ABSTRACT

The study examined the impact of accounting system on financial reporting of selected small scale industries. To ascertain the unreserched influence of Accounting System on financial reporting of Small Scale Industries and also determine the effect of good Accounting system on the reliability of financial reporting in Small Scale Industries, 32 Sample respondents. drawn from 50 number of Small Scale industries in Abia State were used in the study. Responses to the main study questions were obtained from 32 respondents out of 50 structured questionnaires. The study data were analyzed using simple descriptive statistics including simple percentages and tables. The main study hypothesis which was to test the level of significance influence of Accounting system on financial reporting of Small Scale Industries and which was to ascertain the opinion of respondents on the effect of good accounting system on the reliability of financial reports in small sQale industries; were tested using chi-square statistical tools. From the study, it was found that, accounting system influenced the financial reporting of Small Scale Industries significantly. It was also •found that there is no significant difference in the effect of good accounting system on the reliability of financial reports in small scale industries. That is, good accounting system leads to greater reliability for financial reporting. The study concludes and recommends that given that the impact of good accounting system and financial reporting is significant and proper system of accounting is generally considered important in reporting on the activities of Small Scale Industries, Small scale industries should adopt accounting system that complies• with the Generally Accepted Accounting Principles (GAAP) for effective financial reporting and also small scale industries should ensure that they prepare reliable financial reports that would guide the investors in their investment decision making.