Abstract:
The study set out to determine the impact of financial accounting in the decision making and competitiveness of SMEs in Masvingo and establish the level of uptake of the accounting standards by these small firms. For the purpose of this study descriptive survey design was adopted. Questionnaires and semi-structured interviews were used as research instruments. Questionnaires were distributed to a sample of 30 SMEs and interviews were conducted from 12 selected SMEs from the sample. The research findings indicated that challenges which small business were facing in the process of adoption of financial accounting (standards) for SMEs were little awareness of the standards, lack of necessary skills and expertise to adopt and implement the standards.
The research also found out that the level of uptake for the IFRSs and standard was very low. The researcher recommended that the government should put in place regulations which controls and ensure that SMEs are preparing proper financial records so that the implementation and adoption process would be easier. In addition, Small and Medium Enterprise Development Corporation in conjunction with professional bodies such as Institute of Chartered Accountants in Zimbabwe should frequently conduct educational workshops to raise the awareness of IFRSs for SMEs across the country and to educate the entrepreneurs of the benefits that accrue if IFRSs are adopted. The study also recommended SMEs to gradually adopted the standard as they have long-term benefits like such as being able to access funding and improve in the quality of their decisions there by gaining market shares. The work conducted was important as few researches of this nature have been conducted across Zimbabwe.
