Assessing the nexus between accounting record keeping, tax avoidance and growth of SMEs in Bauchi state

Abstract

Inability to keep proper accounting record by the SMEs has been source of concern by all the relevant authorities as those records are useful not only in assessing the profitability and growth of the entities but also in assessing the business viability, credit worthiness in accessing financial assistance and possible source of revenue to the government. This study investigated
the effect of Accounting record keeping on SMEs growth in Bauchi state. In addition, the study investigated the moderating role of tax avoidance in the relationship between record keeping and the SMEs growth. Primary data was used in analyzing the relationship between SMEs Accounting record keeping, tax avoidance and the SMEs growth. The findings revealed that
accounting record-keeping is the most robust predictor of firm growth in these models. Tax avoidance shows a negative impact on the SMEs growth when considered alone, but this effect diminishes when considering its interaction with accounting record-keeping. Key Determinant of Accounting record-keeping is the key determinant of firm growth, consistently showing a strong positive relationship. The study recommends that Policymakers should promote and support initiatives that enhance accounting record-keeping among firms. This could include offering training programs, providing subsidies for accounting software, and encouraging adherence to financial reporting standards.