THE INFLUENCE OF ACCOUNTING INFORMATION SYSTEMS AND THE QUALITY OF FINANCIAL REPORT ON THE PERFORMANCE OF MSMES WITH FINANCIAL LITERACY AS A MODERATING VARIABLE (A case study of SMEs in Medan City)

Abstract

The performance of SMEs is a key indicator in assessing the success of small and medium-sized enterprises in facing business competition. Optimal performance is closely linked to effective financial information management through accounting information systems and the preparation of high-quality financial reports. This study aims to (1) identify and test the influence of accounting information systems on SME performance; (2) identify and test the influence of financial report quality on SME performance; (3) identify and test the moderating effect of financial literacy on the relationship between accou nting information systems and SME performance; and (4) identify and test the moderating effect of financial literacy on the relationship between financial report quality and SME performance. This study employs an associative approach using primary data obtained through the distribution of questionnaires to SME operators in Medan City. The sampling technique used is purposive sampling, with a sample size of 48 respondents. The data analysis techniques used in this study include outer model analysis, inner model analysis, and hypothesis testing using Smart Partial Least Squares (PLS) software version 4. The results of the study indicate that (1) the accounting information system has a significant effect on SME performance; (2) financial report quality has a significant effect on SME performance; (3) financial literacy moderates the relationship between the accounting information system and SME performance; and (4) financial literacy moderates the relationship between financial report quality and SME performance.