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Assessing Bank Statement Reconciliation Practices Among Nigerian SMES

Mbanasor Christian (Ph.D); Onwuka, Onwuka Okwara (Ph.D); Uche Okoro Orji (Ph.D)

Abstract

This study assesses the bank statement reconciliation practices (BSRP) among Nigerian Small and Medium Enterprises (SMEs) and examines its impact on financial performance, detection of errors and discrepancies, and effectiveness in curbing fraud. A survey of 61 Nigerian SMEs was conducted, and the data were analyzed using various statistical techniques, including Granger causality tests, unit root tests, cointegration tests, and Autoregressive Distributed Lag (ARDL) tests. The results of the study reveal that BSRP has a significant positive relationship with financial performance, indicating that SMEs that practice effective BSRP are likely to experience improved financial performance. The study also finds that BSRP varies across different industries, suggesting that industry-specific factors influence BSRP. Furthermore, the study reveals that the level of education of SME owners/managers has a significant impact on their understanding of BSRP, highlighting the importance of education in enhancing BSRP. The study also examines the impact of BSRP on the detection of errors and discrepancies in financial transactions and finds that BSRP has a significant impact on detecting errors and discrepancies. The results of the study have significant implications for Nigerian SMEs, policymakers, and regulators, highlighting the importance of BSRP in improving financial performance and detecting errors and discrepancies in financial transactions. The study contributes to the existing literature on BSRP and provides insights into the practices of Nigerian SMEs. The findings of the study have significant implications for policymakers and regulators, highlighting the need to emphasize the importance of BSRP and provide support for SMEs to implement effective BSRP.

Keywords

Bank Statement Reconciliation PracticesNigerian SMEsFinancial PerformanceDetection of Errors and DiscrepanciesEffectiveness in Curbing Fraud.

References

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