ABSTRACT
This study was carried
out to examine the effect of accounting information system on the financial
performance in an organization. To achieve this ultimate goal, the study
revealed that: In table 2 shows that 25
of the respondents representing 83% indicated “Yes” that accounting information
system increase profitability in Zenith bank, Wukari while (17%) respondents pointed
“No Idea” on the question and it was discovered that accounting information
system increase profitability in Zenith bank, Wukari.
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Accounting Information Systems (AISs)
are a tool which, when incorporated into the field of Information and
Technology systems, are designed to help in the management and control of
topics related to organization’ economic-financial area. But the stunning
advance in technology has opened up the possibility of generating and using
accounting information from a strategic viewpoint (El Louadi, 1998). Accounting
Information System (AIS) is vital to all organizations (Borthick and Clark,
1990; Curtis, 1995; Rahman et al., 1988; Wilkinson, 1993; Wilkinson et al.,
2000) and perhaps, each organization either profit or non profit-oriented need
to maintain the AISs (Wilkinson, 2000: 3-4). On the other hand, an AIS is the
whole of the related components that are put together to collect information,
raw data or ordinary data and transform them into financial data for the
purpose of reporting them to decision makers (LI, M., YE, L.R. 1999).To better
understand the term ‘Accounting Information System’, the three words constitute
AIS would be elaborated separately. Firstly, literature documented that
accounting could be identified into three components, namely information
system, “language of business” and source of financial information (Wilkinson,
1993: 6-7). Secondly, information is a valuable data processing that provides a
basis for making decisions, taking action and fulfilling legal obligation.
Finally, system is an integrated entity, where the framework is focused on a
set of objectives (Watts, 1999).
Accounting literature argues that
strategic success is considered an outcome of Accounting Information Systems
(AIS) design (Langfield-Smith, 1997). Several, studies have analyzed the impact
of AIS in strategic management, examining the attributes of AIS under different
strategic priorities (Ittner and Larcker, 1997; Bouwens and Abernethy, 2000).
It has also been analyzing the effect on performance of the interaction between
certain types of strategies and different design of AIS (e.g. different
techniques and information). The appropriate design of AIS supports business
strategies in ways that increasing the organizational performance (Chenhall,
2003). Increasing AIS investment will be the leverage for achieving a stronger,
more flexiblecorporate culture to face persistent changes in the environment.
Innovation is the incentive with which a virtuous circle will be put in place,
leading to better firm performance and a reduction in the financial and
organizational obstacles, while making it possible to access capital markets.
AIS are systems used to record the financial transactions of a business or
organization. AIS combines the methodologies, controls and accounting
techniques with the technology of the IT industry to track transactions,
provide internal reporting data, external reporting data, financial statements,
and trend analysis capabilities to affect on organizational performance (GUL,
F.A. 1991).
In managing an organization and
implementing an internal control system the impact of accounting information
system (AIS) is crucial. An important question in the field of accounting and
management decision-making concerns the fit of AIS with organizational
requirements for information communication and control (Nicolaou, 2000).
Benefits of accounting information system can be evaluated by its impacts on
improvement of decision-making process, quality of accounting information,
performance evaluation, internal controls and facilitating company’s
transactions (Bolon, 1998).
1.2 STATEMENT OF THE PROBLEM
Currently, most organizations continue
to increase spending on information system and their budgets continue to rise.
Moreover, economic conditions and competition create pressures about costs of
information. Generally, information system is developed using information
technology to aid an individual in performing their job. Therefore, most
organizations focus on developing information system in order to support
decision system, communication, knowledge management, as well as many others.
The key part of information system needed for decision making in organization
is accounting information system.
Today, information technology and an
increasingly transparent financial sector have become key driving forces in
business operations, strategies, structures, ownership, and performance. These
forces cut across many industries to force changes that, in turn, have had
significant economic and social impacts on the organizational effectiveness
(Doms, Jarmin and Klimek, 2004). Structurally, the emerging information technology
industry is uncharacteristic of typical a traditional process which has
gradually grown out of the need to increase efficiency and cut on operations
costs in the industry. Therefore,this study seeks to examine the effectiveness
of accounting information system in the performance of profit making
organization.
1.3
OBJECTIVES
OF THE STUDY
The
objectives of the study are to find out the following:
1. To examine the impact of accounting
information systems on the effectivenessof performance in an organization.
2. To determine whether accounting
information system enhance the effective decision making in Zenith bank,Wukari.
3. To determine whether accounting
information system increase profitability of an organization.
4. To find out the problems confronting Zenith
bank, Wukari in maintaining effective accounting system.
i)
To make useful recommendations based on
research findings.
1.4 RESEARCH QUESTIONS
The following research questions were
formulated to guide this study:
1. Does accounting information system
increase profitability in Zenith bank?
2. What are the impacts of accounting
information systems on the effectivenessof performance in an organization?
3. Does accounting information system
enhance effective decision making in Zenith bank,Wukari?
4. Are there any problems confronting Zenith
bank, Wukari in designing effective accounting system?
1.5 RESEARCH HYPOTHESES
The following research hypotheses were
formulated to guide this research:
Hypothesis 1
H0: There is no significant relationship
between accounting information system and increase profitability in Zenith bank.
H1: There is a significant relationship
between accounting information system and increase profitability in Zenith bank.
Hypothesis 2
H0: There is no significant relationship
between the impacts of accounting information systems and the effectivenessof
performance in an organization.
H1: There is a significant relationship
between the impacts of accounting information systems and the effectivenessof
performance in an organization.
1.6 SIGNIFICANCE OF THE STUDY
The study is of key significance to Zenith
bank as well as other firms in the same sector in terms of determining the
benefits accruing due to the integration of accounting information systems in
their operations. This enabled insurance firms in gauging the model in terms of
enhancing organizational effectiveness. The study is useful to other
researchers interested in the problem under investigation as the study has laid
a platform on which further studies related to the subject can be undertaken.
The study would provide a theoretical
basis about accounting information system successful adoption dimension to
firms. It would provide practical guidance for accounting information systems
implementation in other areas and it would also provide empirical and practical
contributions for organization in effectively applying accounting information
system in their operations.
Accounting information systems provide
information about the financial resources, obligations, and activities of an
enterprise that is intended for use primarily by external decision makers –
investors and creditors. This study provides useful information in making
investment and credit decisions.
1.7 SCOPE OF THE STUDY
The study concerns abouteffective
accounting information system an imperative for profit performance with a
particular reference to Zenith bank, Wukari.
1.8 LIMITATION OF THE STUDY
The
limitation of this study was inability of management to divulge certain
information which they consider sensitive and fear of publication which might
be detrimental to their operation.
Also,
the outright inability of some respondents to complete and return the
questionnaire to the researcher is one of the limitations of the study.
Another
limitation to the study was traffic congestion for the researcher to meet them
in their offices and for possible return of the questionnaire.
Finally,
the researcher observed the non-cooperative attitude of some workers of the
company to make information available for her.
1.9 DEFINITION OF TERMS AND ACRONYMS
a) ACCOUNTING: This
is defined as the process of identifying, measuring, and communicating economic
information to permit informed judgements and decisions by users of the information
(Frank Wood & A. Sangster, 2005).
b) ACCOUNTING INFORMATION SYSTEM:Accounting
Information System is defined as is a computer based system that increases the
control and enhances the cooperation in the organization (Nicoloau, 2000).
c) INSURANCE: It
is social way of providing financial compensation for the effects of
misfortune, the payments being made from the accumulated contribution of all
parties participating in the scheme.
d) PROFIT: This
is a sum in which the business made after the deduction of all the expenses and
it can be withdrawn from a business while maintaining the capital that existed
at the beginning of the business.
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Item Type: Project Material | Size: 58 pages | Chapters: 1-5
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