Outsourcing accounting services and accountability: evidence from small and medium scale enterprises in Osogbo, Osun State, Nigeria

Abstract

Purpose: This study investigated the influence of accounting activities outsourcing on accountability in small and medium-scale enterprises (SMEs) in Osogbo, Osun State, Nigeria. Methodology: The survey research design was employed for the study, with the population of the study consisting of 120 registered small and medium-scale enterprises (SMEs) operating in Osogbo. The convenience sampling technique is adopted in selecting 100 respondents from the SMEs to make up the sample size of the study. Data for the study were collected using questionnaires. The study adopted correlation and regression analysis to examine the relationship and effect of the explanatory variables on the dependent variables. Results and conclusion: The study found that accounting activities outsourcing has a positive significant effect on transparency while it has a negative effect on the relevance of financial activities. Also, accounting activities outsourcing has a non-significant effect on accountability. The study therefore recommends that SMEs should engage professional accounting services to improve transparency, ensure outsourced accounting functions are properly monitored to maintain relevance, and complement outsourcing with internal controls to enhance overall accountability. Implication of findings: The implication of this study is that outsourcing accounting activities can improve transparency in SMEs but may reduce the relevance of financial information if not properly managed. It also suggests that outsourcing alone does not guarantee accountability without adequate supervision. SMEs should therefore manage outsourced accounting functions strategically to enhance transparency, relevance, and accountability.