BUSN20019: Professional Project Role of Accounting Information in the Profitability of Small Business Assessment 1: Project Context and Research Proposal This research proposal is submitted to Central Queensland University in fulfilment of requirement of BUSN20019 (Professional Project) for the degree of MASTERS IN PROFESSIONAL ACCOUNTING Submitted by: Kewal Shrestha (S0266194) Submitted to: Mr. Olav Muurlink (Course Coordinator) Submitted on 24th April 2017   Table of Contents 1. Project Context …………………..…………………………….1 2. Project Proposal ………………………………………………....1 2.1 Background …………………………………………………1 2.2 Problem Statement……………………………………………...2 2.3 Research aim and justification…………………………………2 2.4 Literature Review……………………………………………….3 2.5 Methodology……………………………………………………..3 2.6 Gantt Chart……………………………………………………...4 2.7 Organisation of the study……………………………………….5 References Annex   1. Project Context I am pursuing the accounting degree and I would like to be an accountant by profession. This report is about how the accounting information can affect the profitability of small business firms. At the first part of this report, the project proposal is explained and the upcoming part would include the methodology, findings, discussion and conclusion that will be explained and explored. The firm’s success depends upon the thorough understandings of the environment in which it is operating. But it should not neglect its internal resources and capabilities as well. The combination of both will create a strategic fit which will result in the sound financial performance of the business operations. The financial accountant is the key asset of any business organisation who gathers all the relevant data and information from the business environment and makes evaluation of the company’s financial position and performance (Bromwich, 1990). The financial account is responsible for making good decisions on behalf of the business and makes a proper prediction on using the budgetary information. According to Fransinsco and Ceu-Alves, 2012, the role of financial accountant in gathering all the financial information through accounting software is the easiest task. However, the difficulty appears in sorting, interpreting and communicating the outcome of accounting information to the related persons. Financial accountant summarizes the pastperformances of the organisation and analyse the current financial strength through income statement and statement of cash flows. Thus, it is crucial for the accountant to use the correct accounting information for the benefit of the business firms. 2. Project Proposal 2.1 Background Accounting information is related with the financial position, liquidity and profitability of an organisation. Thus, the accountant can take right business decision with solid accounting information on timely manner. According to Arneld and Hope(1990), accounting information helps to understand the management’s tasks more clearly and minimizes the possibility of taking wrong decisions. The profitability of any business has long term effect and thus, it is crucial to analyse the accounting information before taking any decisions. Similarly, accounting information has been valued as a learning machine that helps in the evaluation of how the objective is accomplished by calculating the financial impact of each alternative available to the decision (Budugan and Georsu, 2009). Therefore, this project is undertaken to determine the role of accounting information in maintaining the profitability of the business by taking good decisions at right time. 2.2 Problem Statement Most of the small business organisations are ignoring the importance of the accounting information and book keeping with respect to their business transactions. The main reason behind this could be the lack of proper knowledge in the book keeping practices. Also, the owners of the small firms prefer to hire unskilled clerical and accounting staff due to the high cost of the skilled ones. The result of hiring these unskilled staffs only ended the firms to wound up. It is due to the unreliable accounting record kept by these personnel like not able to correctly determine the profit or loss of the firm preparing income statement. It has also been found that the small business doesn’t keep the proper accounting records and also fail to apply proper accounting procedures. Because of this, they are not able to depict the exact financial position of the business. This will ultimately affect the loan borrowing capacity of the firm as the suitable financial information cannot be determined. It is significant to state that the absence of sound accounting information not only impairs the growth of the business but also create obstacles to obtain the credit facilities from the creditors and with the shortage of cash in the business, the expansion will be difficult resulting in the loss of the business. 2.3 Research Aim and Justification Research Aim The primary objective of the research is to examine the role of accounting information on small business profitability. Besides this, some other objectives are; • Analyse the relationship between accounting information and performance of small business • Examine the importance of accounting information and basic accounting procedures in small business • Determine how the accounting information is being used for measuring the financial performance of the small business • Analyse how the decision made by small firms are affected by the accounting information Justification of the project The justifications of the project are; • It will help to understand the how the accounting information can help the small firms in making profits. • It will help the firms to understand the relationship between maintain accounting records and its implementation. • It will assist the small firms to understand the advantage of proper booking keeping by following the correct accounting procedures. • It will help to understand how the correct accounting records will help the small firms to make the business profitable through the detailed examination of the financial report. 2.4 Literature Review The sole objective of any business organisation is to make profit and so is the aim of small business also. Although the objective is simple the genuine procedure is complicated and the complexity of maintaining the business is tough (Husin& Ibrahim, 2014). The organisation today runs in a dynamic environment and they must be able to produce that benefit by exploiting their inner capacity and effectively cope with the outside variables affection the performance of operation (Berry, Sweeting and Goto, 2006). The only way to be in competition with the rivals is to effectively utilize the inner resources and spontaneously responding to the outside elements of the business firms (Kamyabi and Devi, 2011). The small business is an inevitable part of any country’s economy and it outlines a big portion of private division in many developed and developing countries (Cragg, Calderia and Ward, 2011). Abdelazim (2005) suggests that the financial accounting is related with summary, examination and reporting of business transactions. The financial accountant is the key person to satisfying the demand of correct accounting data in the organisation which help the business firms to take correct decision (Francinsco and Ceu-Alves, 2012). The small business don’t take the standard of accounting records seriously which end in not having the ability to show the sound financial position of their business (Nieto, M.J. &Fernandezthe, Z. (2006). According to Blackburn, R & Jarvis, R (2012), the core objective is to breakdown the determinants of the outsourcing of Bookkeeping data in small business firms. Thus, the small business firms should be given more support so that they can contribute even more in the economy. 2.5 Methodology Following methodologies are applied to determine the aims and objectives of the project. • Literature Review It focuses on the examination of the existing research which is related to the proposed topic from different sources like google advanced, google scholar, journal articles,etc. • Study Area The researcher will be conducting some analytical study with respect to the accounting information role in determining the small firm’s profitability. Thus, the researcher will critically examine the relation between the accounting information and the firm’s profitability. • Research Design The initiative of this research proposal will be the hunting of various relevant data in relation to the significance of accounting information in the profitability of small business firms. Information that is gathered from the secondary sources is the accumulated and analysed to explain the role of accounting information in small business’s profitability. • Nature and sources of data The data that will be collected and analysed will be of only secondary nature and no primary data will be used. The secondary data will be collected from online sources like censuses, information collected by government and departments, organisational records and the data originally collected for the other research purposes. 2.6 Gantt Chart Task Start End Duration Project proposal 06/03/2017 16/04/2017 40 days Literature Review 18/04/2017 5/04/2017 17 days Information collection 6/04/2017 16/05/2017 10 days Analysis of the information 17/05/2017 25/05/2017 8 days Final Project 26/05/2017 02/06/2017 7 days 2.7 Organisation of the Project The project will be carried out as per the Gantt chart shown above. The project proposal will be submitted first and the relevant literature review will be taken into account which will be followed by the collection of relevant information from secondary data and then, the information will be analysed to show the role of accounting information in small firm’s profitability. The researcher will then start finalising the report.   References Abdelazim, M. (2005). The Role of Accounting Information in Organizations Strategic Management. Journal of Economic and Administrative Sciences, 21(1), 1-41. http://dx.doi.org/10.1108/10264116200500001 Arnold & Hope (1990)”Accounting for Management Decisions” 2nd. Ed., Prentice Hall, Hemel Hempstead. Berry, A. J. Sweeting, R., &Goto, J. (2006). The effect of business advisers on the performance of SMEs. Journal of Small Business and Enterprise Development, 13(1), 33-47. http://dx.doi.org/10.1108/1462000610645298 Blackburn, R. & Jarvis. R. (2012). The role of small and medium practices in providing business support to small- and medium-sized enterprises. Information paper, International Federation of Accountants, 3(4), 237-242. http://dx.doi.org/10.5923/j.mm.20130304.07 Bromwich, M. (1990). The case for strategic management accounting: The role of accounting information for strategy in competitive markets. Accounting, Organizations and Society, 15(1-2), 27-46. http://dx.doi.org/10.1016/0361-3682(90)90011-i Francinsco, L. &Ceu-Alves, M. (2012). Accounting Information and Performance Measurement in a Non-profitOrganization: Performance Measurement and Management Control: Global Issues,(Studies in Managerial and Financial Accounting, 25 Emerald Group Publishing Limited, pp.465 – 487.http://dx.doi.org/10.1108/S1479-3512(2012)0000025020 Husin, M. & Ibrahim, M. (2014). The Role of Accounting Services and Impact on Small Medium Enterprises (SMEs) Performance in Manufacturing Sector from East Coast Region of Malaysia: A Conceptual Paper. Procedia - Social and Behavioural Sciences, 115, 54-67. http://dx.doi.org/10.1016/j.sbspro.2014.02.415 Kamyabi, Y. & Devi, S. (2011). Use of Professional Accountants’ Advisory Services and its Impact on SME Performance in an Emerging Economy: A Resource-based View. Journal of Management and Sustainability, 1(1). http://dx.doi.org/10.5539/jms.v1n1p43 Nieto, M.J.& Fernandez, Z. (2006).The role of information technology in business strategy of small and medium enterprises, Journal of International Entrepreneurs, 3,251-262.http://dx.doi.org/10.1007/s10843-006-7854-z Cragg, P., Caldeira, M., & Ward, J. (2011). Organizational information systems competences in small and medium-sized enterprises. Information & Management, 48(8), 353-363. http://dx.doi.org/10.1016/j.im.2011.08.003 Budugan, D., &Georgescu, I. (2009). 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