An assessment of Record-Keeping as an Aid to Risk Management of SMEs in Bindura (2009-2013)

Abstract

The study explored the accounting records maintained by Bindura based SMEs and assessed their completeness and adequacy in aiding risk management thereby evaluating the causal relationship between accounting information and risk management. This was prompted by the persistent downward movement in operating capacity of SMEs in Bindura. Data was gathered by interviews and questionnaires were administered to 56 SMEs out of a population of 97 registered SMEs in Bindura. SMEs operating in six economic sectors which are; Retailing, Transport, Steel fabrication, Tailoring, Food Processing and Hairdressing and Saloons were chosen. The study found out that accounting records are significant in complementing and aiding risk management in SMEs. The results indicate that there is a strong positive relationship between the accounting records and risk management practices using the Pearson correlation co-efficiency. In conclusion, findings revealed that most of SMEs managers had insufficient knowledge in accounting and financial management and did not employ and or consult accounting officers in their operations. It was recommended that SMEs owner-managers in Bindura should seek financial literacy or should consult and or employ professional accounting officers. SMEs in Bindura should also have risk management frameworks embed in their operations.