The Role of Cognitive Ease in the Utilization and Preparation of Accounting Information in SMEs

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in Indonesia’s
economy, particularly in job creation and reducing unemployment. Despite their
significant contribution, MSMEs face a persistent challenge in the limited preparation of
financial reports, which hampers their ability to assess and ensure financial performance
with certainty. Addressing this issue, this study investigates the influence of cognitive
ease—conceptualized through repeated experience and avoidance of cognitive strain—
on the utilization and preparation of accounting information by MSMEs. The research
focuses on 400 MSMEs in Mataram City, employing the Partial Least Square (PLS)
method with SmartPLS 4.0 for data analysis. The findings reveal that repeated
experience exerts a significant positive effect on both the utilization and preparation of
accounting information. In contrast, the avoidance of cognitive strain does not
significantly impact the utilization of accounting information but demonstrates a
significant negative effect on its preparation. These results underscore the critical role of
repeated experience in improving MSMEs’ accounting practices, suggesting that
consistent engagement with accounting processes enhances their effectiveness. The
study highlights the need for targeted interventions to bolster cognitive familiarity with
accounting tasks, paving the way for more reliable financial reporting among MSMEs.