INFORMATION TECHNOLOGY AND FINANCIAL REPORTING PRACTICES IN SMES IN CALIFORNIA, USA
Abstract
Purpose of the study: IT encompasses a wide range of activities and applications, including hardware and software development, data management, networking, and cybersecurity. IT has transformed the way businesses, organizations, and individuals operate and communicate. Hence, the study examined the impact of information technology on financial reporting practices in SMES in California, USA.
Research Methodology: The study utilized the descriptive research design. The target population was 195 SMES in California. The research did sampling of 160 participants that were chosen from the target population of 195 SMES in California. Questionnaires were utilized to gather the data.
Findings: The impact of information technology on accounting and financial reporting practices in SMEs has indeed been significant. The use of IT has transformed traditional accounting practices and has allowed businesses to streamline their financial operations. With the help of IT tools such as accounting software, SMEs can now store and manage financial data more efficiently. This has not only made the process of recording and processing financial transactions faster but also more accurate. SMEs can access financial reports in real-time from anywhere, making it easier for them to stay on top of their finances. Moreover, it has also made it easier for SMEs to comply with regulatory requirements by providing accurate financial data to auditors and tax authorities.
Recommendations: SMEs should also be cautious and take measures to protect their financial data from potential threats. The study recommended that SMEs should choose an accounting software that suits their needs and budget. The software should provide necessary features such as automated bookkeeping, invoicing, financial statement preparation, and real-time financial data access. SMEs should provide adequate training to their employees to effectively use the accounting software and other IT tools. SMEs should consult with IT experts and accounting professionals to determine the best IT infrastructure and accounting software suitable for their business needs.
Keywords: Information Technology, Financial Reporting, SMES, USA
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