The Role of Accounting Information Systems in Supporting Small and Medium-Sized Enterprises: An Applied Economic Study in Basra and the Gulf Countries

Abstract

Purpose: This study investigates the role of Accounting Information Systems (AIS) in enhancing the performance of small and medium-sized enterprises (SMEs). The research evaluates the influence of AIS on managerial decision-making, operational efficiency, financial control, and business performance within the organisational setting of Al-Naqsh Engineering Company in Basra, Iraq. Design/methodology/approach: A quantitative research approach was employed using a structured questionnaire administered to employees and managers of Al-Naqsh Engineering Company. Responses were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The analytical procedure included assessing the measurement model to confirm construct reliability and validity, followed by examining the structural model to test the proposed relationships among the study variables. Findings: The results indicate that Accounting Information Systems have a positive and statistically significant effect on managerial decision-making, operational efficiency, financial control, and business performance. The findings suggest that the effective utilisation of AIS improves the quality, accuracy, and timeliness of accounting information, strengthens internal control practices, and supports more effective managerial decisions. These improvements are associated with higher organisational effectiveness and stronger business performance among small and medium-sized enterprises. Practical Implications: The findings emphasise the value of strengthening Accounting Information Systems and enhancing employee capabilities in the effective use of accounting technologies. Firms that invest in these areas are better positioned to improve financial management, optimise operational processes, reinforce internal control, and sustain organisational performance within an increasingly competitive business environment. Originality/value: This study provides empirical evidence on the contribution of Accounting Information Systems to organisational performance within the Iraqi SME context. The research expands the existing body of knowledge by demonstrating the importance of AIS in supporting managerial decision-making, operational efficiency, financial control, and business performance. The findings offer practical guidance for firms and practitioners seeking to improve organisational effectiveness through the strategic implementation of Accounting Information Systems.