Detective Accounting Controls on Financial Performance of Selected Smes in Bujumbura, Burundi

Abstract

Background: Small and medium-sized businesses are a major part of the global economy and they have widely recognized impact to the Burundian economy and have a wide range of job opportunities at around 85% and created substantial social benefits for Burundi. Small businesses in Burundi are mainly family-owned and contribute to bad products that do not count for the market because the lack of creative nature and skills is more common in these businesses. However, there are poor financial accounting procedures for SMEs in Burundi, as well as separate responsibilities and trust in an exaggerated percentage of workers which means that the poor performance of these Burundian Small and Medium Enterprises is attributed to mismanagement. The aim of the report was to determine the influence of detective accounting controls on financial performance of selected SMEs in Bujumbura city, Burundi.
Materials & Methods: The research used survey design. It adopted descriptive and inferential statistics and was guided by Consistency Theory, Stewardship Theory and Agency Theory. The target population was 1463 workers from the 10 selected companies in Bujumbura City, Burundi who are beneficiaries of the investment code identified by API for getting real information. The researcher utilized a representative sample of 314 workers. To gather data both closed and open-ended questions were involved. The findings were presented using tables and graphs. Research instruments’ validity was ascertained through test re-test. Cronbach's alpha was utilized to test the internal coefficient of alpha exceeding 0.7 as accurate. Data has been analysed through inferential and descriptive statistics. For inferential statistics, Multiple regression as well as Pearson correlation were adopted
Results: The actual total ranking of Detective accounting controls in the selected SMEs in Bujumbura, Burundi had just been at 72.5% (mean=3.629, standard deviation=0.724) minor effect.
The standardized regression outcomes have been discovered most effective; = 0.568, t = 14.398, p=0.000 <0.05; Therefore, the findings showed that there was an overall favorable connection among both detective accounting controls and financial performance (r-square = 0.407 < 0.5, p = 0.000< 0.05).
Summary: The analysis found a significant connection in both detective accounting controls and the financial performance of the small and medium sized enterprises in Bujumbura City, Burundi.