Background Information
Discuss about the Impact Of Accounting Information System Implementation In Accounting.
The current business environment is very complex and competitive. In a systematic study, Chen (2016) denotes that with advancement in technology, ICT has become the center stage of business. It is providing or rendering a stiff and competitive advantage to different businesses in different facets depending on their respective industries of operation. For instance, the financial institutions, banking industries, and accounting professional are now using technology in various aspects of business with the aim of improving efficiency and effectiveness on their financial services and responsibilities. Communication technology has led to the design of software and physical devices that link different facet of computer hardware components in the transfer of data and information from one point to another as pointed out by Kisely and Kendall (2017, p. 1271).
The same issue can raised in Yaya Consultancy Center about the impact and value relevance of AIS. In another study, Malikova and Brabec (2016) asserted that AIS often play a very essential role regarding the strategic management of different organizations. In other words, AIS acts as a mechanism that enables the completeness and effectives of organization strategy. Past scholars had the assumption that the organizational performance in a role of the financial performance, AIS, and performance management. Therefore, fitness can be achieved in the combination between AIS and strategy with the aim of the organization to effectively achieve financial performance.
In another study, Kisely and Kendall (2011) denote that business organizations tend to use accounting information system in providing support for such strategies. In analyzing several studies, gaps still exist on clearly explaining the impact of AIS, an aspect that forms the major ground of objectives for this study. Johnson (2011) also point out quality information is regarded as an aspect of competitive advantage for the organization. For every accounting system, the quality of information that is generated from the AIS is essential for the Management to support effective processes in making decisions within the organization.
Facco, Cargnelutti Filho, Mendonça Alves, Burin, Oliveira dos Santos, Andiara Kleinpaul, and Márcio Neu (2016) examined the effectiveness and impacts of accounting information system as well as their influential factors in determining the performance of small scale and large scale organizations in Asia. He adopted the use of a proposed model in the examination of the impact of accounting information system sophistication, participation of managers in the implementation process, management skills and knowledge, as well as the effectiveness of the external experts like consultants, vendors, accounting firms and government agencies (Peshori 2014, p. 9). The result of the study found out that the knowledge and skills of the Management, effectives of accounting firms and vendors have no significant contribution to the effectiveness of accounting information system as supported by Lewon, Munoz Blanco, & Hayes (2011, p. 90).
Research Problem
In a systematic study, Facco et al. (2016) denotes that accounting information system is an essential topic for researchers and managers alike. The same study denotes that there is evidence of many gaps existing between research and practice of the same concept. On management decision and accounting information systems, Coen and Thiel (2011) opine that the implementation and management of an internal control system crucially depends on the role the accounting information system plays and the impact on the business. However, it is relevant to question the fit of accounting information system with organizational requirements for control and information communication. The study will thus help in evaluating the effectiveness of the information generated from the accounting system in relation to the process of making decisions in the organization. At the end the purchase, usage, and installation of the system may be beneficial in case the benefits exceeds the costs.
In the current business environment, many organizations continue to increase the level of their financial expenses on information system, an aspect that leads to the rise of their budget. At the same time, competition and economic competition is creating pressure on the cost of information that every organization requires. Dimitropoulos, Leventis, and Dedoulis (2016) also denote that information system us designed using information technology thus helps individual in performing their duties. As a result, many small and large companies are focused on developing their systems with the aim of supporting communication, management of knowledge, and decision-making among other issues. However, the adoption of information systems of accounts is poorly adopted since many organizations have no clear view of the benefits it can render the organization. Therefore, this study will help in evaluating the impact of accounting information system.
For most organizations, the management tends to rely much on information generated from the accounting information systems that the company employs (Rusmanto 2016, p. 9). In a study, Murthy and Wiggins (2011) denote that quality reports are ideal for effective business performance and investment. The same study denotes that traditional ways of recording, reporting, and summarizing the financial reports of the organization often lead to less options for effective decision-making. Therefore, there is a need for investment in reliable and good accounting systems as a major concern for all organizational managers as it leads to better management and analysis of the economic performance of the firm (Muqattash 2017). In this study, two primary issues will be examined in details; the deficiency in acquiring and transfer of academic skills and knowledge on the effective accounting information systems. It will also examine the insufficiency of adopting the accounting information systems with a major focus on the logic of transformation and the use in the global business environment. The study together with other scholars recommends the need for managers and accounting professionals to acquire effective knowledge in accounting information system with the aim of having a clear understanding of the financial aspects of the business and their requirements in the process of implementations.
Justification
Malikova and Brabec (2016) also denote that the traditional ways of recording, reporting, and summarizing the financial reports of a company led to less option in decision making. Therefore, investing on a good and more reliable accounting system is a major concern or many organizations. Hence, there is a need to investigate on the use or application of accounting systems by automakers and understand how it can impact the effectiveness of the organization (Lub 2016). Therefore, this study is focused on evaluating and understanding the impacts of implementing accounting information system in accounting, an aspect that will give a detailed understanding on the importance of the Impact of accounting information system implementation in accounting in the efficiency and general performance of both small and large scale business organizations. The study will depart somewhat from the view of other scholars as it will focus on the ways that specific information technology affects the operation of organization with a major study on the impacts of adopting the accounting information in small scale organizations.
The primary aims of this study will be;
- To study the roles accounting information system plays as well as it potential contribution to Yaya Consultancy Center
- To evaluate the lacunas of the accounting information system
- Determine the extent of perception and awareness of managers in regard to the adoption of accounting information system in the organization
- To evaluate the differences between management decision-making effects for managers who adopt the use of accounting information system and those that do not
- To understand the effectiveness of the accounting information systems in helping managers to make decisions.
The study will focus on evaluating the internal controls of the organization. Aspects such as lack of accounting segregation as well as custodian functions will help in identifying the greatest weakness of the organization. Such information will help in establishment of an internal audit unit, separation of purchase duties and factitively designing a centralized cash receipts.
Accounting Information System is the information characteristics of the design the system provides as pointed out by Drum, Pernsteiner, and Revak (2016, p. 185). Different scholars have different views of defining AIS. For instance, Lamesh and Murali (2016) describe it on the basis of the perceived usefulness of the four primary information attributes that is level of aggregation, integration, timeliness, and scope. On the other hand, Quéré, Nouyrigat, & Baker (2018) denote that the same information can also be quantified in monetary and non-monetary terms, historical vs. future events, and internal vs. external environment of a business. The aspect of timeliness defines the speed or frequency of reporting the information and can be long or short run (Dimitropoulos, Leventis, & Dedoulis 2016, p. 459). Aggregation also defines the way the same data is aggregated in time periods, according to the decision model, or functions. Integration focus on the need of providing information that can reflect the coordination and interaction effects of different facets of functions within the organizations. The analysis of the AIS is depended on the above four attributes with the aim of making comparison between organizational performance and strategies as well as the AIS. However, Benson and Marks (2014) denote that it is just recently that many studies begun to do research on whether organizations systematically vary in reference to the AIS design in support of their chosen strategy. These studies have proven that accounting information system have the potential of facilitating the management performance as well as enhancing effective and sustainable performance within the organization.
Aims and Objectives
In a systematics study, Drum, Pernsteiner, and Revak (2017) point out on the relationship between organizational effectiveness and automated accounting information system. The result of the study indicated that there exists a strong relationship between the organizational effectiveness and the AIS, which can as well be interpreted that access to accounting information can lead to the success of the organization meeting its strategic objectives. Other recent studies in the value of the accounting information for share price, equity valuation, as well as earning prediction have posted questions to the financial financing models currently used in the market place as pointed out by Gramling, Nuhoglu, & Wood (2013, p. 141). The same issue can raise in Yaya Consultancy Center about the impact and value relevance of AIS. In another study, Masanet-Llodra (216) asserted that AIS often play a very essential role regarding the strategic management of different organizations. In other words, AIS acts as a mechanism that enables the completeness and effectives of organization strategy. Past scholars had the assumption that the organizational performance in a role of the financial performance, AIS, and performance management. Therefore, fitness can be achieved in the combination between AIS and strategy with the aim of the organization to effectively achieve financial performance.
In another study, Benson and Marks (2014) denote that there is stiff competition in the global business environment. As a result, the management needs to engage in different business activities that as well require reliable information and good quality. In other words, quality information is regarded as an aspect of competitive advantage for the organization. For every accounting system, the quality of information that is generated from the AIS is essential for the management to support effective processes in making decisions within the organization. Meerwijk and Sevelius (2017) denote that business organizations tend to use accounting information system in providing support for such strategies. In analyzing several studies, gaps still exist on clearly explaining the impact of AIS, an aspect that forms the major ground of objectives for this study.
In their review, Chi (2011) denotes that the management often compare information about current performance to forecasts, budgets, prior periods, as well as other benchmarks with the aim of measuring the extent to which different objectives and goals can be achieved. It can also be adopted to identify unusual conditions or unexpected results that need follow-ups. The managers are also trusted with the line responsibilities for implementation, design, and monitoring of the internal control systems in the same way they are primarily responsible for identifying the compliance and financial risks of the organizational operations. However, the internal controls often center around the accounting information system of the company, a function for the movement of financial information for a company as pointed out by Dodaro (2013). Therefore, the internal controls assist the managers in measuring and monitoring the effectiveness of their accounting performance and operations.
Expected Outcomes
In a systematic study, Bigus (2011) point out two main types of internal controls that work in association with the effective firm management, mainly large scale an organization that greatly impacts the innovation of the organization. These include financial controls and strategic controls. The strategic controls involve the adoption of strategically relevant and long-term criteria for evaluating business models and the action and performance of the business-level managers. These controls ensure large emphasis on intuitive and at times subjective criteria for performance evaluation.
Using strategic controls require corporate managers to have a clear understanding of the business-level operations as well as the nature of the market. However, using such controls require rich exchange of accounting information between the divisional and corporate managers as pointed out by (Chen 2016). The same study denotes that the relationship between the organizational performance and AIS can be moderated by the strength of internal controls (Dimitropoulos, Leventis, & Dedoulis 2016, p. 459). In application of these literature, the study will focus on analyzing the contingency fit between accounting information system and, organizational effectiveness, and management performance using internal control processes, accounting data, and decision-making models. The results will be effective in understanding the impact of implementing accounting information system in the organization.
In this chapter, the study will set out a research approach that are effecting in achieving the set objectives. It is setting out the methodology of selecting the respondent, analysis, and collection of the data. The chapter is hence structured into the design of the research, sampling design and target population, producers and instrument of data collection, as well as the conceptual and analytical models of data analysis.
This section is encompassing the procedures and methodology that are employed in the process of collecting the relevant data for this study. The study will employ a cases study approach that will allow for effective investigation and interaction of the salient factors in the study as supported by Warren (2015). In this case, the research design adopted will facilitate a clear and elaborate understanding in the impacts of accounting information systems in references to the performance and effectiveness of small and large business organizations, with Yaya Center as the case study organization.
This study will use descriptive method of study while employing qualitative and quantitative methods for data collection and analysis. The descriptive design will be suitable for the study as will help in addressing the major research questions and objectives that are earlier proposed in the study.
The target population for this study will be 5 major consultancy branches of the Yaya Consultancy Center in Australia. The study will use 75% of the results by employing a sampling probability scheme where every unit in the sampling frame will have a chance of more than zero for selection. The focus is to accurately determine the probability through self-weighing. The study will also use a simple random sampling to give an equal chance for all the subset in the estimates and the population for easy calculation.
The study will adopt a system survey involving both qualitative and quantitative methods. Once the research is approved, a letter of introduction from the faculty will allow me to access the target organizations for study to access the consultancy first for data collection. The study will formulate open questions for the survey to ensure every data collected is focused on the stated objectives. The open ended questions will be directed towards the accounting and management departments to collect the relevant data on three main aspects. These will include focus on the knowledge and skills of the management in regard to the accounting information system, any possible challenges facing the adoption, as well as the changes realized towards effectiveness and efficiency of performance. The study will focus on administering 100 questionnaires that will then be collected back to consolidate and analyze the data.
All the questionnaires will be consolidated followed by editing to ensure completeness, consistency, uniformity, and accuracy in relations to the response from the interviewees. SPSS software for data analysis will be used in analyzing the quantitative data The analysis will occur through the use of both the inferential statistics and any other relevant descriptive method. The illustrative data analysis method entails frequency distribution, cross-tabulation, and measure of the central tendencies. The depressions such as mean and standard deviation will provide the characteristics of the collected information, and then the analyzed data will be represented into tables and frequency graphs for better observation of the outcome.
In this study, the reliability will be ensured by testing different reliability instruments of value, normally known as the Alpha values as recommended by Warrens (2015, p.8). The study recommends the analysis of the Alpha values for every variable under study. The values are required not to be less than 0.6 for the statements for an instrument to be deemed as reliable for a study. After which, every statement under every variable will be subjected to the test to ensure they are all above 0.6. According to Bebchuk and Hamdani (2017), a measure is considered reliable in case it is consistent across times and is error free and across several system facets.
In calculating the indices studies, questionnaires will be used where individual questionnaires will focus on collecting relative data. To effectively summarize information and data, a score will be given to each item where the average score for the questions will be calculated as a factor determining the success of the study as predicted in the table 1. However, this will only be effective when the indices calculated will be in the range of 1-5 with positive open-ended question. In this sense, the high number will indicate the impact of implementing accounting information system with respect to other factors. These will include the understanding and knowledge of the accountants and managers, managers’ decision making abilities, organizational resources, organizational performances in relation to the objectives, and financial performance.
Table 1: Measuring reliability of the questionnaire using the Chronbach’s alpha model
The most essential ethical issue that has to be monitored all through the study will be confidentiality. As the study will interview several managers and accounts, there I a need for keeping personal information or personal data that have to be treated with the highest confidentiality. It will be necessary to take every step that will help in getting the attention of every respondent, an aspect that will be helpful in ensuring confidentiality and openness is maintained all through the process. The process will be essential in avoiding any possible occurrence of a such as sharing of personal information with other irrelevant parties or using the information where not recommended. Any information collected regarding the company will as well be kept confidential. The questionnaires will as well be administered only to the willing individuals and there will be no forceful subject to participate.
List of References
Bebchuk, L, & Hamdani, A 2017, ‘Independent Directors And Controlling Shareholders’, University Of Pennsylvania Law Review, 165, 6, pp. 1271-1315, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Benson, ED, & Marks, BR 2014, ‘The Influence of Accounting Information Disclosed under GASB Statement No. 34 on Municipal Bond Insurance Premiums and Credit Ratings’, Public Budgeting & Finance, vol. 34, no. 2, pp. 63-83. Available from: 10.1111/pbaf.12035. [24 May 2018].
Bigus, J 2011, ‘Auditors’ liability with overcompensation and reputation losses’, OR Spectrum, 33, 2, pp. 287-307, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Chen, TY 2016, ‘Stumbling blocks in the implementation of accounting education reform: Evidence from Hong Kong’, Journal of Education for Business, vol. 91, no. 6, pp. 303-310. Available from: 10.1080/08832323.2016.1197878. [24 May 2018].
Chen, TY 2016, ‘Stumbling blocks in the implementation of accounting education reform: Evidence from Hong Kong’, Journal Of Education For Business, 91, 6, pp. 303-310, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Chi, W 2011, ‘An overlooked effect of mandatory audit-firm rotation on investigation strategies’, OR Spectrum, 33, 2, pp. 265-285, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Cohen, JF, & Thiel, FH 2010, ‘The Rescue911 Emergency Response Information System (ERIS): A Systems Development Project Case’, Journal of Information Systems Education, vol. 21, no. 2, pp. 149-157.
Dimitropoulos, P, Leventis, S, & Dedoulis, E 2016, ‘Managing the European football industry: UEFA’s regulatory intervention and the impact on accounting quality’, European Sport Management Quarterly, vol. 16, no. 4, pp. 459-486.
Dodaro, GL 2013, ‘Ethics and Integrity in Auditing’, Public Integrity, 15, 4, pp. 415-422, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Doty, JR 2012, ‘The Relevance, Role, and Reliability of Audits in the Global Economy’, Texas Law Review, 90, 7, pp. 1891-1911, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Drum, D, Pernsteiner, A, & Revak, A 2017, ‘Workarounds in an SAP environment: impacts on accounting information quality’, Journal of Accounting & Organizational Change, vol. 13, no. 1, pp. 44-64. Available from: 10.1108/JAOC-05-2015-0040. [24 May 2018].
Drum, DM, Pernsteiner, AJ, & Revak, A 2016, ‘Walking a mile in their shoes: user workarounds in a SAP environment’, International Journal of Accounting & Information Management, vol. 24, no. 2, pp. 185-204. Available from: 10.1108/IJAIM-09-2015-0059. [24 May 2018].
Facco, G, Cargnelutti Filho, A, Mendonça Alves, B, Burin, C, Oliveira dos Santos, G, Andiara Kleinpaul, J, & Márcio Neu, I 2016, ‘Sample size for estimating average productive traits of pigeon pea’, Ciência Rural, 46, 4, pp. 619-625, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Gramling, A, Nuhoglu, N, & Wood, D 2013, ‘A Descriptive Study of Factors Associated with the Internal Audit Function Policies Having an Impact: Comparisons Between Organizations in a Developed and an Emerging Economy’, Turkish Studies, 14, 3, pp. 581-606, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Johnson, A 2011, ‘The Accounting Undergraduate Capstone: Promoting Synthesis, Reflection, Transition, and Competencies’, Journal Of Education For Business, 86, 5, pp. 266-273, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Kisely, S, & Kendall, E 2011, ‘Critically appraising qualitative research: a guide for clinicians more familiar with quantitative techniques’, Australasian Psychiatry, 19, 4, pp. 364-367, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Lamesh, G, & Murali, R 2016, ‘Accounting Reforms in Municipalities: The Case of Bangalore City Corporation’, Vikalpa: The Journal For Decision Makers, 31, 3, pp. 57-80, Business Source Premier, EBSCOhost, viewed 24 May 2018.
Lewon, M, Munoz Blanco, M, & Hayes, L 2011, ‘Descriptive Versus Functional Accounts Of Psychological Events: Cyberrat As A Case In Point’, Behavior & Philosophy, 39/40, pp. 315-319, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Lub, V 2015, ‘Validity in Qualitative Evaluation: Linking Purposes, Paradigms, and Perspectives’, International Journal Of Qualitative Methods, 14, 5, pp. 1-8, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Malikova, O, & Brabec, Z 2016, ‘Implementation Of Environmental Management System (Ems) And Its Impact On Accounting Agenda – A Study Case Of An Automotive Company In The Czech Republic’, International Multidisciplinary Scientific Conference on Social Sciences & Arts SGEM, pp. 321-328.
Masanet-Llodra, MJ 2066, ‘Environmental Management Accounting: A Case Study Research on Innovative Strategy’, Journal of Business Ethics, vol. 68, no. 4, pp. 393-408. Available from: 10.1007/s10551-006-9029-1. [24 May 2018].
Meerwijk, EL, & Sevelius, JM 2017, ‘Transgender Population Size in the United States: a Meta-Regression of Population-Based Probability Samples’, American Journal of Public Health, vol. 107, no. 2, pp. e1-e8. Available from: 10.2105/AJPH.2016.303578. [24 May 2018].
Muqattash, RS 2017, ‘Factors affecting internal auditors’ objectivity: individual-level evidence from the United Arab Emirates’, Electronic Journal Of Applied Statistical Analysis, 10, 2, pp. 542-560, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Murthy, US, & Wiggins Jr., CE 2011, ‘Object-Oriented Modeling Approaches for Designing Accounting Information Systems’, Journal of Information Systems, vol. 7, no. 2, pp. 97-111.
Peshori, KS 2014, ‘Role of Independence in Ethics for SMP Accountants’, International Journal Of Multidisciplinary Approach & Studies, 1, 6, pp. 305-328, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Quéré, BP, Nouyrigat, G, & Baker, CR 2018, ‘A Bi-Directional Examination of the Relationship Between Corporate Social Responsibility Ratings and Company Financial Performance in the European Context’, Journal of Business Ethics, vol. 148, no. 3, pp. 527-544. Available from: 10.1007/s10551-015-2998-1. [24 May 2018].
Rusmanto, T 2016, ‘Do Audit Firm Size and Their Services Matter on Auditor Independence: A Case of Indonesia’, Journal Of Business Studies Quarterly, 7, 3, pp. 1-16, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Warrens, M 2015, ‘Some Relationships Between Cronbach’s Alpha and the Spearman-Brown Formula’, Journal Of Classification, 32, 1, pp. 127-137, Academic Search Premier, EBSCOhost, viewed 22 May 2018.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
