<p>This study examines the effects of green accounting practices and environmental regulatory compliance on the financial performance of small and medium-sized enterprises (SMEs). Drawing on the Natural Resource-Based View (NRBV), the research investigates whether regulatory compliance influences financial performance directly and whether it encourages the adoption of green accounting practices. The hypothesized relationships were tested on the basis of survey data collected on 329 SME employees in Ghana using partial least squares structural equation modelling (PLS-SEM). The findings indicate that environmental regulatory compliance positively and significantly affects financial performance, implying that compliance positively influences organisational legitimacy, regulatory risk minimisation, and the already existing stakeholder confidence. Nevertheless, compliance with the regulations does not have an important role in the adoption of the green accounting practices. Conversely, green accounting performance has a high positive response to financial performance, which is that strategic environmental accounting enhances efficiency in resources, cost controls, and strategies. These results indicate that regulatory compliance plays a role in performance via an external-based legitimacy-based pathway, and green accounting practices based on value-generating internal ability development. The research adds to the literature of sustainability accounting in that it presents empirical data of SMEs in a developing economy and points out the need to enhance managerial capacity in combination with regulatory frameworks to facilitate effective implementation of environmental accounting practices.</p>