ROLE OF ACCOUNTING INFORMATION SYSTEM DIGITALIZATION ON OPERATIONAL EFFICIENCY OF SMEs IN ILORIN

Abstract

This study examines how the operational efficiency of small and medium-sized businesses (SMEs) in Ilorin, Nigeria, is affected by digitalized accounting information systems. Drawing on the Technology Acceptance Model and contingency literature, the paper tests how AIS adoption, AIS automation, and employee competency influence operational efficiency, and whether government policy moderates these relationships. Using a descriptive survey, data were collected from 359 registered SMEs in Ilorin and analysed with Partial Least Squares Structural Equation Modelling (PLS-SEM). Results indicate that AIS adoption (β = 0.237, t = 5.09, p < 0.001), AIS automation (β = 0.274, t = 6.72, p < 0.001) and employee competency (β = 0.364, t = 8.25, p < 0.001) significantly and positively predict operational efficiency. Government policy showed no significant moderating effect. Robustness checks (Harman’s single factor, multicollinearity, and bootstrapping with 5,000 samples) confirm result stability. Digitalizing AIS significantly enhances SME performance in Ilorin, principally when employees are competent. Policymakers should finance targeted AIS training and subsidized cloud accounting packages for SMEs in order to enhance performance. Equally, SMEs are advised to prioritize staff upskilling and adopt affordable cloud accounting to realize immediate efficiency gains. The study contributes locality-specific evidence for Ilorin and actionable policy prescriptions for SME digital.