodology of the study. The chapter is organized into several main

parts. The first section presents research design method, the second section focused on research

population Including sample size and sampling procedure, the third section provides research

instrument and Quality with the validity and reliability of the instrument, the fourth section will

discuss data Collection/gathering procedures and data process.

3.1 RESEARCH DESIGN

This study employed the descriptive correlational and a cross sectional survey design. This

research design enabled description of study findings using central tendencies such as mean and

establishment of relationship between the study variables through correlation (Bougie, 2013).

The cross-sectional survey design was used to collect data from a large sample of respondents in

a short time. However, this study we use the quantitative approach Thus, through this design, the

relationship between computerized accounting systems and business growth in Mogadishu,

Somalia.

19
3.2 OPERATIONAL DEFINITIONS OF KEY VARIABLES
Variable Operational Definitions Sources

ELECTRONIC Is any accounting system that involves the application of (Teru, 2019).
ACCOUNTING computing, mobile, and Internet technologies in
SYSTEM performing accounting functions E-accounting or online
accounting is that in which all the transactions are
recorded in an online server or database

SMALL TO Small business that employ not more than 50 people (Sandra,2019)
MEDIUM (Sandra, 2019)
ENTERPRISE
(SMEs)
IT COST are mainly related to the price of accounting software, (Thottoli,2021)
implementation cost, software customization costs and
redesigning of accounting software costs. (Thottoli, 2021)

AMOBILE Should let its users access, encode, and process accounting (Rahmayanti,
ACCOUNTING data wherever and whenever, regardless of the device 2018)
APPS used, so you want one that’s easy to use and accessible
through different platforms.

Small,and are named by adjectives indicating size, thus economists (Hatten: 2011).
medium tend to divide them into classes according to some
enterprises quantitative measurable indicators
(SMEs)

20
3.3 RESEARCH INSTRUMENT

This study will use questionnaire instrument as tool for collection data, which used in

quantitative research and questionnaire was adapted from (Tandoh, 2011). Questionnaire may be

defined as technique of data collection in which each person will ask to respond to the same set

of questions in prêt ermined order. The selection of this tool has been guided by the nature of

data to be collected, the time available as well as by the objectives of the study and the overall

aim of study is to investigate “Islamic insurance and risk reduction”. And questionnaire

techniques have been adopted in collecting primary data as it provides an efficient way of

collecting responses from a large sample size.

The researcher will use questionnaire of this study because of the population is literate, time

constraints and information needed can be easily described in writing. (Oso&Onen, 2008)

Researchers was select questionnaire as it has the following advantages: first. It provides

efficient way for collecting responses from a large sample. Second, it requires less skills and

sensitivity than semi-structures and in- depth interviews (sounders et al., 2009)

3.4 RESEARCH POPULATION

The study population consists of a few chosen retailers with headquarters in Bakara Market in

Mogadishu Somalia . Some researchers were chosen for their extensive experience in the field.

167 respondents from 3 merchandising businesses in Mogadishu, Somalia, were the study's

target audience.

21
3.5 SAMPLE SIZE

A sample is part of the target (accessible) population that has been procedurally selected to

present it. The sample was consisting of 118 participants selected from merchandising. These

participants have been chosen according to the possibility of getting accurate information. to

determine the ideal sample size for a population, the study was use Slovene’s formula which is

n=N/ (1+ (N*e^2)), where n= sample size, N= population size, 98 and e = margin of error of 5

%. n=167/ (1+ (167*0.0025)) = 118 participants.

NO Sector Selected employee

1 Cifow Electronic Co. 45
2 Lemon Enterprise Ltd 34
3 Cadaani Classic Style 39
Total Sample size 118

Source: Researchers, 2022

3.6 SAMPLING TECHNIQUE

The sampling procedure was employed in this study was be non-probability sampling procedure

especially purposive sampling. Purposive or judgment sampling is based on the assumption that

the researchers is able to select elements which represent a „typical sample‟ from the appropriate

target population (Saunders et al,). The researchers were select purposive sampling because they

were able to judge and choose population members who are good prospects for accurate

information and it also was save time and cost.

22
3.7 DATA COLLECTION AND GATHERING METHOD

To ensure the purpose of this study, data was being collected through adopted questionnaire as it

is the easiest way to gather right information according the nature of this study The

Questionnaire was collect by hand as it enables to assist the respondents to answer what they

want to clarify. Data was being collected from merchandising and Manufacturing businesses in

Mogadishu. In order to collect data from respondents the researchers were employ a

questionnaire adapted from prior literature.

The questionnaire was being delivered and collected from respondents by hand in order to guide

the respondent they need some clarification about the questionnaire. This research study used

questionnaire as instrument; the questionnaire will be based on close end and open. The

researcher will visit the respondents working place to reduce interruption for their working place,

however the researcher was administering focused group after working hours as this will the time

when employees were free to spare more time for the answering the questions. The researcher

first booked an appointment with the target respondents to ensure a high turnout rate.

3.8 DATA ANALYSIS

The data will be analyzed using descriptive and illustrative statistics (mean, standard deviation

frequencies etc.) Regression and correlative analysis would be performed using Statistical

Package for Social Scientists (SPSS). Excel would also be used in making simple calculations in

order to answer the research topic, the study used two data collection methods. The data was

collected using a closed-ended questionnaire. Closed ended questions have the advantage of

saving respondents' time and making data processing much easier (2008). The advantage of the

questionnaire approach over other data collection methods is that it allows for the collection of

information from a bigger sample (Amin, 2005 analysis was also utilized to collect data in this

23
study). The benefit of document analysis was that it made it simple to collect data from a bigger

group of people (Oso and Onen 2008). Document analysis has the benefit over other data

collection approaches in that essential information can be gathered from a bigger sample at once.

Quantitative data analysis was being used in this study. Analyses were being carried out with the

aid of the Statistical Package for Social Sciences, (SPSS).

Descriptive statistics are used to describe the data collected in research studies and to accurately

characterize the variables under observation within a specific sample (Marcy, DE Matteo, &

Festinger, 2005). Descriptive statistics is the use of measure of central tendency provides

researchers with a way of characterizing a data set with a single value. The most widely used

measures of central tendency are the mean, median, and mode (Marcy, DE Matteo, & Festinger,

2005).

3.9 ETHICAL CONSIDERATION

The issue of ethics is very important in research. Despite the high value of knowledge gained

through research, knowledge cannot be pursued at the expense of human dignity (Oso & Omen,

2008). Thus, the data collected was kept confidential and was exclusively used for the purpose of

Bachelor degree requirements. The respondents were informed of the contents and the aims of

the research prior to administration of the instrument. This research was fully conducted ethically

and all copyrights were observed and where permission was required to reproduce materials was

sought. In addition, the researchers were request from the academic department a certificate of

confidentiality so as to get confidentiality and the researchers was Provide the participants with

information about the purpose of the research and the expected duration of participation and the

procedure to be fallowed.

24
Throughout the research effort, the researcher considered ethical considerations and maintained

the respondent's openness, privacy, and confidentiality. To ensure that the respondent's ethical

issues data is exclusively used for academic purposes. This study was conducted in a completely

ethical manner, with all copyright protected and permission to replicate items requested when

necessary. Because of the study's confidentiality, privacy, and informed permission, it may be an

ethical issue to avoid making respondents feel uncomfortable or damaging them, the research

findings were held under strict confidentiality.

25
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 Appendix A

QUESTIONNAIRE

THE IMPACT OF IMPLANTATION E-ACCOUNTING SYSTEM ON PERFORMANCE SMES

Dear respondents,

Dear Respondent We are Mohamed Omar Abuhadi and Ramla Abdikadir Ibrahim and Ikran

Abdiwahid Hussein, students at SIMAD University. We are currently undertaking a research

study on “The Impact of Implantation E-Accounting System on Performance SMEs” We are

therefore requesting you to share any relevant information that will help us to complete the

aforementioned study. Kindly note that any information you will share will be used academic

purpose and will be treated with utmost confidentiality.

Section A: Demographic Profile

The following questions refer to the demographic profile of the respondents. Please provide

the appropriate information by placing (✔) in the bracket provided to represent your answer.

Gender of the respondents:

( ) Male, ( ) Female and divorce ( )

Age of the respondents:

( ) less than 20 years ( ) between 21 – 30 years and ( ) above 30

Marital Status of the respondents:

( ) Single, ( ) Married, and ( ) Divorced

Educational Level of the respondents:

29
 ( ) Secondary Level, ( ) Diploma Level

( ) Bachelor Degree, ( ) Master Degree, and ( ) PhD

Occupation of the respondents:

( ) Management, and ( ) Employees

COMPUTERIZED ACCOUNTING (IV)

Please (✔) one cell according to the following 5-point Linker scale, with 1-Strongly Disagree

and 5- Strongly Agree that best describe your level of argument with the following statements.

SD= Strongly Disagree D= Disagree N= Neutral A=Agree SA= Strongly Agree

SECTION B: ONLINE ACCOUNTING SYTEM

NO Statement SD D N A SA Source

1 OAS Provides accurate, reliable and up-to-date financial (Sandra,

information Zanga

2 Records invoice for orders using standard billing and contract Rumbidzai

terms 2019)

3 SYSTEMS MANAGEMENT Provides unlimited, free support

on the use the application

4 Improves time planning, and procedural skills

5 Administers knowledge of the profitability of the business

30
 SECTION C: INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)
SN Statement SD D N A S Source

1 Knowledge and application of ICT has aided the accounting system in Our (Stephen
Ogunleye,
organization. Olusogo
2017 )
2 With the knowledge of the use of Microsoft tools, the preparation of
financial statements in Our organization is timely.
.
4 Are accounting packages used in the preparation of accounts in our

organization.

5 With the use of accounting packages (QuickBooks online, Xero, Odoo) is

the quality of information produced more reliable

SECTION D: INFORMATION TECHNOLOGY COST

SN Statement SD D N A SA Source

1 AISs are expensive (Sandra, Zanga

2 Complexity of Accounting information System Rumbidzai 2017 )

3 Cost benefit analysis

4 Ignorance about Accounting information system

31