ADOPTION OF FINANCIAL ACCOUNTING PRACTICES BY MICRO AND SMALL SIZED ENTERPRISES (MSEs) IN SULTANATE 0F OMAN: CASE OF DHAKLIYA REGION
This paper presents the results of an exploratory study carried out to learn about the adoption of accounting practices by Micro and Small Enterprises (MSEs) in the Dhakliya Region of Sultanate of Oman. The study investigates use and application of accounting, maintenance of books of accounts, extent to which these entrepreneurs use accounting results for the management of their business and future policy making. The study provides an insight on the barriers for the adoption of accounting practices. Data on these aspects of accounting practices was collected from 50 MSEs through a survey instrument. The results of the study show that only a small number of SMEs in Dhakliya region are aware of the benefits of accounting in the business even though the ministry has taken many steps to aware its importance to small and micro entrepreneurs. The main driving forces of adoption of accounting practices are to ensure better business management and provide exact result of the business, current position of the business besides extrapolate future plan of action for the success of the business. All of the surveyed MSEs who have undertaken accounting practices regularly reported a positive performance and other benefits by the adoption of accounting practices in their businesses. Few MSEs outsource accounting activities. Lack of awareness, insufficient understanding of the importance of accounting in business, unnecessary botheration about the cost of implementation of accounting and lack of information about suitable accounting practices were some of the major barriers in adopting accounting practices. Results of the study recognize need for more training facilities in accounting for MSEs, measures to provide free accounting services by the ministry or availability of free professional advice and consulting to SMEs are need of the hour.