Financial Reporting Practices and Business Performance of Small and Medium-Sized Enterprises in Sekondi Takoradi Metropolis: The Moderating Effect of Accountants’ Characteristics

Abstract

Effective financial reporting practices play an effective role in the survival of small and medium-sized enterprises, but poor reporting practices is a contributing factor for small and medium-sized enterprises’ failures. The current study investigates the effect of financial reporting practices on the performance in the Sekondi-Takoradi Metropolis while considering the moderating effect of accountants’ characteristics. Also, the challenges relating to financial reporting practices were additionally examined. The explanatory research design was utilised to execute the objectives of the study. Through the simple random sampling technique, the study responses were obtained with a structured questionnaire. Estimations of the study were performed with the Partial Least Square Structural Equation Modelling. The study found a significant positive effect of accounting records keeping and financial disclosure on business performance. On the other hand, comprehensive financial statement contributed less to business performance. Moreover, characteristics of accountants could not moderate the relationship between financial reporting practices and business performance. Also, challenges on the financial reporting practices were found. It is recommended that small and medium-sized enterprises should enhance competencies of accountants on financial reporting practices in order that it can contribute to performance.