EFFICIENCY OF ACCOUNTING SOFTWARE IN THE PREPARATION OF FINANCIAL STATEMENT
ABSTRACT
The main objective of this study will seek to investigate the effect of Accounting Software on the preparation of financial statements in delivering Financial Accounting information for making crucial organizational decisions by management. It also aims at assessing Accounting Software support to the production of Financial Statements in time, accurate recording of transactions and also to ascertain the level at which accounting professionals in this field (utility) has adopted and applied information technology and conformed to the International Accounting Standard (AIS). The study first analyses the initial phase of AS adoption in the organization and shows how limited Accounting personnel skills, unplanned and uncoordinated innovations, and overwhelming organizational defects resulted in the inability of the technology to produce intended results. The study then proceeds to discuss how these initial problems were dealt with in the subsequent phase to produce more positive outcomes. Reasons for this success included comprehensive data analysis, departmental representation in planning, and corporate support for the technologies at the highest organizational levels. Based on these findings the study concludes that ECG will be able to take advantage of Information Technology to improve corporate financial reporting.
CHAPTER ONE
INTRODUCTION
1.1 Background to the study
Accounting refers to the process of identifying, measuring and communicating economic information to permit informed and rational decisions, Omonuk (2009), computerized accounting is defined by Alan & Frankwood (2005) as a total suite of components that together comprises all inputs, storage, transactions, processing, collecting and reporting of financial transaction data. A computerized accounting system involves the use of computers in processing accounting data into information to facilitate quick decision making through the timely preparation of financial reports and financial reporting in this case refers to the way in which financial information is recorded, processed and conveyed to the end users of this information in particular.
It is clear from the above definition that Financial Accounting goes beyond the ordinary imagination of many people to include being a means of measuring economic performances of industries in terms of money, building a system of monitoring that is the inflow and outflow of an organization in terms of assets and liabilities, revenue and expenditure. It also includes making good decisions (as stewards) on the earnings of shareholders and reporting same in the form of financial statement to this group of users.
The ultimate purpose of accounting software is to report information in all the ways you need to see it. Most organizations "make do" at some level with inadequate output; the accountant or bookkeeper spends time at the end of each month and year combing through the general ledger for details or exporting data to Excel in order to create reports.
Accounting information system being an asset of methods, people, procedures and devices regularly used to process business transactions, Hermanson et al, (1987), information is therefore much more useful when it is conveyed through a proper reporting system which gives it good qualities such as accuracy and reliability among others and this can be achieved by use of computerized accounting system.
1.2 Statement of the problem
The advancements in information technology have eventually led to the introduction of Computerised Accounting Systems in corporate reporting to help produce relevant and faithful representative financial reports for both management and external users for decision making (Greuning, 2006). The many advantages from the use of these systems have led many to conclude that Computerized Accounting Systems in Corporate Reporting is the ‘engine of growth in business organizations (Frenzel, 2006).
It is worth noting that, notwithstanding the introduction of these Computerized Accounting Systems and despite the enormous benefits from the use of these systems, the problem is that some companies still make use of the Manual Accounting Systems which are often characterized by keeping a large number of books and are usually associated with errors in recording large volumes of transactions. Reasons for the use of the manual accounting system may be attributed to factors such as the inadequate supply of expert knowledge about the Computerized Accounting Systems; high cost of installation and maintenance; resistance to change; risks of being hacked; power failure; viruses and losing information.
The problem is what could be the reasons for the adopting of the use of Accounting Software in corporate reporting? This would result in looking into the positive effects of accounting software in corporate reporting to the business world as well as the challenges that hinder the smooth use of the Computerized Accounting Systems. With the increased complexity of transactions and the emergence of new technologies raises the question as to how the Electricity Company of Nigeria (ECG) will take advantage of Information Technology to improve their corporate reporting.
1.3 Purpose of the Study
It is obvious and predictable that in today’s modern business and organizational set up, businesses cannot succeed without technology. The world of technology has become dynamic and needs people and leaders who are proactive to survive and remain in business.
To prepare, analyze, and use accounting information in today’s world, we need to understand the important role computers play in most accounting systems. In essence, computers are tool that
The purpose of the study was to assess the impact of computerized accounting on financial reporting in Electricity Company of Nigeria.
The research also examines the compliance of this Financial Reports generated by this software
1.3.1 Objectives of the study
In view of the questions and issues raised, the following objectives will be accomplished in this study:
To evaluate the challenges in the use of Accounting Software in the general performance of
ECG
1.4 Research Questions
The discussions, observations and questions would seek to answer the following questions:
- What accounting software is adopted by ECG?
- What is the level of usage of the software by ECG?
- How effective has the software addressed ECG’s accounting challenges?
1.5 Significant of the Study
The study would be expected to make the following contributions.
- The study will help the management of different organizations in determining what best accounting software to adopt in order on performance of the firms and the preparing quality and reliable financial reporting.
1.6 Scope of the study
The research covered Accounts and finance departments of the Electricity Company of Nigeria Limited of Ashanti East branch.
1.7 Limitation of the study
The research would be faced with these limitations
Uncooperative respondents: as usual, not every respondent during research is completely willing to cooperate positively towards the demands of the researcher, some are even hostile. However, giving up on the respondent will only hinder the acquisition of the necessary information, so the researcher will not get tired as far as wooing the respondents to cooperate is concerned.
Language barriers in communicating with the respondents, bias on the part of the respondents to give out information about their status, the unwillingness of getting information from the management on the topic been studied in the name of confidentiality are some of the anticipated limitations of the study.
1.8 Organization of the study
This study is structured into five main chapters.
Chapter 1 presents an introduction to the study and captures the background, problem statement,
Chapter 2 reviews relevant literature in this area. Pertinent literature shall be collated to provide the needed conceptual and empirical framework for the study. Chapter 3 presents the detailed methodology for the study. In this chapter, the objective of the research shall be clearly stated along with the method of obtaining data. Also, it shall cover the data of analysis. Chapter 4 presents the findings and analysis of the study. Chapter 5 wrap-ups with the conclusions and recommendations.
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EFFICIENCY OF ACCOUNTING SOFTWARE IN THE PREPARATION OF FINANCIAL STATEMENT
ABSTRACT
The main objective of this study will seek to investigate the effect of Accounting Software on the preparation of financial statements in delivering Financial Accounting information for making crucial organizational decisions by management. It also aims at assessing Accounting Software support to the production of Financial Statements in time, accurate recording of transactions and also to ascertain the level at which accounting professionals in this field (utility) has adopted and applied information technology and conformed to the International Accounting Standard (AIS). The study first analyses the initial phase of AS adoption in the organization and shows how limited Accounting personnel skills, unplanned and uncoordinated innovations, and overwhelming organizational defects resulted in the inability of the technology to produce intended results. The study then proceeds to discuss how these initial problems were dealt with in the subsequent phase to produce more positive outcomes. Reasons for this success included comprehensive data analysis, departmental representation in planning, and corporate support for the technologies at the highest organizational levels. Based on these findings the study concludes that ECG will be able to take advantage of Information Technology to improve corporate financial reporting.
CHAPTER ONE
INTRODUCTION
1.1 Background to the study
Accounting refers to the process of identifying, measuring and communicating economic information to permit informed and rational decisions, Omonuk (2009), computerized accounting is defined by Alan & Frankwood (2005) as a total suite of components that together comprises all inputs, storage, transactions, processing, collecting and reporting of financial transaction data. A computerized accounting system involves the use of computers in processing accounting data into information to facilitate quick decision making through the timely preparation of financial reports and financial reporting in this case refers to the way in which financial information is recorded, processed and conveyed to the end users of this information in particular.
It is clear from the above definition that Financial Accounting goes beyond the ordinary imagination of many people to include being a means of measuring economic performances of industries in terms of money, building a system of monitoring that is the inflow and outflow of an organization in terms of assets and liabilities, revenue and expenditure. It also includes making good decisions (as stewards) on the earnings of shareholders and reporting same in the form of financial statement to this group of users.
The ultimate purpose of accounting software is to report information in all the ways you need to see it. Most organizations "make do" at some level with inadequate output; the accountant or bookkeeper spends time at the end of each month and year combing through the general ledger for details or exporting data to Excel in order to create reports.
Accounting information system being an asset of methods, people, procedures and devices regularly used to process business transactions, Hermanson et al, (1987), information is therefore much more useful when it is conveyed through a proper reporting system which gives it good qualities such as accuracy and reliability among others and this can be achieved by use of computerized accounting system.
1.2 Statement of the problem
The advancements in information technology have eventually led to the introduction of Computerised Accounting Systems in corporate reporting to help produce relevant and faithful representative financial reports for both management and external users for decision making (Greuning, 2006). The many advantages from the use of these systems have led many to conclude that Computerized Accounting Systems in Corporate Reporting is the ‘engine of growth in business organizations (Frenzel, 2006).
It is worth noting that, notwithstanding the introduction of these Computerized Accounting Systems and despite the enormous benefits from the use of these systems, the problem is that some companies still make use of the Manual Accounting Systems which are often characterized by keeping a large number of books and are usually associated with errors in recording large volumes of transactions. Reasons for the use of the manual accounting system may be attributed to factors such as the inadequate supply of expert knowledge about the Computerized Accounting Systems; high cost of installation and maintenance; resistance to change; risks of being hacked; power failure; viruses and losing information.
The problem is what could be the reasons for the adopting of the use of Accounting Software in corporate reporting? This would result in looking into the positive effects of accounting software in corporate reporting to the business world as well as the challenges that hinder the smooth use of the Computerized Accounting Systems. With the increased complexity of transactions and the emergence of new technologies raises the question as to how the Electricity Company of Nigeria (ECG) will take advantage of Information Technology to improve their corporate reporting.
1.3 Purpose of the Study
It is obvious and predictable that in today’s modern business and organizational set up, businesses cannot succeed without technology. The world of technology has become dynamic and needs people and leaders who are proactive to survive and remain in business.
To prepare, analyze, and use accounting information in today’s world, we need to understand the important role computers play in most accounting systems. In essence, computers are tool that
The purpose of the study was to assess the impact of computerized accounting on financial reporting in Electricity Company of Nigeria.
The research also examines the compliance of this Financial Reports generated by this software
1.3.1 Objectives of the study
In view of the questions and issues raised, the following objectives will be accomplished in this study:
To evaluate the challenges in the use of Accounting Software in the general performance of
ECG
1.4 Research Questions
The discussions, observations and questions would seek to answer the following questions:
1.5 Significant of the Study
The study would be expected to make the following contributions.
1.6 Scope of the study
The research covered Accounts and finance departments of the Electricity Company of Nigeria Limited of Ashanti East branch.
1.7 Limitation of the study
The research would be faced with these limitations
Uncooperative respondents: as usual, not every respondent during research is completely willing to cooperate positively towards the demands of the researcher, some are even hostile. However, giving up on the respondent will only hinder the acquisition of the necessary information, so the researcher will not get tired as far as wooing the respondents to cooperate is concerned.
Language barriers in communicating with the respondents, bias on the part of the respondents to give out information about their status, the unwillingness of getting information from the management on the topic been studied in the name of confidentiality are some of the anticipated limitations of the study.
1.8 Organization of the study
This study is structured into five main chapters.
Chapter 1 presents an introduction to the study and captures the background, problem statement,
Chapter 2 reviews relevant literature in this area. Pertinent literature shall be collated to provide the needed conceptual and empirical framework for the study. Chapter 3 presents the detailed methodology for the study. In this chapter, the objective of the research shall be clearly stated along with the method of obtaining data. Also, it shall cover the data of analysis. Chapter 4 presents the findings and analysis of the study. Chapter 5 wrap-ups with the conclusions and recommendations.
Attached Files
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