The Impact of Management Accounting Practices on Firm Performance: The Mediating Role of Quality of AccountingInformation Systems (QAIS) – Evidence from Pakistani Manufacturing SMEs

Abstract

Even though smaller manufacturing enterprises experience severe operational difficulties and the primary reason of this failure is an over-reliance on traditional manual bookkeeping instead of modernized financial control mechanisms. Based on Contingency Theory, this study addresses this empirical gap by exploring how the Quality of Accounting Information Systems (QAIS) mediates the relationship between Management Accounting Practices (MAPs) and Firm Performance (FP). This relationship is measured by utilizing a quantitative, cross-sectional research design, primary data was gathered from 250 executives, via non-probability snowball sampling. Statistical outputs generated using SPSS revealed strong internal consistencies and significant positive correlations across all variables. Crucially, the regression and mediation analysis confirmed that QAIS acts as a powerful partial mediator. The empirical findings suggests that to ensure sustainable competitive advantage and superior financial outcomes, manufacturing SMEs must cooperatively process their accounting practices through high-quality, integrated digital infrastructure. These findings have major strategic implications, which encourage managers to view accounting software as a competitive advantage rather than an operational burden, and prompting policymakers to incentivize technological upgrades within the SME sector.