Development Of An Accrual-Based Accounting Information System With An Internal Control System

Abstract

Small and Medium Enterprises (SMEs) often rely on traditional accounting methods, leading to challenges such as inaccurate financial reporting and weak internal controls. This research aims to address these issues by developing an accrual-based accounting information system that integrates automated financial processes and internal control mechanisms. The motivation for this study arises from the need to improve financial management practices in SMEs, enabling better decision-making and operational transparency. The proposed system automates revenue recognition, expense matching, and transaction verification, incorporating anomaly detection to prevent fraud. Evaluation through case studies and surveys of SMEs demonstrated significant improvements in financial reporting accuracy, a 30% reduction in processing time, and enhanced internal control. The contribution of this research lies in the development of a practical solution for SMEs, enhancing their ability to manage finances effectively while ensuring compliance with accrual accounting principles. Future work includes expanding the system's scalability to support larger enterprises, integrating predictive analytics for financial forecasting, and evaluating its long-term impact on business performance. This research contributes to the broader field of accounting automation and internal control, providing insights into how SMEs can adopt more efficient and secure accounting practices to promote business sustainability.