Browsing by Author "Aruppala, W.D.N."

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Assessment in internship – experiences of accountancy degree programme – university of Kelaniya
(Department of Accountancy, University of Kelaniya, 2015) Aruppala, W.D.N.; Jayamaha, A.
Internship has become an important component in accounting degree pragrammes in universities over the past decades. Academics and researchers believe that internship provides smooth transition of undergraduates from oncampus environment to the working environment (Muhamad et al 2009). Further, practitioners in accounting profession have identified that internship experience benefits not only to improve the quality of the degree programme and the skills of the students but also benefits to the employing entity during and after the internship (Beard 2006). Hence, interaction and evaluations among students, faculty and practitioners during and after the internship is invaluable in measuring outcome of the internship programme. Department of Accountancy (DoA), University of Kelaniya, Sri Lanka has introduced internship to the accounting degree curriculum in 1998. DoA believes that the objective of introducing the internship component to Accounting programme is to facilitate students to gain practical exposure from the dynamic business environment, and to enhance teamwork sprit and the employability. To achieve these objectives multiple assessment activities have been introduced in par with the International Accounting Bench Marks designed by Universities and professional institutions, and those activities have been increasingly changed to strengthening the programme. The objective of this paper presents the multiple assessment activities created by DoA in internship pragramme since 1998 to maintain the quality of the accounting degree programme. The assessment activities presented in this article are useful for other accounting pragrammes for improving quality and for accreditation of their degree programmes.
Board Composition and Its Effects on the Financial Performance of Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Gunathilake, K.S.; Aruppala, W.D.N.
Corporate governance mechanism gained considerable attention during past two decades as corporate scandals have taken place in the world. Some corporate failures in Sri Lanka made introduction to corporate governance mechanism and new Companies Act No. 7 of 2007 which replaced the old Companies Act No. 17 of 1982. The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) Securities and Exchange Commission (SEC) issued corporate governance regulations and corporate governance regulations made mandatory for all listed companies in Sri Lanka for the financial year commencing on or after 01st April 2008. This study focuses on four basic aspects of board composition that have been incorporated in recent reform of Codes of Best Practices: board size, CEO duality, gender diversity and independent directors in the board. The main objective of this study is to seek out the impact of board composition on the financial performance in listed companies. To get the efficient outcome, 50 companies were selected under ten GICS sectors in Colombo Stock Exchange (CSE) over 5 years from 2016 to 2021. Correlation and regression analysis utilized to find out the impacts of board structure on the financial performance. Moreover, this study is helpful for shareholders and policy makers to maximize the profit.
Can it classify as Inventory or PPE?
(Department of Accountancy, University of Kelaniya, 2016) Vimukthirathne, T.H.N.; Aruppala, W.D.N.
ABC shipping (private) Limited is a limited liability company incorporated in Sri Lankan and registered under the companies Act no 7 of 2007.It is a transportation Company. Company owns a ship which is called as “Meritine”. The principle activity of this Company is transporting gas & fuel by using this ship. Generally there are two cylinders in every ship in order to balance the ship. Most of the ships have filled these cylinders by using oil but here, this ship has used gas to fill these cylinders. Normally this ship is repaired once per every four years. When repairing ship, the gas filled in the cylinders will release to the air which would be a lost to the company.
Challenges of Implementing Computerized Accounting System in Small and Medium Scale Enterprises in Sri Lanka (With special reference to Western Province)
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Srimali, R.K.U.; Aruppala, W.D.N.
Small and medium businesses make up 80% of all businesses in Sri Lanka. The major goal of this research is to determine the barriers to the implementation of computerized accounting systems in Sri Lankan SME's. This study focuses on the impact of cost, the nature of the organization, organization infrastructure, convenience of use, management aid, and government assistance on the adoption of a computerized accounting system in Sri Lanka, as a current topic. Computerized accounting system was a crucial component in the smooth operation of the firm due to the epidemic in the country. The research question is to find out why many small and medium-sized businesses in Sri Lanka don't use computerized accounting systems and what are the reasons on it. There has been no research on the reasons why small and medium sized businesses in Sri Lanka do not use computerized accounting systems, as well as the impediments to their use. This study contributes by encouraging small and medium-sized businesses to adopt computerized accounting systems. Most SMEs can get their technology decisions on computerized accounting systems through this research findings. This study is based on quantitative approach which uses numerical method. 150 SMEs in the western province were surveyed using a standardized questionnaire. The question is primarily based on the literature review conducted in conjunction with this research. The dependent variables are addressed in the first section, while the independent variables are addressed in the second section, which is the use of computerized accounting systems in SMEs. The data will be collected and analyzed using the SPSS software and tool. Furthermore, the study's findings will aid owners, managers, and other stakeholders to identifying obstacles that SMEs have while deploying computerized accounting systems.
Change Driven to Success Case Study on Screenline Holdings (Pvt) Ltd, Sri Lanka
(Staff Development Unit, Faculty of Commerce & Management Studies, University of Kelaniya, 2015) Rathnasiri, U.A.H.A.; Rajapakse, R.M.D.A.P.; Perera, H.A.P.L.; Aruppala, W.D.N.; Kaushalya, M.D.P.; Thilakarathna, W.D.N.; de Silva, N.M.T.; Kumara, N.
Our desire in writing Change Driven to success was to provide faculty with a developed teaching package that allows them to enhance students’ learning and application of knowledge in business management. Appropriate use of theory and the acquisition of factual content and analytical skills are also important goals, but the main objective is to improve the ability of handling different types of managerial problems and opportunities intelligently. This case study book depicts a wide range of business management applications specially focusing on Entrepreneurship Development, Strategic Management, Management and Financial Management etc. Sufficient information is given in each module to support students in analyzing and decision making. The Change Driven to success reflects on the identified structural change in Screenline Holdings (Pvt) Ltd. which is one of the Sri Lanka’s largest screen printers and embellishers. This book comprises with five modules and each module ends with a contribution to practice to assist students in combining theoretical aspects with emerging workplace realities. This case study book submitted in partial fulfilment of the requirement for Staff Development Programme, Faculty of Commerce and Management Studies, University of Kelaniya conducted for Probationary and Assistant Lecturers.
Demand of Market Share Price: Evidence from Listed Banks in Colombo Stock Exchange
(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Indunilmini, E.A.I.; Aruppala, W.D.N.
This research motivates to study the extent to which firm-specific determinants and macroeconomic determinants to stock prices of listed banks in Colombo Stock Exchange. The relationship of internal factors and external factors has become one of the most researched areas among accounting researchers. However the relationship between firm-specific determinants, macroeconomic determinants and stock price in different stock exchanges including both developed and developing market settings whilst there is very limited knowledge in this regard in Sri Lankan context. Hence this paper focuses to analyze the bank-specific factors and macroeconomic factors on investor’s decisions. The purpose of this paper is to find out the internal and external determinants on investor’s decisions and to examine the relationship between these two types of determinants and stock price. The population of the study comprises of listed seventeen banks in Colombo Stock Exchange for ten years during the period 2008-2017 and collected data from the website of central bank and annual reports of banks. This paper uses Market Share Price as dependent variable and Dividend Payout Ratio (DPR), Net Interest Margin (NIM), Interest Rate (INT), Inflation Rate (INF) and Gross Domestic Product (GDP) use as independent variables. Correlation analysis and multiple regression analysis are used to find out the relationship and impact of independent and dependent variables. The results shows that there is significant positive relationship between GDP and the market share price and significant negative relationship between interest rate, inflation and the market share price
Determinants of Capital Structure of Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Senarathna, A.T.M.; Aruppala, W.D.N.
The financing mix of long-term debt and equity is known as capital structure in corporate finance and capital structure decisions are a key issue in a firm’s financial strategy. The optimal capital structure indicates the best debt-to equity ratio for a firm that maximizes its value while minimizing its cost of capital. This study aims to investigate the most important factors that affect the capital structure of commercial banks in Sri Lanka. Profitability (PROF), Earnings volatility (EVOL), Tangibility (TANG), Growth (GROW) and Bank size (BSZ) were used as independent variables while Book leverage (BLV) is used as the dependent variable. The study used secondary data of eighteen (18) commercial banks covering the period of 2011 to 2020. Data were analyzed using regression analysis and E-Views packages. The results expect that Profitability, Tangibility and Bank size will have negative impact on Book leverage while other variables have positive impact on Book leverage. This study will discuss the connection of trade- off theory and pecking- order theory with these relationships among variables as well. Findings of the study will be of interest mainly to managers which will help them to identify the bank- specific factors affecting the capital structure and choose the values enhancing optimal capital structure.
Determinants of internet banking adoption in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Mohotti, D.S.W.C.; Aruppala, W.D.N.
Today, the banking industry is essential for managing financial assets and offering financial services. All banks implement some new technical breakthrough for its institution as a result of the evolution of information systems and information technology. Clients are the most crucial component in the banking industry. Traditionally, every transaction is completed manually. Customers had to frequently visit a bank branch. Therefore, it involves a lot of time and money. However, internet banking is gaining popularity today and saves money and time. This study attempts to identify the determinants of online banking adoption in Sri Lanka. The research framework was based on the factors of advantages, technology, social influence, security and customer trust. When considering the Sri Lankan contest limited research has been undertaken on factors influencing the customer’s adoption of internet banking. Therefore, there is a need for studying further on this ground. Approximately about 200 students will be considered as the sample to initiate the collection of data and SPSS 20 will be used to analyze data. It is expected to identify technology and social influence as the most influential factors of online banking adoption. Further the findings of this study will be useful inputs for the decision makers of Sri Lankan banking industry.
Determinants of women entrepreneurs’ success: a study of small-and medium-sized enterprises in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Perera, P.A.K.P.; Aruppala, W.D.N.
Women in today's era are recognized as successful entrepreneurs through their passion, qualities and abilities for strong economic development. In Sri Lanka women entrepreneurs, especially in small and medium-sized enterprises, play a crucial role in rural economic development. Due to such an important contribution of women in economic development, this study focusses on examined the determinants of women entrepreneurs’ success of small and medium-sized enterprises in Sri Lanka. Starting a business is a rational choice faced by an individual who chooses precarious self-employment between certainty as an employee and possibly unemployment, depending on the expected utility in each state. This study focuses on individual determinants such as entrepreneurial characteristics, family background and institutional support. Data will be collected from 250 women entrepreneurs in small and medium-sized enterprises in Sri Lanka using structured questionnaire. Correlation and regression analysis is employed in data analysis of this study. This study is significant in many ways as it mainly examines the success of women entrepreneurs in the small and medium-sized enterprises who contribute greatly to the development of national economy. Many women entrepreneurs in developing countries like Sri Lanka face many challenges while running their businesses such as continue the entity and survival, innovation etc. Findings of this study will helpful to policy makers in developing SME sector and SME institutions to design their service offers. Further this will provide a good starting point to identify appropriate metrics. And this study will lead to a comprehensive study that can develop a valuable specification model for Sri Lanka's financial sector.
Determinants that Influence the Funding of SMEs And Analyzing Its’ Impact on SMEs’ Performance: Evidence from SMEs in Anuradhapura District
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Wijerathna., K.G.D.M.; Aruppala, W.D.N.
This study attempted to identify the capital structure determinants and its impact for the financial performance of Small and Medium Enterprises in Sri Lanka. This research based on primary data from the small and medium enterprises in Anuradhapura District. Firm sizes, liquidity, growth of business, age of business are independent variables that are considered as determinants of the capital structure. Dependent variables of the study are Return on investment (ROI), Return on assets (ROA) to measure financial performance. The researcher used survey method which was conducted by sharing a structured questionnaire to owners of the small & medium enterprise. In this research five hypotheses were developed and expected to identify the determinants of Capital Structure and its impact on Financial Performance of the SMEs.
Effect of Creative Accounting Practices on the Financial Performance of selected Sri Lankan Companies
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Nisansala, B.C.; Aruppala, W.D.N.
This research is an empirical survey of creative accounting practices in Sri Lanka. Practitioners do the creative accounting for the purpose of making the company appear to be financially stronger or weaker depending on the management’s anticipation. Thus, creative accounting practices do not provide a “true and fair” view of the financial statements. The general objective of the study was to assess the effect of creative accounting practices on the financial performance in Sri Lankan companies. This research considered tax avoidance, accelerated depreciation, and income smoothing as part of the major creative accounting practices that affect financial performance of Sri Lankan companies. The research used descriptive statistics to observe the major practices of creative accounting that affect to financial performance of Sri Lankan companies. The target population was professional in accounting and finance sector. A sample of 60 professionals was used for the study. Primary data was acquired through administering questionnaires and distribute to chartered accountant, accountant, CEOs, CA/ACCA student, auditors, company secretary and lecturers in accounting and finance sector. Statistical Package for Social Sciences Software (SPSS) 20.0 was used in carrying out the descriptive analysis. The study found that tax avoidance has a major influence on financial performance of the firm. Under tax avoidance aspect, tax incentives has a significant influence on firm‘s profitability showing that tax avoidance impacts financial performance. The findings also established that income smoothing has a hand in influencing financial performance and its practice resulted in decrease in financial performance. The research revealed that accelerated depreciation significantly influence financial performance of firms the respondents feel, firms do take advantage of accelerated depreciation to improve their financial performance.
Financial leverage and Firm Performance: Evidence from Sri Lankan Beverage, Food and Tobacco Companies
(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Imalka, H.A.; Aruppala, W.D.N.
This study investigates the effect of firm leverage and product diversity towards the financial performance of Sri Lankan Beverage, food and tobacco companies. Beverage, food and tobacco companies listed in Colombo Stock Exchange (CSE) for the period of 2011 to 2017. Financial leverage was considered as the independent variable and a financial performance was considered as the dependent variable. Accordingly debt to equity ratio & debt to asset ratio was used to measure the financial leverage and ROA; ROE & EPS were used as measures of financial performance. Product diversity was used as the moderating variable of this study. The secondary data obtained from corporate annual reports of sample companies were used in this study and descriptive statistics, correlation and regression analysis were used to analyses data of this study. Results of the study show a positive relationship between financial leverage and financial performance. Thus, alternative hypothesis which proposed as there is a relationship between financial leverage and firm performance was accepted and rejected the null hypothesis which proposed as there is no relationship between financial leverage and firm performance. Findings conclude that Beverage, food & tobacco sector companies of Sri Lanka can enhance their financial performance and profitability margins by having proportion of leverage in their capital structures
Impact of accounting information system (AIS) on organizational performance. a study of SMES in the southern province, Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Wijeweera, P.W.; Aruppala, W.D.N.
In recent times, the business environment has been constantly changing due to rapid technological changes. In this scenario, the composite and impulsive business dynamics play a significant role of Accounting Information System (AIS) as the major driver of the economic and business discourse. To determine the effect of AIS on organization performance globally, many studies have been conducted. However in the Sri Lankan context, this is less researched. Therefore, the purpose of this research is to investigate the impact of accounting information system (AIS) on organizational performance of southern province Sri Lanka. Three AIS components—accounting knowledge (AK), management support (MS), and record keeping performance (RKP) have been chosen for the right reasons with the help of literature. This research has used all the small and medium enterprises in Southern Province, Sri Lanka, as the population, which was approximately more than 800 enterprises (SMEs) in Southern Province, Sri Lanka. and 100 companies were selected as the sample for the study. A structured questionnaire has been utilized to collect data from 100 respondents working in the Southern Province of Sri Lanka, SMEs who were previously selected through convenience sampling. In this study, multiple correlation and regression analysis are used to analyze the data. According to the findings, AK and RKP have a strong positive relationship with organizational performance, while MS has a moderately favorable relationship with the reported profitability of those SMEs. The findings of this study will be useful for accountants or finance managers to ease the collection, analysis, and preparation of financial statements and reports to be presented. This research will help them understand what an accounting information system is as well as how to follow the process of designing one. The results are expected to be beneficial for further research in wider scope in future.
Impact of Accounting Information Systems on Organizational Performance of Manufacturing Sector
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Jayamina, Y.K.D.; Aruppala, W.D.N.
Accounting information system (IAS) is a system which provides the vital information for planning, organizing, directing, leading and control on the activities of the organization. It is mainly used to gather, store, direct, process, recover and report its financial data as information is an important resource for an organization. The main objective of this study is to identify the impact of Accounting Information Systems on Organizational Performance of Manufacturing Companies in Sri Lanka. Sub objectives are designed to identify the impact of speed of accounting information systems on organizational performance, the impact of work simplification of accounting information systems on organizational performance and the impact of quality information of accounting information systems on organizational performance. All listed manufacturing companies at Colombo Stock Exchange (CSE) are considered as the sample of this study. A self-administered questionnaire is used to collect data. Further data is analyzed using SPSS software in order to obtain quantitative measure of descriptive statics, correlation, and regression use to multiple linear regression analysis. Findings of this study is useful for all users and decision makers of Accounting Information Systems in Manufacturing Companies in Sri Lanka and other organizations.
Impact of Accounting Software on Business Performance of Listed Companies in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Chandrarathne, W.M.U.P.; Aruppala, W.D.N.
In simple terms the nature of a comprehensive accounting software is to computerize the business process and to produce data in real time. At the moment the organizations in the world take different approaches to increase the efficiency and effectiveness in accounting practices. As a solution for that organizations are switching from manual accounting to computerized software and the organization that had switched to computerized accounting had increased the efficiency compared to the companies that use manual accounting. The ultimate objective of this paper is to investigate the impact of accounting software on business performance of Listed Companies in Sri Lanka. For that, this study uses several characteristics which are efficiency, reliability, ease of use, data quality and accuracy as the influence of the use of Accounting Information Systems on the performance of firms. The quantitative data required for this study is a sample size of 150 participants who are currently working as accountants or in any other area that involve the use of an accounting software in their work. The data will be collected through questionnaires and the collected data will be then analyzed by using IBM statistical package of social sciences (SPSS). The findings of past studies reveal that significant impact on business performance through Accounting Information Systems. The findings of this research will help the firm’s decision makers/managers to understand the importance of using an accounting software to achieve the goals and objective of the business. Ultimately, this study will be helpful to better understand the effects of an accounting software for business performance.
Impact of Accounting Software on Business Performance: With special reference to Small & Medium Enterprises at Colombo District.
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Dissanayake, B.H.G.P.M.; Aruppala, W.D.N.
The purpose of this study is to explore the impact of accounting software on the business performance of small and medium enterprises located in Colombo district, Sri Lanka. The study discusses and explores the impact of accounting software use on the performance of small and medium enterprises. The results of this study are intended to assist owners and other relatives of small and medium enterprises to understand the importance of using accounting software derived from accounting software to achieve their performance. Features such as; efficiency, reliability, ease of use and data quality affect the use of accounting software, thereby affecting the performance of small and medium enterprises. Previous researchers have shown that in addition to improving the business operation efficiency and efficiency of companies. It is important to use accounting software to ensure the survival and sustainability of the business in a competitive environment. The population of this study is small and medium scale enterprises located in Colombo district, Sri Lanka. It is expected to select 100 small and medium scale enterprises in the Colombo district as a sample using the Convenience sampling selection criteria. The study type is descriptive and is expected to collect primary data using questionnaires and surveys. Finally, this study will help to better understand the effects of accounting software on business performance.
Impact of Bank Income Diversification on Bank Performance and Stability: Evidence from Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Wijethnuga, D.M.B.P.; Aruppala, W.D.N.
Banks are using revenue diversification as a strategy to improve bank performance and reduce volatility. If diversified activities are less risky and improve the return banks will always try to improve the revenue diversification as much as possible. This study investigates the impact of bank income diversification on bank performance and stability of Sri Lankan commercial banks. Banks are facing huge competition in their industry. Most banks are earning equivalent interest income from lending activities. Thus, banks try to identify new ways to generate income. Otherwise, they must keep a very slight margin from the loans to sustain in the highly competitive market. The main objective of the study is to investigate the impact of income diversification on bank performance and stability of Sri Lankan listed commercial banks. Further strategies to face high competition within commercial banks in Sri Lanka will also be examined. Data used in the analysis consists of 11 local licensed commercial banks that were operating in the sample period 2010-2019. The secondary data are collected from annual audited financial statements and annual reports of each company accessed through the CSE web site. The researcher integrated some control variables into model such as asset size, equity to assets ratio, and the asset growth ratio etc… In this study it is attempted to ascertain that there is no excluded independent variable, which could affect the relationship between income diversification and bank performance and stability. The expected findings of the research would be there will be a negative relationship between bank income diversification and bank performance and stability because the degree of diversification is not at the peak within the Sri Lankan context. The findings of the study will provide useful insights into regulatory bodies, investors, researchers, and bankers.
Impact of Board Structure on Financial Performance - Evidence from Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Medhdhawaththa, P.R.; Aruppala, W.D.N.
Good Corporate Governance Practices are regarded as important to reduce the risk for investors, attracting investment capital and improving the performance of companies. The boards of directors play a critical role in monitoring companies in Sri Lanka. Board structure is important in the commercial banks due to the nature of business and the effect of government regulations, both of which limit to managerial discretion. Main objective of this study to find out the impact of board structure on financial performance. Further the study expects to identify how Board Size, Gender, CEO duality and number of non-executive directors’ components are affecting to the Financial Performance. Financial Performance is measured by accounting base measurements such as Return on Assets (ROA) and Return on Equity (ROE). The relationship between Board Structure and Firm Performances of Twenty- Four (24) Commercial Banks were considered as the sample of this study. The study conducted during the period of 2010 2020. All the data are collected from annual reports of each bank and data are analyzed by using Descriptive statistics, Pearson Correlation and Regression Analysis. The results indicate that Boards Size and Number of Non-Executive Directors has a significant positive impact on Financial Performance. Conversely, CEO Duality and Female Directors do not have a significant impact on Financial Performance. Further results of the study add insights on the relation between monitoring mechanisms and financial performance of commercial banks in an emerging market.
Impact of Competitive Ability on Financial Performance of Sri Lankan Banks
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Maduranga, B.I.C.; Aruppala, W.D.N.
This research analyses the impact of competitive ability on financial performance of listed banks in Sri Lanka. Capital delivers a buffer against losses and thus it ensures safety and soundness of the financial institutions. It is initial requirement for any financial institution to maintain sufficient capital. Liquidity is a main concept that most of investors are not properly maintained and result of that financial plans could be fail to come through such critical time. Liquidity causes more financial issues than rest of factors. The study relied on secondary data and thus annual reports of the listed banks were used to acquiring data. Ratios were used to analyze the data and regression analysis was used to measure relationship of the variables. The main finding in the study is that capital adequacy and liquidity has contributes positively & negatively on financial performance of listed banks in Sri Lanka. The findings of this study is useful for make productive decisions on investing in Sri Lankan banks.
Impact of computerized accounting systems on quality of financial reporting in Small and Medium Enterprises (SMEs) in Galle District, Sri Lanka.
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Bhashana, N.V.P.; Aruppala, W.D.N.
The research examined the impact of computerized accounting systems on the quality of financial reporting in SMEs located in the Galle District Sri Lanka. Identify how computerized accounting systems enhance the caliber of financial reporting is the main goal of this study. With a qualitative methodology and qualitative data, a correlational design was adopted. Previous studies found that there is a favorable correlation between computerized accounting software systems and quality of the financial reporting and that these systems assure the effectiveness of the quality of financial reporting. The characteristics of computerized accounting software, such as transaction processing, report preparation, system security, comparability, timeliness, understandability, verifiability, and reliability, are further examined in this study in relation to the high quality of financial reporting SMEs in the Galle District. Thus, the research examines the variables influencing CAS adoption in Sri Lankan SMEs. The literature states that the numerous elements were recognized and generally categorized into many groups. In the Galle District of Sri Lanka, 120 SMEs representing the manufacturing, trading, and service sectors provided information. Using a census and simple random sampling, a sample of 120 people was taken from a total population of 3173 SMEs. Data was gathered using a questionnaire, and 85.6% of those who responded were sufficiently representative of the entire population Punch (2003). The study expects to provide evidence on the influence of accounting information systems on the quality of financial reporting by SMEs. These findings will become important insights for the decision makers in SME sector in order to strengthen the adoption of accounting information systems.