Computer Application in Accounting; A Case Study of the Computerized Ledger System of Nigerian Bottling Company Plc Onitsha Plant
Chapter One
Objectives of the Study
Main Objectives
The study aimed to assess the impact of computerized accounting systems (CAS) on the performance of accounting by focusing on the Nigerian Bottling Company PLC. Onitsha plant as a case study.
Specific Objectives
- To assess the extent of the adoption of CAS in accounting practice in NBC Onitsha
- To assess the performance of accounting after the adoption of CAS
- To identify the effect of the adoption of CAS in accounting practice
- To identify challenges facing the adoption of CAS in accounting practice
CHAPTER TWO
LITERATURE REVIEW
Theoretical Literature Review
Many theories have been developed to study the issue of adoption of Computerized Accounting Systems (CAS) as an Information Technology (IT) which include, (Davis, 1989) the technology acceptance model (TAM) Roger’s (1995) Diffusion of Innovation (DoI) or Innovation Diffusion Theory (IDT) and the unified technology acceptance user theory (UTAUT) (Venkatesh, et al 2003).
Technology Acceptance Model
The Technology Acceptance Model (TAM) is an information systems theory that models how users come to accept and use a technology. The model suggests that when users are presented with a new technology, two specific factors influence their decision about how and when they will use it. The two factors are; perceived usefulness (PU), and perceived ease-of-use (PEOU) (Davis, 1989).
TAM has proven to be a useful theoretical model in helping to understand and explain use behavior in the information system implementation. It has been tested in many empirical researches and the tools used with the model have proven to be of quality and to yield statistically reliable results. However, parsimony has been one of TAM’s strengths but also major weakness as it is has limited use in explaining users’ behavior.
As a result of the shortcomings, many authors have extended TAM with additional constructs. Mbogo (2010) for instance, employed TAM and extended it to include other factors such as perceived ease of accessibility, perceived low cost, perceived security, perceived convenience, perceived satisfaction and perceived support to investigate the success factors attributable to use of CAS.
Tobbin (2011) modeled adaptation of CAS expanding TAM and DoI to investigate the consumer behavior towards CAS adaptation in Ghana. Similarly, Bosire (2012) adapted DoI alongside TAM to explain factors which contributed to success of adaptation of new technologies. Similarly, Odia (2012) applied TAM with additional factors such as perceived trust, security, and perceived convenience.
Diffusion of Innovation Theory
Another theory that has been used to describe acceptance of information systems is Rogers’ (1983) Diffusion of Innovation (DoI) or the Innovation Diffusion Theory (IDT). Innovation is defined as an idea, practice or object (Rogers, 1995). DoI includes five significant innovation characteristics: relative advantage, compatibility, complexity, trialability and observability.
Relative advantage is defined as the degree to which the innovation is considered as being better than the existing method of performing the same task. It is suggested in the theory that relative advantage has a positive influence on behavior intention. Compatibility is defined as the degree to which adopting the innovation is compatible with what people do, existing values, experiences, and needs.
CHAPTER THREE
RESEARCH METHODOLOGY
Research Approach
This study was guided by the positivist research approach. The positivist research approach is characterized by off testing of hypothesis developed from existing theory (theory testing) through measurement of variables. The positivist research approach presumes that knowledge is valid only if it is based on observations of the external reality (Flowers, 2008).
Research Population/Area of the Study
According to Kothari (2006), the term population connotes an entire group of individuals, events or objects that have a common observable characteristic. It refers to all elements that meet certain criteria for inclusion in a given universe. The population of this study comprised of members of staff of NBC Onitsha in their Accounting Departments.
CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND DISCUSSIONS
Age profile of respondents
The researcher analyzed the age profile of respondents and feedback was documented as shown in the table and figure below;
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
Discussion of major findings from the Study
The use of a computerized accounting system on performance of accounting
The study showed that the NBC Onitsha (case study) actually make use of a computerized accounting system. This is evidenced by the results given by the respondents in agreement with the use of the system in the NBC Onitsha. Where the uses of a computerized accounting system are; the system’s ability to perform data entry, data processing, data security and data reproduction or reporting such as the generation of financial statements, water billing, payroll report. All these functions of the system have enabled the NBC Onitsha to run its operations smoothly in a much more effective and efficient manner.
To establish the qualities of payroll reports generated by a computerized accounting system.
From the findings, payroll reports generated through computerized accounting are mainly consistent, reliable and material among other qualities. These most prominent qualities of financial reports generated through computerized accounting make the system much more unique to the manual accounting system especially where accuracy in payroll calculations and reliability in reporting count. It is one of the strongholds as to why most of the respondents prefer a computerized accounting system to the manual accounting system. With this in mind, it is worth to recommend a computerized accounting system for business operations especially in of the financial nature as compared to the outdated manual accounting system.
Overall Findings
From the findings summarized above, it indicate that adoption of CAS in accounting practices has both, positive and negative impacts. The positive impacts include; simplification of payroll processing, timely preparation of payroll, accuracy of payroll and traceability of payroll deductions. The negative impacts include; risk of fraud and requirement of additional training for users and additional costs.
Recommendations
- From the findings and summary, the researcher recommends that first and fore most, the NBC Onitsha needs to acquire a computerized accounting system that suits the organizational needs, enough resources needed to be saved for a tailor made software and system analyst need to be consulted in this important
- There should also be routine system maintenance programs put in place so that the system can get rid of shortfall such as viruses, fraud among others that may affect the system operations, this should be done so that the system can operate to the expectation of management and other
- On the management point of view, it is important that staff for handling transactions are trained so as to improve on the accuracy and speed in posting. With increased improvements and versions of accounting packages, staff needs constant and continuous training by the authorized dealers of the packages so that they remain well acquainted with the knowledge and experience of the package. In addition to the training, it is important to constantly appraise the staff to check which staff is failing the system as regards reporting unbiased financial
- The NBC Onitsha needs more internal audit reviews to appraise and check the strength of the instituted controls within the system. The computerized accounting system is prone to fraud in cases where physical cash is involved. Without internal audit reviews, there may arise cases of ghost workers fraud that may pass unnoticed. It is therefore important external auditors come in once in a while to do
- Thereis a need to increase the security levels in the internal control
- Management needs to ensure that requisitions are authorized; cheque payment, vouchers and other source documents are approved. On recording, it is important to have a clerk to enter the data which is then updated yet by another person preferably one with more experience and expertise. Management can also consider the option of using a networked system linking all the system in the finance , accounting and Human Resources department. This is because the current system uses standalone personal computers. In this way, errors and fraud possibilities are minimized thus improving on the quality of financial reports.
- The accounting staff should rotate regularly in different accounting section by doing so it will be difficult for person to be tempted to commit frauds by using the knowledge and experiences he / she has in a specific section
- Although there is accuracy and speed in transmitting information concerning payroll between other departments and payroll section the management should keep updating with new information
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