Investigating the presence or absence of accounting amongst petty traders in the Kumasi Metropolis

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This research examined the presences or absences of accounting in petty trading in the Kumasi Metropolis. The study therefore investigated the assumption that "accounting is a universal good and should be present in every business entity" as premises of determining the presence or absence of accounting The methodology applied was the Mixed Method under the Multiple Methods Choices. Both qualitative and quantitative * techniques were used. The findings were that formal education is not a pre-requisite requirement to the operations of a petty trading business. However, the study revealed the presence of accounting in petty trading; thus confirming the assumption that accounting is a universal good and is present in the petty trading business. The main hypothesis that "there are evidences of accounting presence in the petty traders' business" was accepted on the basis that the traders understood the concept of accounting, they kept written records of their business transactions, and there were evidence of the use of accounting information by the traders. Findings on the three major factors that influenced the present or absent of accounting among petty traders revealed that: there were no state institutions or pressure groups in Ghana to influence or oblige private entrepreneurs (petty traders) to prepare financial statements; the literacy of the petty trader though was found to be a necessary factor, it was not sufficient to explain the accountancy presence or absence in the traders' businesses. The usefulness of the accounting information to the petty trader influenced the presence or absence of accounting in the traders' business. Finally, the level of trust - social capital in the community, influencing the presence or absence of accounting, was relatively insignificant in the context of urban Ghana. To the best of my knowledge, no study of this kind has been conducted in the field of accounting presence or absence in Ghana. Time and financial constrains limited the study to a sample of eighty four selected petty traders in Kumasi. The findings are generally representative of the situation in the petty trading business in the Ghanaian economy.
A Long Essay submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (MBA) in Accounting,2008