Title: Strategic Management Accounting (SMA) and Financial Performance of Small And Medium Sized Nigerian Enterprises And Oroma King Wofuru-Nyenke
Authors: Magdalene Enruchi Williams (Ph.D.) and Oroma King Wofuru-nyenke
Volume: 8
Issue: 8
Pages: 34-47
Publication Date: 2024/08/28
Abstract:
This study investigated the relationship between strategic management accounting (SMA) and financial performance of small and medium sized enterprises (SMEs) in Nigeria. Activity based costing (ABC) and target costing (TC) were used to measure strategic management accounting as independent variables while return on assets (ROA) and return on investment (ROI) were used to measure financial performance as dependent variables in this study. The study adopted survey research design and relied on primary data sourced through a well-designed questionnaire. Pearson's Product Moment Correlation (PPMC) techniques was used to analyze the sourced data. The findings suggest that there is a positive and significant relationship between ABC and ROI in Nigerian SMEs. Also, the findings of this study revealed a positive and significant relationship between TC and ROI. Positive relationships were also found between ABC, TC and ROA but at an insignificant level in Nigerian SMEs. The study therefore recommends that Nigerian SMEs should enhance data collection for robust analysis, fostering adoption of ABC and target costing practices to potentially improve ROI and asset management. Furthermore, that government agencies should support research initiatives to aid in increasing awareness on strategic management accounting practices' impact on SMEs' financial performance.