Oops! It appears that you have disabled your Javascript. In order for you to see this page as it is meant to appear, we ask that you please re-enable your Javascript!



Project Topic: Poor Accounting Practices: Bane of Small and Medium Scale Enterprises in Nigeria


Small and medium scale enterprises (SMEs) constitute a pivot of the economic growth and stability of any economy (even developed economies). In recent decades, a lot of attention and efforts were deployed into this sector by both governments and individuals to appropriate the huge proceeds offered by it. Multinational concerns waded into several partnership/counterpart agreements with SMEs in a bid to read and capture a significant part of the market for their products/services. The SMEs are needed both in the productive, distributive and service industries. Their presence has not only expanded but strengthened these industries as well. The success stories of “Asia Tigers” such as Malaysia, Indonesia, Taiwan, Japan, Indian Korea and Israel, to mention a few, could be traded to the investment of enormous resources by the governments of the aforementioned countries to the development of the SMEs. Nigeria after its civil war took place from or borrowed the economic blue print of the aforementioned countries. Thus, for the most part of the last three decades, she had intensified its campaigns and programmes in this sector. Institutes, agencies, parastatals and extra-ministerial departments have been created by government to facilitate the growth of the SMEs. In the present Obasanjo Administration, the small and medium Enterprises Development Agency of Nigeria (SMEDAN) was set up to provide micro-credits and technical assistance to prospective small business owners especially school leavers. This agency has lived up to its billing since its formation. Inspite of all the concerted and well meaning efforts by government and international organizations such as the IMF, World Bank etc. to foster the growth of the SMEs Sector of Nigeria’s Economy, a suitable factor. “Poor Accounting Practices” has been discovered to be a potential threat to the speedy growth of the SMEs. Inadequate and improper record keeping could be attributed to the poor appreciation of accounting roles/functions by owners/operators of SMEs who are mostly illiterates or inexperienced in managerial issues. This study x-rayed the reasons for asserting that poor accounting practices form a bane of SMEs in Nigeria and highlighted positive steps that could be taken (including) suggested books of accounts which can be maintained by any SME (especially a small poultry farm) to curtail the prolific failure of SMEs in Nigeria as a result of poor accounting/record keeping.




It is pertinent to note that small and medium scale enterprises (SMEs) constitute an integral foundation of a nation’s economy. That the economic progress Nigeria recorded in the last two decades could be attributed to the speedy growth of small and medium scale enterprises is not an over statement.

This is a fact attested to by a good number of speakers during an economic conference held in Lagos in 1989 at the instance of the Nigerian Institute of Social and Economic Research (NISER) and the National Association of Small-Scale Industries (NASSI).

The environment in which the SMEs operate in Nigeria is very challenging and rewarding as well the risks associated with investment, management and competition with well-established businesses underscore the underlying threat to the development of the small and medium scale enterprises in Nigeria. The small size of capital required to run these enterprises and the ease with which they are operated make this form of enterprise very viable and rewarding.

There has been increasing attention of government at various levels in Nigeria to the growth of SMEs. Incentives and enlightenment workshops and programmes have been implemented on a large scale by the present Obasanjo-led administration to boost and strengthen this unit of the economy. The Nigeria government has realized that small and medium scale enterprises do not only foster industrial development but promote rural development and generate employment. Malaysia, India, China, Japan and South Korea are noble examples of countries whose successes in the development of small and medium scale industries have placed them as economic giants in the global market.

In Nigeria, focus on the development of small and medium scale enterprises dates back to the second National Development Plan (1970-1975) during which the small scale industries (SSI) audit scheme was initiated. This was a result of the immense government support for the sector interms of funding.

There is no gainsaying the fact that, multinationals and big industries we know today started as small and medium scale enterprises.

Investment profile has greatly heightened in Nigeria as more and more Nigerians invest expansively in the small and medium scale enterprises. Most Nigerians prefer establishing businesses of their own to being employees. This has gone a long way to making Onitsha in Anambra State a place having the largest market in West Africa. Inspite of the geometric growth of small and medium scale enterprises in Nigeria, it is evident that business failure has occurred in greater proportion in the SME sector of the economy than in their sectors.

It is advisable that SMEs should endeavour to keep relevant accounting records to enhance their survivals and stability.

Accounting records are required in any form of business organization for reasons such as:

  1. The need to provide evidence of the nature, volume, time and policies with regard to transaction/activities carried on by an enterprise. They also contain decisions reached by management, action(s) taken in the course of business and the result of these actions. Business and other records can be tendered as exhibit(s) in legal suits and to regulatory authorities such as the Tax Board to show that tax laws are strictly adhered to.
  2. Assessing stewardship of managers: Records help entrepreneurs to assess the stewardship of managers as it relates to the property or business entrusted to them.
  3. Provision of adequate information for decision making and control of operations: Records provide information useful for the day-to-day, running of a business. Without regular and complete information of an accounting form, the cost of management will be very high and inefficiency coupled with low capacity utilization cannot be entirely avoided.


Verifiable records have shown that the performance of small and medium scale enterprises in Nigeria can be reited as unimpressive because of poor accounting practices such as improper and incomplete book-keeping.

A major cause of business failure in the SMEs sector is poor accounting practices. Improper and insufficient record-keeping has become a regular feature of most SMEs in Nigeria.

Although there are other factors that hinder the growth of SMEs in Nigeria such as managerial incompetence, inadequate finance/capital, state of economy, employee’s experience etc, non-observation of accounting principles and system constitutes a bane of SMEs in Nigeria.


The following objectives are made as regards this research/study:

  • To independently examine the accounting practices and systems of small and medium scale enterprises (for those that keep/observe such practices) in Nigeria.
  • To identify the problems associated with keeping accounting records in SMEs.
  • To assess, specifically, the regularity and efficiency of keeping such books of account and records as cash book, cash receipt, cash payment voucher, sale, purchases and returns, journals, payroll records, assets record, petty cash book, final accounts etc. In small poultry farms in Enugu State, Nigeria.
  • To determine whether the accounting systems/records kept in SMEs are satisfactory or adequate for them.
  • To put forward valid reasons why SMEs should keep proper accounting records
  • To show/present simple but effective accounting systems/records for SMEs for SMEs in Nigeria.
  • To make relevant recommendations based on the results obtained from the study regarding books of account to be kept by SMEs.


Ho:   Failure of small and medium scale enterprises is directly related to improper and inadequate accounting/record-keeping.

Hi:    Success in SMEs despite improper and inadequate accounting/record-keeping.


This study will assist business entrepreneurs and manager of SMEs (especially small poultry farms in Enugu town) by equipping them with skills on how to keep good accounting records.

Prospective operators of small and medium scale enterprises will be enabled by this study to know the difficulties they will encounter for failing to keep proper and sufficient books of account and guard against them.

It will also provide ample information for students of Business Administration especially the financial/accounting aspects of small and medium entrepreneurship in developing economies like Nigeria.

Finally, it will be an invaluable aid- as a well researched study, to planning authorities especially as it pertains to policy formulation.


This study “poor accounting practices; Bane of small and medium scale enterprises in Nigeria” could have been extended to cover other aspects such as the managerial and legal bottlenecks inherent in SMEs such as Small Poultry Farms, Bakeries, Publishing outlets, food processing factories etc. Limited time and finance compelled the project writer to limit the scope of this study to only the accounting problems of SMEs (and specifically small poultry farms).

—This article is incomplete———–This article is incomplete———— It was extracted from a well articulated quality Project, Research Work/Material

Project Topic: Poor Accounting Practices: Bane of Small and Medium Scale Enterprises in Nigeria

To get the full report pay a token of 3,000 naira to the following account



ACCOUNT NUMBER: 4831029253

Immediately after the payment send your name, topic of interest, e-mail address, teller number and location to the following phone number: 07035282233 or email: ralphemeka@gmail.com

The full report will immediately be forwarded to you.


Related project topics and materials

Accounting Project Topics and Materials

The Impact of Money Supply on Inflation in Nigeria (1990 – 2007)

A Critical Analysis of the Relevance of Forensic Accounting in the Face of Increasing Fraudulent Practices in Nigeria

Pension Scheme Management in the Nigerian Public Sector

The Relationship between Public Capital Expenditure and Gross Domestic Product (GDP) of Nigeria

Harnessing Local Government Internally Generated Revenue (IGR) in Nigeria


To purchase complete Project Material, Pay a token of N3, 000 to our bank accounts below:



ACCOUNT NUMBER: 4831029253




ACCOUNT NUMBER: 3092548117

After paying the sum of N3, 000 into any of our bank accounts, send the below details to our Phone: 07035282233

  1. Your Depositors Name
  2. Teller Number
  3. Amount Paid
  4. Project Topic
  5. Your Email Address

Send the above details to: 07035282233 AFTER payment. We will send your complete project materials to your email 30 Mins after payment.

uniprojectsearch.com will only provide papers as a reference for your research. The papers ordered and produced should be used as a guide or framework for your own paper. It is the aim of uniprojectsearch.com to only provide guidance by which the paper should be pursued. We are neither encouraging any form of plagiarism nor are we advocating the use of the papers produced herein for cheating.

This entry was posted in Department of Accounting / Accountancy, Department of Business Administration, Management Sciences and tagged , , . Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>