ADELEKE, Adebowale Babawale
Department Of Accounting and Finance, Faculty of Management Sciences, Ajayi Crowther
University P.M.B 1066, Oyo, Oyo State
E Mail: Ab.Adeleke@Acu.Edu.Ng
Phone Number: 08030779390
ABSTRACT
The study examined the effect of outsourcing accounting functions and performance of small
businesses in Oyo State. Purposive and simple random sampling techniques were used to select a
sample of 241 owners/managers of table water processors in sixteen divisions of table water
producers in Oyo State. Data on the accounting activities and business characteristics of respondents
were collected from primary source through questionnaire. Regression analysis was employed to
model the effect of outsourcing accounting functions on small businesses’ performance and influence
of small businesses’ characteristics on their adoption of outsourcing accounting functions. Correlation
analysis was adopted to analyze the relationship between outsourcing accounting functions and small
businesses’ performance. Findings showed that 95.8% of small businesses’ performance was
attributed to observance of outsourcing accounting functions, the observed effect was statistically
significant. There was significant relationship between outsourcing accounting functions and small
businesses’ performance It was revealed that transaction identification, book-keeping and generation
of financial statement were significantly correlated to small businesses’ performance. Findings also
showed that small businesses’ characteristics had significant influence on their adoption of accounting
procedures which was significant, indicating that small businesses’ characteristics significantly
influenced ability of small businesses to adopt outsourcing of accounting functions. The study
concluded that outsourcing accounting functions caused small businesses’ performance. Small
businesses’ characteristics had constituted hindrances to their compliance with accounting procedures.
Small businesses should embrace accounting procedures in preparation of accounts to aid sound
economic decision making and better performance.
Keywords; Outsourcing, Accounting Function, Performance, Accounting Activities, Small
Business Characteristics