Accounting without a General Ledger: Insights from Micro, Small and Medium Enterprises in Pakistan
- Muhammad Asif Jaffer
- masif@iba.edu.pk
- Assistant Professor Accounting at School of Business Studies, IBA, Karachi, Pakistan
- (Corresponding Author)
Submitted
November 22, 2023
Accepted
November 22, 2023
Accepted
November 22, 2023
- Received
- 3 January 2024
- Revised
- 18 April 2024
- Accepted
- 29 October 2024
Abstract
This study examines the formality of accounting practices within Pakistan’s micro, small
and medium enterprises (MSMEs). Data was gathered from 110 MSMEs located in Karachi,
Pakistan. The research focused on eight dimensions of accounting systems: chart of accounts, payroll
records, receipt and payment records, party ledgers, employee time records, segregation of duties,
documentary support, and budgetary control. These dimensions were analyzed in relation to four
firm-level attributes: organization type, firm size, firm age, and type of business. The results indicate
that most firms do not utilize these accounting dimensions, a finding that is consistent across various
firm ages and business types. However, firm size shows some association with the utilization of four
of the eight dimensions. The implications of these findings are discussed in the context of agency and
institutional theories, and some policy recommendations are provided. Future research could use this
exploratory study to investigate the motivations and structural barriers that influence the adoption
or avoidance of formal accounting practices by MSMEs, as well as how these enterprises use
accounting information and the challenges they encounter.
Keywords
Accounting practices
accounting records
SMEs
determinants of formal accounting practices
entrepreneurial ventures
This work is licensed under LJB.
- Citation
Jaffer, M. A. (2024). Accounting without a General Ledger: Insights from Micro, Small and Medium Enterprises in Pakistan. The Lahore Journal of Business, 12(1), 113-134.
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