AN EMPIRICAL ANALYSIS OF THE VALUE OF ACCOUNTING INFORMATION SYSTEM IN AN ORGANIZATION

Project TopicsAN EMPIRICAL ANALYSIS OF THE VALUE OF ACCOUNTING INFORMATION SYSTEM IN AN ORGANIZATION

AN EMPIRICAL ANALYSIS
OF THE VALUE OF ACCOUNTING INFORMATION SYSTEM IN AN ORGANIZATION

 

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND
TO THE STUDY

Accounting
information system has become an important component of successful business and
organizations. Borthick and Clara, (1990) supporting the above, stated that
accounting information system is vital to all organizations either profit or
non-profit oriented. They further opined that there is need for every organization
to maintain accounting information system. In the opinion of Wathana, (2004), accounting
information system produces more information to ease operations such as
planning and control information and performance evaluation. An understanding
of Accounting Information System will therefore foster a better understanding
of how businesses and organizations are assisted to operate more efficiently
and effectively. Accounting information system has to do with any combination
of information technology and peoples’ activities that support accounting operations,
management and decision making, though in a narrow sense. In a broader sense
however, the term accounting information system is used to refer to the
interaction between people, processes, data and technology that are used for
accounting duties. It is equally in this wise that O’Brien, (2003) asserted
that, the term do not only refer to information and communication technology
that an organization uses but also to the way in which people interact with
this technology in support of  business activities
and processes. Furthermore, accounting information system may be understood
from the three words that constitute it (Accounting, Information and System).
Wilkinson, (1993) identified three components that relate to accounting as;
Information System, Language of Business and Source of Financial Information.
Secondly, O’Brien identified information as a valuable data processing that
provides a basis for making decisions, taking actions and fulfilling legal
obligations. Finally, he stressed that a system is an integrated framework
within an entity where the framework is focused on a set objectives. Combining
the three, Accounting Information System indicates an integrated framework
within an entity (such as business entity) that employs physical resources
(material, supplies, personnel, equipment, funds) to transform economic data
into financial information for conducting the firms’ operations and activities,
and providing information concerning the entity to a variety of interested users
(O’Brien, 1993). Thomas and Kleiner, (1995) concluded that the combination or
interaction between human, technology and techniques knowledge effectively. This
research seeks to conduct an empirical analysis of accounting information
system in organizations and examine its values in organizational activities and
processes.

1.2   STATEMENT
OF THE PROBLEM

Existing
literature have shown that accounting information system when successfully
implemented brings about better decision making by managers, more effective
internal control systems, enhances the quality of financial reports and facilitates
financial transaction processes (Wathana, 2010). However the studies have not
shown whether successful implementation of accounting information system can
improve performance measures thereby creating a research gap. Moreover the
studies have shown a situation or situations rather in Spanish Enterprises,
Chinese Enterprises, Indian Firms etc where economies are well developed. The
researchers therefore seeks to bridge the gap so created in the field of
accounting information system and also determine whether the values of
accounting information system identified in earlier studies are applicable to
Nigerian situation, a less developed economy.

1.3   OBJECTIVES OF THE STUDY

The
following are the objectives of this study:

1.  To
examine the effect of accounting information system on financial transaction
process.

2.  To
examine the effect of accounting information system on the quality of financial
reports.

3.  To
determine whether accounting information system leads to effective internal
control systems.

1.4   RESEARCH QUESTIONS

1.  What
is the effect of accounting information system on financial transaction
process?

2.  What
is the effect of accounting information system on the quality of financial reports?

3.  Does
accounting information system leads to effective internal control systems?

1.5   HYPOTHESIS

HO:
Accounting Information System does not facilitate financial transaction process

HA:
Accounting Information System does facilitate financial transaction process

1.6   SIGNIFICANCE OF THE STUDY

This
study shall be of immense importance to users of accounting information system
such as financial analysis, Financial Accountants, management Accountants,
Finance Managers, the Finance General Managers, Chief Operating Officer,
Managing Director and Board of Directors within an organization and the Government
Agency, External Auditors and Creditors from outside the organization. This
will enable them have effective combination of people, Hardware, software,
communication network and data resources that collects, transform and
disseminate information in an organization hence the emphasis on computer based
accounting information system. More so, the study shall be of great importance
to students of Accounting and Management as well as other researchers who may
be acquainted with the basis of Accounting Information System, its operations
and its support for business activities and processes and hence a guide for
further investigations.

1.7   SCOPE/LIMITATIONS OF THE STUDY

This
research work is however limited to accounting information system (AIS) as a
specialized area in business and non-business applications. Emphasis is more
placed on the empirical evidence that exist in the field.

REFERENCES

Borthick,
C.J. and Clara, K.D. (1990): “Exploration for the relationship between
Innovation, IT and Performance”, Journal of Intellectual Capital, vol. 6, n. 2:
237-252.

Wathana,
M. (2004): “Firm performance and AIS alignment in Malaysian SME ́s”, International
Journal of Accounting Information Systems, vol. 6, n.4: 241-259.

O’Brien,
H. (2003):“Impact of the length of relationships upon the use of Research Institutes
by SMEs”, Research Policy, vol. 32, n. 5: 771-788.

Wilkinson,
A.(1993):“Representing change: a system model of organizational inertia and
capabilities as dynamic accumulation processes”, Simulation Modelling: Practice
and theory, vol. 10, n.5-7: 271-296.

Kleiner,
L.R. (1999): “Information technology and firm performance: Linking with environmental,
strategic and managerial contexts”, Information and Management, vol. 35, n. 1:
43-51.