A Conceptual Study On The Impact Of Accounting Information Quality, Internal Control Effectiveness, And Managerial Financial Literacy On The Performance Of Smes In China

Abstract

This conceptual paper proposes an integrated framework to examine the impact of internal organizational capabilities—namely accounting information quality (AIQ), internal control effectiveness (ICE), and managerial financial literacy (MFL)—on the organizational performance of small and medium-sized enterprises (SMEs) in China. Despite the critical economic role played by SMEs, many continue to face persistent challenges related to inefficiency, weak governance, and limited financial resilience. Existing literature has largely overlooked the influence of internal factors, particularly in the Chinese SME context. Grounded in the Resource-Based View (RBV) and Agency Theory, this study positions AIQ, ICE, and MFL as strategic intangible assets and governance mechanisms that can enhance SME performance. The proposed framework addresses current gaps by conceptualizing direct relationships between these variables and organizational outcomes, offering a novel lens for understanding SME performance dynamics. This paper contributes to academic theory while providing practical insights for policymakers, financial educators, and SME practitioners. Directions for future empirical validation and potential policy applications are also discussed.