ABSTRACT
This research project investigated the impact of accounting
information system on the performance of manufacturing companies in Port Harcourt,
Nigeria. In order to achieve the objectives of the study, two hypotheses were
formulated and data collected through the issue 91 structured questionnaires to
accounting staff of 22 manufacturing companies. data collected was analysed
using Pearson Coefficient of Correlation. our findings showed that: The study
showed that there is a positive and significant relationship between the
implementation of accounting information systems and the profitability of
manufacturing companies. The study also showed that there is a positive and
significant relationship between the implementation of accounting information
systems and the productivity of manufacturing companies. Given our findings, we
conclude that: The implementation of adequate accounting information induces
profitability in manufacturing companies. We also conclude that the
implementation of adequate accounting information systems is a productivity
driver in manufacturing companies. Given our findings and conclusions, we make
the following recommendations: Manufacturing companies should continue to
implement and upgrade their accounting information systems in order to continue
to drive profitability of manufacturing companies should provide adequate
training in the proper implementation and use of accounting information systems
64 Pages
Project Reference Code:
C037
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
In
recent years the advancement in information system modules all over the world
has made business organisations to exert resources in this area if they are to
compete favourably among their local and foreign counterparts. Gone were the
days when business organisations were simply required to make profit, survive
and provide a fair return to investors’ on their interest. The modern business
organisations find itself in the atmosphere of global uncertainties, cut throat
competition locally and internationally and unprecedented change in the
economy.
Hence, a great demand is often placed on the
managers of these organisations to make pragmatic and informed decisions if the
organisation is to move forward as the success or otherwise of any organisation
is often a function of the sum of the decisions taken in the past. However, the
quality of decisions taken by managers rests upon the substance and accuracy of
information provided by systems available to them.
An
accounting system is one of the most effective decision making tools of
management as it provides an orderly method of gathering and organising
information about the various business transactions so that it may be used as
an aid to management in operating the business (Copeland and Dascher, 1978).
Accounting information also may help managers understand their tasks more
clearly and reduce uncertainty before making their decisions (Chong, 1996).
Thus, Accounting Information system is vital to all organisations and perhaps,
every organisation either profit or non profit oriented need to maintain an
Accounting Information System as no organisation is exempted from decision
making in their operations.
As we all know, accounting speaks
the language of business as it records all transactions of an individual firm
or other bodies that can be expressed in monetary terms. Predicated on the
going concept, accounting is the scheme and art of collecting, classifying,
summarizing and communicating data of financial nature required to make
economic decisions. Accounting information is an ingredient in most, if not
all, financial managerial decisions. In developed economies, these decisions
are worth billions of dollars each year. In some cases, the decisions are
lacking in quality. Consequently, if researches can improve decision making
through improved information, society will benefit.
Accounting system, in recent times,
has tended to be a system of information that does not stop at limits of data
and financial information, but also it includes data and descriptive and
quantitative information which is useful in decision making for users distinct
with plurality and diversity. Such users include current and potential
investors, lenders, suppliers, creditors, customers, governments and the public
in addition to the administration, which is its responsibility to prepare the
accounting programs and displaying it, that information must be capable of
achieving the goal that it has been prepared for. Hence the role of Accounting
Information System for effective decision making cannot be over emphasized.
It is noteworthy to say here that
Accounting Information System derives its source from accounting data.
Accounting Information Systems produce results which enhances decision making.
Hence, it can safely be concluded that Accounting Information System is not an
end in itself but a means to an end i.e. decision making to improve corporate
performance. Accounting Information System produces detailed and comprehensible
accounting information which are invaluable basis for decision making.
1.2 STATEMENT OF RESEARCH PROBLEM
Currently, the world and human life
has been transformed from information age to a knowledge age (Curtis, 1995),
and knowledge has been recognised as the most valuable asset. In fact,
knowledge is not impersonal like money and does not reside in a book, a data
bank or a software program (Choe, 1996). Choe believed that knowledge is always
embodied in a person, taught and learned by a person, used or misused by a
person. Accounting information is an unbiased tool for an effective
administration.
As we all know, accounting speaks
the language of business as it records all transactions of an individual firm
or other bodies that can be expressed in monetary terms. Predicated on the
going concept, accounting is the scheme and art of collecting, classifying,
summarizing and communicating data of financial nature required to make
economic decisions. Accounting information is an ingredient in most, if not
all, financial managerial decisions. In developed economies, these decisions
are worth billions of dollars each year. In some cases, the decisions are
lacking in quality. Consequently, if researches can improve decision making
through improved information, society will benefit.
Poor
accounting information jeopardizes administrative effectiveness, which makes
managers malnourished administratively especially in Nigerian construction
industry. The consequence of this has been the current distressed syndrome that
Nigerian construction industries are facing. Huber (1999) stressed that
companies must learn to manage their intellectual assets (i.e. knowledge) in
order to survive and compete in the ‘knowledge society’. Indeed, knowledge
management is concerned with the exploitation and development of the knowledge
assets (Chang, 2001).
It
is on these premises that the study wishes to examine the effect of quality of
accounting information on the organization performance with special reference
to selected manufacturing companies in Port Harcourt.
1.3
PURPOSE
OF THE STUDY
1.4 STATEMENT OF RESEARCH QUESTION
1.5
RESEARCH
HYPOTHESES
1.6 SIGNIFICANCE OF THE STUDY
1.7 SCOPE AND LIMITATION OF STUDY
1.8 ORGANIZATION OF STUDY
CHAPTER
TWO
REVIEW
OF RELEVANT LITERATURE
2.1 THEORETICAL FRAMEWORK
2.1.1
Contingency Theory
2.1.2
Agency Theory
2.1.3
Behavioural Theory
2.2 CONCEPTUAL FRAMEWORK
The
conceptual framework will be divided into two parts. The first part examines
the concept and usefulness of Accounting Information System in organisations in
the eyes of various scholars. The second part examines the value relevance of
Accounting Information in assisting investors’ investment decisions. Accounting
Information System is considered as a subsystem of Management Information
System (MIS).
Regarding
accounting as information system is perhaps the latest definition of
Accounting. For the first time in 1966 the Statement of Basic Accounting
Theory, published by the American Institute of Certified Accountant (AICPA)
stated that “Accounting actually is information system and if we be more
precise accounting is the practice of general theories of information in the
field of effective economic activity and consists of a major part of the
information which is presented in the quantitative form”.
In
the above accounting is part of general information system of an economic
entity. Hence accounting information systems could be described as systems used
to record the financial transactions of a business or organization. These
system combine 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 (Grande, Estebanez and
Colomina, 2010).
In
the words of Boocholdt (1999), Accounting Information Systems can be defined as
systems that operate functions of data gathering, processing, categorizing and
reporting financial events with the aim of providing relevant information for
the purpose of score keeping, attention directing and decision-making.
Accounting Information System, according to Nicoloau (2000), is a computer
based system that increases the control and enhances the cooperation in the
organisation. Management is engaged with different types of activities that are
requires quality and reliable information. They require also non-financial
information such as production statistics, quality of production and so on.
However, quality of information generated from AIS is very important for management.
Kim
(1989), argues that usage of AIS depends on the perception of the quality of
information by the users. Generally the quality of information depends on the
reliability, form of reporting, timeliness and relevance to the decisions.
Effectiveness of Accounting Information System also depends on the perception
of decision makers on the usefulness of information generated by the system to
satisfy informational needs for operation processes, managerial reports,
budgeting and control within the organisation. Some research indicate that the
effectiveness of Accounting Information Systems depend on the quality of output
information that satisfy the users (Cameron, 1986; Lewin and Minton, 1986;
Quinn and Rohrbaugh, 1983; Delone and Mclean, 1992 and Kim, 1989).
Accounting
Information Systems are considered important organizational mechanisms that are
critical for effectiveness in decision management and control in organizations.
(Galbraith, 1983; Zimmerman, 1995). Accounting Information Systems will be
useful when information provided by them is used effectively in decision making
process by the users. Otley (1980) argues that accounting systems are an
important part of the fabric of organizational life and the need to be
evaluated in their wider managerial, organizational and environmental context.
Therefore the effectiveness of accounting information systems not only depends
on the purposes of such systems but also depends on contingency factors of each
organization.
Accounting
information systems are said to be effective when the information provided by
them serves widely the requirements of the system users. Effective systems
should systematically provide information which has a potential effective on
decision making process (Ivest et.al, 1983). The effectiveness of accounting
information systems has long been a subject of many research, (Chong, 1996,
Chenhall and Moriss, 1986, Kim, 19988, Mia and Chenhall 1994).
2.3 REVIEW OF RELEVANT EMPIRICAL LITERATURE
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.0
INTRODUCTION
This chapter show how the study was carried out, the
procedure and methods employed in the conduct of this discussed under the
following headings:
·
Research design
·
Population for
study
·
Sample and
sampling technique
·
Natural/scope of
data (primary and secondary)
·
Method of data
collections
·
Method of data
analysis
·
Validity/reliability
of instrument
3.1 RESEARCH
DESIGN
Nachmias and Wachmias (1976) defined
research design as a “model of proof that allow the researcher to draw
inference concerning casual relations among the variable under investigation”.
Basically, they are two (2) types of research design, the experimental and
quasi-experimental research design.
3.2
POPULATION FOR THE STUDY
3.3 SAMPLE AND SAMPLING TECHNIQUE
3.4.
NATURE/SCOPE OF DATA
3.4.1
Primary Source
3.4.2
Secondary Source
3.4.3
Questionnaire design
3.5
METHOD OF DATA COLLECTION
3.6 METHODS OF DATA ANALYSIS
3.7
VALIDITY RELIABILITY OF INSTRUMENT
3.7.1
RELIABILITY OF INSTRUMENT
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1. INTRODUCTION
This segment of the research focuses on the presentation, analyses and
interpretation of the various responses to the questionnaires distributed.
Pearson Correlation Coefficient will be used in the test of hypothesis as
stated in chapter three while tables and simple percentages will be used to
explore the characteristics of the responses to the questionnaires issued.
4.2. DATA ANALYSIS AND INTERPRETATION
RESEARCH QUESTIONS
4.3.
TESTING OF HYPOTHESIS.
4.3.1.
TESTING OF HYPOTHESES
4.4 DISCUSSION OF FINDINGS
CHAPTER
FIVE
SUMMARY
CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
This research project investigated the
effect accounting information system on the profitability and productivity of
manufacturing companies in Port Harcourt, Nigeria. In the course of the
research, follwong findings were made:
·
The study showed that there is a
positive and significant relationship between the implementation of accounting
information systems and the profitability of manufacturing companies in Port
Harcourt. This result implies that the implementation and use of accounting
information systems induces increased profitability in manufacturing companies.
It also implies that accounting information system can be relied on to explain
the profitability of manufacturing companies.
·
The study also showed that there is a
positive and significant relationship between the implementation of accounting
information systems and the productivity of manufacturing companies. The
implication of this finding is that as manufacturing companies implement and
use accounting information systems, their productivity is bound to increase.
5.2 CONCLUSIONS
5.3 RECOMMENDATIONS
BIBLIOGRAPHY
Alsharayri,
M. (2013). Evaluating the performance of Accounting Information Systems in
Jordanian Private Hospitals. Journal of Social Sciences 8 (1), 74-78.
American
Institute of certified public accountants, (2006). Statements of Basic
Accounting Theory. New York: AICPA publication, 1966.
Barth,
M. E., W.H. Beaver and W. R. Landsman (2001). The Relevance of Value Relevance
Literature for Financial Accounting Standard Setter: Another View. Journal of
Accounting and Economics, 31(1-3), 77 – 104
.
.
Quinn,
R. and Rohrbaugh, J. (2006). A Spatial Model of Effectiveness Criteria: Towards
a competing Values Approach to Organisational Analysis. Management Science, 29,
77-91.
Romney
et al., (2003). Accounting Information Systems (9th ed.). New Jersey: Pearson
Prentice Hall.
Wilkinson,
J. W. (1993). Accounting Information Systems: Essential Concepts and
Applications. (2nd ed.). New York: John Wiley & Sons Inc.
Zimmerman,
J. (1997). Accounting for Decision making and control. Boston:
Irwin/McGrawHill.
Project
Reference Code: C037
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