Accounting Information Systems - A Value-Adding Phenomenon or a Mere Trend? The Situation in Small and Medium Financial Service Organizations in the Cape Metropolis

Small Medium and Micro Enterprises (SMMEs) are of grave importance to the South African economy as they are legally obliged to support in the alleviation of poverty, the diminution of unemployment and the equal dissemination of wealth throughout the country. Despite the importance of these entities, prior research suggests that these entities are not mainly sustainable as between 70% and 80% of South African SMMEs fail after being in operation for five years. More often than not the latter dispensation is believed to stem from the realization of risks which, in turn, is cultivated by the ineffective management of economic factors. Among the economic factors which have a direct influence on the existence of South African SMMEs is the effectiveness of accounting information system(s). Here it is argued that a small organization is more likely to attain sustainability if its accounting information system(s) provide relevant, reliable and recent information, to management, for better business-related decision making. From a SMME dispensation, prior research justifies that accounting information systems can be regarded as critical 'decision-making-tools'. In fundamental nature, this research study was conducted to determine the actual value which utilized accounting information systems add to South African SMMEs. This research study was descriptive in nature and fell within the positivistic research paradigm. Data were purposively collected from 32 SMME owners and/or managers, in the Cape Metropolis, who had to adhere to strict delineation criteria. It was found that although SMMEs have informally implemented accounting information systems, they add extreme value to SMME leaders when having to make sound business decisions.