Theses and dissertations (Accounting and Informatics)
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Item The role of financial awareness for viable and sustainable small-medium enterprises in Kwa-Zulu Natal, Durban(2021-01) Msomi, Thabiso Sthembiso; Olarewaju, Odunayo Magret; Olarewaju, OdunayoThe objective of this study is to examine financial awareness for viable and sustainable smallmedium-enterprises in Kwa-Zulu Natal, Durban. In this study, the researcher examined factors for SME sustainability and viability as they influence organisational survival. The specific objectives are outlined as follows: to examine the influence of financial awareness on SME viability and sustainability; to establish the relationship between financial accounting skills and sustainable SMEs; to establish the relationship between financial awareness and financial accounting skills; and to determine the Influences of budgeting and financial awareness on SME sustainability. The quantitative research method was adopted for this study and the purposive sampling technique was chosen to select the participants for this study. The study collected primary data from respondents who are owners of SMEs in the retail, construction, manufacturing sectors, etc. Data was analysed using SPSS. A total of 310 research questionnaires was administered and 304 research questionnaires were returned for analysis (giving a 98% response rate). A regression analysis and Pearson’s correlation analysis were conducted to address the specific objectives of the study. The study identified access to market, access to finance and financial accounting skills as the independent variables, while SME sustainability was the dependent variable of the regression model. The findings suggest that access to finance has the largest absolute value (0.425), which indicates that access to finance uniquely accounts for the larger proportion of the variance in the regression model. The outcome of Pearson’s correlation shows moderate correlation (r value is 0.531) between financial accounting skills and sustainable SMEs. Moreover, there was a weak correlation (r value is 0.457) between financial awareness and financial accounting skills. The outcome of the regression analysis suggests that budgeting has the largest absolute value (0.372), which indicates that budgeting uniquely accounts for the largest proportion of the variance in the regression analysis. The Exploratory Factor Analysis revealed nine factors that are significant to ensure sustainability and viability. The implication of the outcome is that access to finance and budgeting accounts for SME sustainability. Based on the findings from this research, it is recommended that SMEs owners should pay much attention to access to finance and budgeting in running their businesses. Again, employee performance reviews contribute to enhancing the financial accounting skills and knowledge of staff of SMEs as well. They should seek expert or professional advice before taking a loan and they should avoid loan sharks as the interest charged by loan sharks are very high which may lead to potential debt trap. It is suggested that Government agencies should help SMEs to market their products and keep their businesses viable.Item Factors influencing the adoption of management accounting practices (MAPs) by small and medium enterprises (SMEs) in the manufacturing sector in Durban(2020-10) Msomi, Mbali Portia; Nyide, Celani John; Ngibe, MusawenkosiMost countries recognise small and medium enterprises (SMEs) as a key element in strengthening the economy and in reducing the high unemployment rate that is currently prevailing globally and especially in South Africa. Although these enterprises contribute significantly towards the economy, they often fail to survive beyond their start-up phase due to a number of challenges affecting their business life-cycle. These challenges stem from both internal and external factors and, if not curbed during the initial phase of the enterprise, they may cause the business to fail prematurely. Common causes of failure include, but are not limited to, difficulties encountered in gaining access to start-up capital; a lack of entrepreneurship or business management skills; a lack of appropriate business education along with a lack of any culture of innovation or of networking skills amongst their owner/managers. Finally, there is frequently a failure to adopt management accounting practices (MAPs). It is with this last issue that this research is concerned. MAPs are techniques used to provide management with financial and non-financial information to facilitate the planning, controlling and decision making process of an organisation. These techniques are recognised to improve business performance and sustainability substantially, and the application of these techniques is often seen as determining the success or failure of an enterprise. However, there has been some concern around the adoption of MAPs amongst manufacturing SMEs, especially in the South African context. Hence, the aim of this study was to explore the critical factors influencing the adoption of MAPs by SMEs in the manufacturing sector in South Africa using a case study of businesses located in and around Durban. The aim was also to provide informative guidelines to promote the facilitation of MAP practices. A quantitative research approach was adopted involving non-probability, purposive sampling to ensure that the relevant participants were chosen. A sample consisting of 202 participants was considered appropriate for a population with over 1050 manufacturing SMEs registered in Durban (Department of Trade and Industry report 2016/17). A questionnaire was used to collect data from the participants in the study. A pilot test was conducted to ensure that the research instrument was adequately prepared. The data collected were analysed using the Statistical Package for the Social Sciences (SPSS) version 26.0, and the results were presented using graphs, tables and charts. The results of the study showed that both traditional and contemporary MAPs are regarded as relevant in this changing business environment. Manufacturing SMEs still see the significance of using traditional MAPs, although with the new industrial revolution taking over globally, more sophisticated new MAPs have been implemented by several manufacturing SMEs, and this has proved more effective in their gaining a competitive edge and demonstrating innovation and thus in achieving market success. The findings of this study are therefore in a position to contribute towards promoting the adoption of appropriate up-to-date MAPs that are more technically advanced to meet current management needs. The findings also revealed that the key internal factors identified by the respondents in this adoption process were: the owner’s business experience and skills, the firm’s structure, its size, and changes in the firm’s size. Amongst the external factors, the results of the study showed that competition, technology, market innovation, market success, and networking with other businesses, were regarded as the predominant factors influencing the adoption of MAPs by manufacturing SMEs in the Durban area. Although the study was able to identify these critical factors influencing the adoption of MAPs, the results were limited to those views expressed by the responding stakeholders from manufacturing SMEs located in the Durban area, and therefore can only be generalised with caution. The study recommends that both traditional and contemporary MAPs should be adopted upon the inception of a business, and that the relevant stakeholders should invest in educating themselves so that they can have a better understanding of the available MAPs, and their adoption and implementation within their business processes. The study further recommends that manufacturing SMEs identify and adopt the most appropriate MAPs to promote cost effective measures, optimise business performance and ensure sustainable growth. The effective adoption of MAPs would also be aided if stakeholders were to make more use of government supporting agencies allowing them to benefit from further financial assistance, mentorship and training of staff.Item The role of management accounting practices in the success of small and medium-sized enterprises in Durban(2020-10) Cele, Sicelo; Stainbank, Lesley June; Nyide, Celani JohnThe sustainability of small and medium-sized enterprises (SMEs) in South Africa is important, mainly because of their contribution to the Gross Domestic Product (GDP) of the country as a whole. Nonetheless, the high rate of SME failure in South Africa is largely attributable to lack of management skills by owners and managers of these SMEs. This study investigated the role of management accounting practices in the success of SMEs in Durban. The objectives were to identify the types of management accounting practices used in SMEs, to examine factors that affect the use of management accounting practices by SMEs, to examine the extent to which management accounting practices are used by SMEs and to examine the impact of management accounting practices in SMEs’ success. A quantitative approach was adopted in a form of self-administered questionnaires which were mailed to respondents. Data were analyzed using descriptive statistics to summarise the opinions of the respondents from the data collected. The findings were analysed using the Statistical Package for Social Sciences (SPSS) version 25. The findings of the study indicate that although the management accounting practices were not often used, the most used costing system was traditional costing as well as process costing. In terms of the decision support and investment appraisal tools, the most used tool was the accounting rate of return followed by the payback method and relevant cost and revenues. Planning and control techniques such as the sales budget and production costing were also used by SMEs in Durban. Factors that affect the use of management accounting practices are the lack of management accounting knowledge, lack of education and skills and the cost to employ management accountants. Management accounting practices were found to have a positive relationship with planning and performance. Challenges faced by SMEs are financial challenges, human resource challenges as well as technological challenges. The study recommended that SMEs’ owners and managers should attend management accounting training, employ management accountants or outsource the management accounting function. Implementing management accounting practices by SMEs may improve their business management in terms of cost controls and decision-making