SMALL MEDIUM

This study examined the Effect of Accounting Practices on the Financial Performance of Small and Medium Scale Enterprises (SMEs) in Nigeria. The research focused on how key accounting concepts – internal controls, financial reporting, budgeting practices, and role of support – influence the sustainability, profitability, and the overall performance of SMEs. A structured questionnaire was administered to SME owners and operators, across various sectors. Data collected was analyzed to determine the relationship between accounting practices and financial performance. The findings revealed that strong internal control systems significantly improve operational efficiency, reduce fraud, and also ensure compliance with financial procedures. Financial reporting, when timely and accurate, enhances transparency, helps in the process of decision making, and builds investor confidence in SMEs. Furthermore, Budgeting was found to play a vital role in planning, and evaluation of performance, aiding SMEs manage limited resources more effectively and efficiently. Additionally, the study highlighted the critical role of government support in shaping SME performance through tax incentives or holidays, access to credit, and mandatory adoption of basic financial reporting standards. It also concluded that SMEs with sound accounting practices are better positioned to achieve financial stability, attract invetors, and also contribute meaningfully to the country’s economic growth.