ABSTRACT
This
research project investigated the effect of Computerized Accounting System on
the Performance of Manufacturing Firms in Nigeria. In order to achieve it
objectives, the research proposed two hypotheses and data collected through the
issue of fifty (50) structured questionnaires to manufacturing companies quoted
on the Nigeria Stock Exchange (NSE). Data collected from the study sample was
analysed using Pearson Correlation method. Our findings show that there is a
positive and significant relationship between the implementation of
computerized accounting system and the effectiveness of manufacturing companies
in Nigeria. The findings also show that there is positive and significant
relationship between the implementation of computer based accounting system and
the efficiency of manufacturing companied in Nigeria. Given the findings as
summarized above, this study concludes that the implementation of computerized
accounting systems in manufacturing operations has led to increased
effectiveness in delivering on services. It has ensured that firms in the
sector can zero in on the most important and relevant issues and making sure
that such issues are taken care of effectively. We also conclude that the
implementation of computerized accounting systems has greatly improved the
efficiency of manufacturing companies by identifying wasteful activities which
are subsequently eliminated and thus leading to saving on costs. Given the
findings and conclusions, we recommend that manufacturing companies should
continue to increase the computerization of their accounting and indeed
manufacturing processes. The research further recommended that manufacturing
companies provide adequate training and re-training for the staff that are
expected to work with the computerized systems. Finally, we recommend that
regulators and policy makers in the sector make policies that will encourage
manufacturing companies to implement computer based accounting systems in order
to comply with international best practices.
83 Pages
Project Reference Code: C059
CHAPTER ONE
INTRODUCTION
1.1
Background
to the Study:
Accounting is an indispensable tool in managing a
business whether small or large. Simply put, accounting is the lifeline
(sustenance) of a business. Many categorise accounting as the language of
business because accounting is the means by which the business transactions and
events are measured and communicated to interested parties. A popular
definition of accounting is that given by the American Institute of Certified
public Accountants (AICPA) as the art of identifying, recording, classifying
and summarizing in a significant manner and in terms of money, transactions and
events which are, in part, at least of a financial character and interpreting
the result thereafter. Therefore, the purpose of accounting is to provide means
of recording, reporting, summarizing and interpreting economic data.
Accounting information is necessary in order to
evaluate a company’s past performance, present condition and future prospects.
In order to achieve this accounting system must be designed. An accounting
system is a collection of processes, procedures and controls designed to
collect, record, classify and summarise financial data for interpretation and
management decision making. There are two main types of accounting system; the
manual and computerized/automated accounting system. The choice of an
accounting system depends on the size of the organization, the nature of the
processes, the extent of computerization, the philosophy of management and
other factors. Certainly, most large and medium size organization use computerised
accounting system (CAS) also called Electronic data processing or EDP system.
Companies and individuals hire accountants in order
to help them carry out accounting function. Before information is being
introduced to accounting, accounting function was performed manually. According to Rose N.N, Bichanga W.O, Andrew
N. (2015), with the introduction of computers in business, the manual method of
financial accounting and management is being gradually replaced with
computerised ones. Technology has created significant advances in the area of
financial management and accounting software. Information technology and
systems have tremendous impact on the productivity and performance of
manufacturing firms (Siamek, N.S. 2013). Many organisation greatly rely on
computers and accounting software to provide accurate information to
effectively manage their businesses. Computerization of accounting system has
contributed immensely to the accounting department; it has shortened the lead
time needed by accountants to prepare and present financial information to
management and stakeholders. (Briggs and Bamson, 2013).
Computerized accounting system characteristics
refers to those technical aspect of the system in terms of meeting the user
requirements (system quality) and the quality of the output produced by the
system (information quality). Some commonly measures of system quality are
reliability, flexibility, response time and maintainability. For information
quality measures include completeness, timeliness, accuracy and relevance.
There has been a record of increase in business
performance over the years in the world, and this performance is mainly
measured in terms of profitability. The term profitability is referred to as
the ability to make profits steadily over a long period of time. Profitability
can be assessed through the use profitability ratios such as net profit margin,
return on assets (ROA), earning per share (EPS) and other accounting
ratios.
The use of computerized accounting in the
manufacturing industry is relevant and beneficial considering the significant
role of manufacturing firms in the economy. This paper examines the
relationship that exists between computerized accounting system characteristics
and the profitability of quoted manufacturing firms in Nigeria.
1.2
Problem
Statement:
The world is said to be a global village. Recently
there has been widespread in the use of ICT in all facets of business.
Accounting disseminates economic information to the business units and
information is much more useful when it is conveyed through a proper reporting
system. Poor accounting information has a negative implication on the
performance of a business, thus computerised accounting system is adopted by
most firms to curb this problem.
In Nigeria, few study has been carried out on
computerised accounting system; Briggs, D. and Bamson, T.J. (2013) carried out
a research on computerised accounts receivable accounting and financial
performance of supermarkets in Port Harcourt, Tijani, O.M. and Mathias, O.
(2013), computerised accounting and perceived security threats in developing
economies: the Nigeria case, Agbim C.P.
(2013); the effects of CAS on the performance of banking industry in Nigeria.
No study has evaluated the relationship that exists between CAS and
profitability especially in quoted manufacturing firms in Nigeria.
Despite
the significance of computerised accounting and its widespread use, there has
been relatively little research on how it affects profitability of firms,
particularly manufacturing firms. The manufacturing industry is the nucleus of
economic growth, therefore any system adopted or use should be properly evaluated
to know how it affects the industry. The researcher deemed it
necessary then to assess whether there is a relationship between computerised
accounting system characteristics (qualities) and profitability of
manufacturing firms in Nigeria.
1.3
Objective
of the Study:
1.4
Research
Questions
1.5
Research
Hypothesis
1.6
Significance
of the Study:
1.7
Scope
of the study
1.7.1
Geographical
Scope:
1.8
Limitation
of the Study:
1.9
Operational
Definition of Terms
1.10
Organization
of the study
REFERENCE
CHAPTER TWO
REVIEW OF RELATED
LITERATURE
2.1 THEORETICAL FRAMEWORK
2.1.1 The System
Theory
Kaufmann
(1966) developed systems to explain historical development as a dynamic process
and was more fully developed by Ludwig Von Bertalanffy (a biologist) in 1968
who argued that everything is
interconnected and therefore, we should study the interconnectedness as a means
of understanding the world. A system is a collection of related and
interdependent components or elements that interact to perform a task in order
to achieve a common goal.
Computerized Accounting System is a computer based system,
which combines accounting principles, concepts as well as the concept of
information system to record, process, analyze and generate financial
information to its users for business and economic decision making. The
illustrative figure below relates the CAS to systems theory since it involves
multiple components which interact to generate usable results these are input, processing, output and users.
2.1.2 The
Information Systems Model (IS success model or Delone and
2.2 CONCEPTUAL FRAMEWORK
2.2.1 The Concept of Accounting Information System
(AIS):
2.2.2 Computerized Accounting System:
2.3 COMPUTERIZED ACCOUNTING SYSTEM CHARACTERISTICS
2.3.1
SYSTEM QUALITY
2.3.1.1
Reliability
2.3.1.2
Flexibility
2.3.1.3
Accessibility
2.3.2
INFORMATION
QUALITY
2.3.2.1
Relevance
2.3.2.2
Timeliness
2.3.2.3
Accuracy
2.3.2.4
Completeness:
2.4 PROFITABILITY
2.4.1 Net profit margin:
2.4.2 Return on assets (ROA)
2.4.3 Earnings per share (EPS):
2.4 EMPIRICAL ANALYSIS
2.4.1
Local (Nigeria) Evidence
2.4.2
International Evidence
2.5 The Manufacturing Sector in Nigeria
2.6 Summary of Literature Review:
Proposed Conceptual
Framework
 |
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design:
The study adopted the quasi-experimental research
design to survey three (3) companies in the manufacturing industry in Port
Harcourt, Rivers State Nigeria.
3.2 Population of the study:
The target population consists of all manufacturing
companies in Nigeria listed on the Nigerian Stock Exchange (NSE) which adopted computerized
accounting system during the period of 2011 – 2015 and with the following
criteria:
-
The company must be one
of those using AIS effectively.
-
It must be listed on
NSE.
3.3 Sample and Sampling Technique:
3.3.1 Sample size and selection method:
3.4 Data Collection and Questionnaire Design:
3.5 Data Analysis Technique:
3.6 Validity of the Instrument
REFERENCE
CHAPTER
FOUR
DATA
PRESENTATION ANALYSIS AND DISCUSSION
4.0 INTRODUCTION
In this chapter, the data collected
through survey would be analyzed. Hence, the first part of the chapter is
descriptive analysis examining the descriptive statistics of the aggregate 68
accessible population of the study. The second part considered responses to
answering the research question, as well as test the study hypothesis using,
appropriate statistics.
4.1 DATA
PRESENTATION
4.2 DATA ANALYSES AND INTERPRETATION
4.3 HYPOTHESES TESTING AND INTERPRETATION
Hypothesis One
Hypothesis
Two
Hypothesis
Three
Hypothesis
Four
CHAPTER
FIVE
SUMMARY
OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
The findings of this research project are
summarized below:
i.
The
findings show a positive and significant relationship between the
implementation of computerized accounting system and the effectiveness of
manufacturing companies in Nigeria. This finding indicate that as the
implementation of computer based accounting system is increases, the
effectiveness of manufacturing companies in terms out is also expected to
increase.
ii.
The
findings also show that there is positive and significant relationship between
the implementation computer based accounting system and the efficiency of
manufacturing companied in Nigeria. This finding implies that as more processes
in manufacturing are computerized, there efficiency will also increase.
5.2 CONCLUSIONS
5.3 RECOMMENDATIONS
REFERENCES
QUESTIONNAIRE
Project
Reference Code: C059
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