CHAPTER ONE
INTRODUCTION.
1.0. BACKGROUND OF THE STUDY.
Accounting is and information system that identifies records, communicates the economic events of an organization to interested users. The success, growth and survival of any business depend on great extent on the quality of decision made by management. This decision depends on the quality and timeliness of the information provide by good accounting information. Information from a good source is competitively necessary for every business requiring a successful ending. This becomes imperative for every SME to manage a good information which entails the installation of a sound accounting information to guide and support the decision making process.It has been recognized that appropriate accounting information is essential for a successful management of any business entity, whether large or small (European Commission 2008). As defined by the Central Bank of Nigeria CBN, SMEs is classified according to asset base and the number of employees. The criteria of an asset base is between N5 million and N500 million, and staff strength between 10 to 100 employees.
European define small and medium Enterprise as the categories of micro, small and medium–sized enterprise which made up of enterprises which have an annual turnover not exceeding 50 million euro and/or an annual balance sheet (statement of financial position) total not exceeding 43 million euro.However SMEs have been very important to the growth and development of any country, because of role it play. This research will assess the level of usefulness of accounting information toward evaluating the performance of SME in Akwa Ibom State. Primarily, the role of accounting is to collect and communicate data that can be used for analysis and decision making, (Ethredge, Shane, and Smith, 1995)From the International Accounting Standard Committee (IASC), frame work which identify the principles, and qualities of accounting information to include understandability, relevance, reliability and comparability. Federation of Accounting Standard Board (FASB), frame-work also provides the same characteristic.It is noted the, most SME does acknowledge the importance of proper record keeping in their operation.