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1.1 BACKGROUND TO THE STUDY
Accounting project or 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 notonly 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 FinanciaI 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:
- To examine the effect of accounting information system on financial transaction process.
- To examine the effect of accounting information system on the quality of financial reports.
- To determine whether accounting information system leads to effective internal control systems.
1.4 RESEARCH QUESTIONS
- What is the effect of accounting information system on financial transaction process?
- What is the effect of accounting information system on the quality of financial reports?
- Does accounting information system leads to effective internal control systems?
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.
Borthick, C.J. andClara, K.D. (1990): “Exploration for the relationship between Innovation, ITand Performance”,Journal of Intellectual Capital, vol. 6, n. 2: 237-252.
Wathana, M. (2004): “Firm performance and AIS alignment in MalaysianSME Ìs”,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.
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