The Effect of Implementation of Accounting Information System on Efficiency, Profitability and Productivity of SMEs in Iran

Abstract

Purpose  Organizations are competing in the Information Age where knowledge and information are key resources.<br><br>Management information systems (MIS) provide information that organizations need to manage themselves efficiently<br><br>and effectively. The accounting information system (AIS) plays a crucial role in MIS. AIS is a system of collection,<br><br>storage, and processing of financial and accounting data to be used by decision makers. These systems must correspond<br><br>to the needs and structure of the organization.<br><br>Design/methodology/approach  In this research, the authors examined the information requirements (the ideal condition)<br><br>of SMEs listed on Tehran Stock Exchange (TSE) and compared it to the information processing (IP) capacity of<br><br>the existing systems (the current condition) using 19 standard IP indicators. Then, sample SMEs were divided into<br><br>good and poor AIS performance groups based on their scores, and the effect of implementation of AIS on efficiency,<br><br>profitability, and productivity of these firms was examined using P/E ratio and Tobin’s Q.<br><br>Findings  The results indicated that AIS implementation is positively associated with Tobin’s Q of TSE-listed firms.<br><br>However, no significant relationship was observed between AIS implementation and P/E ratio in the poor AIS performance<br><br>group.<br><br>Originality/value  So far, such a study did not conduct about the subject of the study in Iran, so it may lead strength<br><br>on decision making as well policy making on the SMEs in Iran.