The Alignment of Accounting and Information Systems in SMEs in Malaysia

The concept of fit or alignment between information systems processing capacity and information requirements has been discussed for many years, but this study seeks to explore some unresolved issues in the context of accounting information in small and medium sized manufacturing firms. In particular, the study seeks to identify different levels of alignment using a matching approach, and then investigate the link with firm performance. Nineteen characteristics of accounting information were identified so that accounting information requirements and information systems processing capacity could be compared. Data from 310 firms in Malaysia was collected using a mail questionnaire and fit was calculated using the matching approach to measure alignment. Cluster analysis was then used to group SMEs with similar levels of alignment. Three groups emerged which could be readily identified as Aligned, Moderate and Not aligned. Statistical tests confirmed that the group of SMEs with the highest level of alignment had achieved significantly better performance than the other two groups. This suggests that aligning information processing capacity with perceived information requirements does contribute to improved firm performance of SMEs in developing economies.