Course: Management Information System (MIS)

Article Reviewed on:

“Computerized Accounting Information System Adoption among Small and
Medium Enterprises in Addis Ababa, Ethiopia”
Authors: Habiba, Y., Azhar, M. N. Annuar, B. M.N., Mastora, Y. International Journal of Accounting, Finance and
Business (IJAFB) Volume: 4 Issues: 19 [June, 2019] pp. 44 - 60]

Prepared by:
S.No. Name ID
1. EMISHAW AMSALU 279/2014
2. TSEGAYE HAILE 482/2014
3. DEJENE GEDAMU 551/2014
4. KITESA DEGEFA 442/2014
5. BANCHAYEW TILAHUN 396/2014

Submitted To: Amanuel Ayide (Ph.D)

January, 2022

Addis Ababa

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Contents
1. Summary....................................................................................................................................................1
2. Key Concepts, Definition and Research gap of the Article.........................................................................1
3. Objective/Purpose of the Article................................................................................................................1
4. Methodology of the Article........................................................................................................................2
5. Key Findings and Recommendation...........................................................................................................2
6. Contributions.............................................................................................................................................2
7. General Critique (Strength & Weakness of the Article)..............................................................................2
7.1. Strength of the Article........................................................................................................................2
7.2. Weakness of the Article.....................................................................................................................2
8. Conclusion..................................................................................................................................................3
Reference...........................................................................................................................................................3

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 1. Summary
The authors in this article present the adoption of computerized accounting information system
(CAIS) among small and medium enterprises (SMEs) in Addis Ababa, Ethiopia and determined its
influencing factors.
A logistic regression technique was used in this study because the research model used dichotomous
dependent variables such as fully and partial adopters of CAIS, and six continuous independent
variables. The study is based on a case study of using a questionnaire survey; data was collected
from 300 firms to validate the proposed technological, organizational and environmental (TOE)
framework model.
The result in this article shows that 31 % of SMEs were using fully CAIS while the rest 69 % of
them were using a combination of manual AIS and CAIS. Out of six proposed factors assessed, firm
size and financial readiness under organization context were significant.
2. Key Concepts, Definition and Research gap of the Article
Small and medium-sized enterprises (SMEs) are a very heterogeneous group of businesses
usually operating in the service, trade, agri-business, and manufacturing sectors.
The authors in this paper have mentioned the definitions of SMEs may vary from one country to
another depending on a number of factors including their economic status. According to the
new Small & Micro Enterprises Development Strategy of Ethiopia FeSMEDA (2011) and
Mosisa (2011), the working definition of micro and SMEs based on capital and number of
employees.
Computerized Accounting Information System (CAIS) refers to the system that companies employ
to record business transactions, report financial results, prepare budgets, and analyze variances
(Saracina, 2011). The use of CAIS aids SMEs by providing proper, timely and detail financial
information and accounting reports. Based on which SMEs can evaluate performance of ongoing
business operations and plan for a better performance in the future by amending possible faults in
previous action plans (Senik et al., 2012).
Therefore, in order to fill this gap & maximize the contribution of those manually operating SMEs to
the national economic growth and to enhance their competitiveness, adoption of information
technologies such as Computerized Accounting Information System (CAIS), is of paramount
importance.
3. Objective/Purpose of the Article
The objective of the study was to examine the factors that influence the adoption of Computerized
Accounting Information System (CAIS) among Small and Medium Enterprises (SME).

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 4. Methodology of the Article
The research was empirical because the hypothesis stated in the research were tested
empirically by using data collected from surveying 300 firms to validate the proposed
technological, organizational and environmental (TOE) framework model. The author uses
qualitative and Quantitative research approach because it is deemed to be more appropriate for
this study since the study sought to understand the challenges of deploying CAIS (Computerized
Accounting Information System). The study is exploratory in nature.
5. Key Findings and Recommendation
The data analysis results suggest that majority of the firms (69%) were using partially CAIS (i.e., a
combination of computerized and manual form of AIS) while the rest 31% were fully computerized.
In this article the logistic regression output result shows the percentage of adoption of CAIS used
correctly predicted is 89.6%. Meanwhile the sensitivity value is 35.9% which explains the proportion
of the fully CAIS which is correctly identified. The findings showed Out of the six factors predicted
to be influential on the adoption of CAIS among SMEs in Addis Ababa, Ethiopia: perceived benefit
of CAIS for better preparation of financial statement and report, and decision making, financial
readiness, technology readiness, external pressure and firm size, two of them namely, firm size
strongly and financial readiness moderately had significant influence on adoption of CAIS.
As a recommendation; this study suggested that there is a need to provide incentive programs to
encourage SMEs to adopt CAIS for greater achievement and to create awareness about the
importance of CAIS. By which the SMEs would be beneficial.
6. Contributions
This study will contribute to the existing literature in several ways. The study might generally give
important insights to academicians, governmental and professional bodies regarding the adoption of
CAIS as well as the factors that influence the degree of CAIS adoption among SMEs in Addis
Ababa, Ethiopia.
7. General Critique (Strength & Weakness of the Article)
7.1. Strength of the Article
The article enlightens governmental and professional bodies regarding the adoption of CAIS as well
as the factors that influence the degree of CAIS (Computerized Accounting Information System)
adoption among SMEs in Addis Ababa, Ethiopia.
7.2. Weakness of the Article
The data provides limited references regarding factors from different source. As an initial effort to
address a complicated phenomenon, this study is subject to some limitations. The authors do not

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included large sized firms in the study. Only formal Enterprises are included in the study so it should
consider informal enterprises also.
8. Conclusion
In this article the authors concluded that majority of SMEs in Addis Ababa are highly dependent on
manual AIS with firm size and financial readiness identified as significant influencing factors on
fully CAIS adoption. For our country case this study has good eye openers in general.

Reference
(FeMSEDA) (2011). "Micro and Small Enterprise Development Strategy, provision framework and
methods of Implementation Framework and Method of Implementation," Addis Ababa.

Mosisa,T. (2011). Accounting practices of small and medium sized enterprises and its effect on
access to finance in Addis Ababa. Master Thesis. Addis Ababa University, School of Graduate
Studies.