ACCOUNTING PRACTICES AND FINANCIAL PERFORMANCE OF NEPALESE SMALL AND MEDIUM-SIZED MANUFACTURING ENTERPRISES
Date
2024
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Publisher
Shanker Dev Campus
Abstract
Management-oriented accounting defines accounting practices in relation to management functions. Rapid changes in the corporate environment have significantly altered organizational accounting processes, shifting from administrative to strategic levels. Accounting's main goal has always been to improve a company's performance by providing valuable information for strategic planning, operational management, and decision-making. The researchers selected participants for the study based on their judgment, including 20 small to medium-sized businesses in Nepal's financial sector. The study examined cost accounting, financial accounting, and management accounting techniques, along with the main challenges of applying management accounting tools in SMEs within Nepal's financial sector. It also investigated various accounting methods and the impact of the accounting system on the overall performance of the sample firms. Descriptive statistics were used to analyze primary data collected through structured questionnaires, along with basic percentage calculations, correlations, and t-tests. The findings revealed that annual budgeting and forecasting were the most commonly used methods among small and medium-sized financial businesses in Nepal. The study concluded that accounting systems significantly influence a business's success. It noted that traditional accounting techniques persist due to a lack of practice, coordination issues between employees and departments, the nature and size of the business, and corporate governance policies. The study suggested that businesses establish separate accounting departments to implement the beneficial accounting tools and methods identified. It also recommended that academics with a deep understanding of accounting practices develop and promote environmentally friendly tools and techniques.