Accounting Information System (AIS) Alignment and Non-financial Performance in Small Firm: A Contingency Perspective

Abstract

Accounting Information System (AIS) is very important for Small and Medium Enterprises (SMEs) because it can provide information for the owner in decision making. In line with the result of previous study, which find that AIS alignment is needed because it will affect company performance. This study aims to test the direct relationship and mediating relationship among three contingency variables of AIS alignment on non-financial performance. This study employs questionnaire with 87 SMEs owner in Yogyakarta region as samples. The results show that AIS sophisticated, owner commitment affect non-financial performance, either directly or mediated by AIS alignment. This study implies that AIS is very essential for SMEs to survive in a very competitive environme.Non-financial performance 1 Refers to previous study that found that accounting information system has the same terminology with Management Accounting System (MAS) Management Information System (MIS), accounting information system which is the part of information technology [15,16]. implementation [6]. Second, company needs a large sum of money to make a design, test, and implement IT Lim et al. [7], while the limitation in budget is the main problem faced by SMEs [8]. Third, even though SMEs owner realize that performance measurement is an important activity, however they may not use it properly [9]. The contingency perspective explains that organizational performance is affected by internal factors [10]. In line with the argument, Hussin et al. [11]; Ismail and King [12] explain that SMEs performance is affected by alignment between capacity and IT requirement. Furthermore, Ismail and King [13]; Al-Eqab and Ismail [14] prove that IT alignment is affected by organizational factors such as AIS sophisticated and owner commitment, and situational factor that is external IT expertise [11]. The SMEs need AIS sophisticated to face market competition [3], to facilitate the realization of objectives [17], provide flexibility in developing strategy, especially in facing consumers' demand [18]. Besides that, SMEs also need owner's commitment in implementing the IT; the more committed the owner, the implementation of technology will be easier [19]. The SMEs owner who have commitment will realize that IT is very important for SMEs to survive [20]. In addition to AIS sophisticated and owner commitment, external IT expertise becomes another important factor for SMEs in IT implementation [11]. Human resources limitedness makes external IT expertise is needed for SMEs because assistance from the experts in IT may decrease risk and facilitate and fasten IT implementation in SMEs [20,21].This study aims to test direct relationship between AIS sophisticated, owner commitment, external IT expertise, and non-financial performance, as well as the indirect relationship among the variables mediated by AIS alignment. This study results are important for SMEs owner so that they can plan and select the IT that meet their capacity and requirement. This study employs non-financial perform...

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