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. Management information systems (MIS) provide information that organizations need to manage themselves efficiently and effectively. The accounting information system (AIS) plays a crucial role in MIS. AIS is a system of collection, storage, and processing of financial and accounting data to be used by decision makers. These systems must correspond to the needs and structure of the organization. Design/methodology/approach In this research, the authors examined the information requirements (the ideal condition) of SMEs listed on Tehran Stock Exchange (TSE) and compared it to the information processing (IP) capacity of the existing systems (the current condition) using 19 standard IP indicators. Then, sample SMEs were divided into good and poor AIS performance groups based on their scores, and the effect of implementation of AIS on efficiency, profitability, and productivity of these firms was examined using P/E ratio and Tobin's Q. Findings The results indicated that AIS implementation is positively associated with Tobin's Q of TSE-listed firms. However, no significant relationship was observed between AIS implementation and P/E ratio in the poor AIS performance group. Originality/value So far, such a study did not conduct about the subject of the study in Iran, so it may lead strength on decision making as well policy making on the SMEs in Iran. © Mehdi Salehi, Mahmoud Lari Dashtbayaz, Mostafa Bahrami, Ebadollah Teymoori, 2015.