The small and medium scale industry has experience significance changes in terms of growth and survival in recent times as new business ideas and good accounting records are introduced into the sector although most of the small scale business (SSBs) are not registered as corporate bodies rather as a sole proprietorship, this made it easy for such business to get registered with stress than other form of business registration. It is evident that SMEs has grown in number more than other forms of business and could be found anywhere in Nigeria.
According to Boachie-Mensah and Marfo-Yiadom 2005) stated that in spite of their numbers, about 60% of the SSBs fail within the first five years of operation. Most SMEs fail because of their inability access finance from most of the financial institutions since they lack proper financial records as requirement according to (William, 2008).
It has been attributed that the inability of most small scale business to survive beyond the first few month of establishment and operation was due to lack adequate financing.
According to (Amoako, 2013) stated that to become successful and be able to contribute meaningfully to the economy of Nigeria, SMEs must be able to attract and secure finance by themselves.
Recent studies shows that larger firms will be able bring to themselves economic and certain sophisticated quantitative management techniques that may not practicable for small and medium scale enterprises. Small scale business may be able to maintain closer client relation and better customer relation than the bigger companies.
According to (Abdulrasheed, Khadijat and Oyebola, 2012) stated that the differences in operation techniques may influence the deficit in accounting method employed in generating financial information. Most firms can employ different principles such as different inventory techniques, depreciation method, method of accounting for income taxes and revenue recognition procedures etc.
In recent times most business unit become complex and broader on scope, accounting evolved in response to the increased planning and control responsibilities of management.
According to (Abdulrasheed, Khadijat and Oyebola, 2012) stated that as government grows in size and become more centralized in nature, accounting was developed to meet the increased accountability; business decision need to be supported by good and quality financial information which need to be relevant, user friendly and available in timely manner.
1.2 STATEMENT OF PROBLEM
The study came about due to the poor accounting method among the small scale business; poor accounting practice has limited the performance of SSBs in recent times, some the major problem faced by small business due to poor accounting or irrelevant accounting method includes their inability to access fund and other financial benefits such as loans from most of the financial institutions due to poor account records. The pivot behind the survival of small business (SSBs) is availability of capital, when most of the small business can no longer access finance then their operation becomes ineffective.
1.3 AIM AND OBJECTIVE OF STUDY
The main of the study is to examine the relevance of account in the growth and survival of SMEs in Nigeria. Other specific objectives of the study are stated below as follows:
- To examine the relationship between accounting records and the survival of SMEs in Nigeria
- To examine the effect of relevance of account on the performance of SMEs in Nigeria
- To investigate on other factors affecting the growth of SMEs in Nigeria
- To examine the role of accounting in the growth and survival of small scale business
- To proffer solution to the above stated problems
1.4 RESEARCH QUESTIONS
The study came up with the following research questions in order to ascertain the aim and objectives of the study. The research questions are:
- Is there any relationship between accounting records and the survival of SMEs in Nigeria?
- What is the effect of relevance of account on the performance of SMEs in Nigeria?
- What are the factors affecting the growth of SMEs in Nigeria?
- What are the roles of accounting in the growth and survival of small scale business?