THE INFLUENCE OF COMPUTERISED ACCOUNTING ON ORGANIZATIONAL PERFORMANCE

1.0 Introduction

This chapter presented the background of the study, the statement of the problem, purpose of the study, objectives of the study, research questions and the significance of the study.

1.1 Background

1.1.1 General background of the study

The utilization of computers started far back in 1930 as electro-mechanic accounting machine that used to sort computer cards into bins and calculate totals then print reports for decision making, ( Laudon&Laudon, 2007 ).

Since then computers system has progressed through personal computer era to client server era and currently to enterprise internet. Computing era of communications environment on Transmission control protocol/ Internet protocol (TCP/ IP) all aimed at information generation, information sharing and information Application (French, 2001). Information systems are changing business processes and in the management of the inventory in different organizations giving rise to new terms such as vendor managed inventory, (Sewanyama and Busier, (2007).

Globally, in the year 2000,539 million computers were being used with 410 million in U.S.A European Union and Asia, leaving 129 million in developing countries (NPA, 2010).Similarly the internet users were 315 million in 2000 and the number was estimate to grow to 716 million users by 2005, with the majority of these users in the developed countries (Ngplains, 2003).

Technology covers vast areas of organizational activities and is used in an organization in many forms such as mobile and wireless technology, telecommunications, software development, security. Printing and photocopying, intelligent systems etc. technological advancement has had a huge impact on industries, organizations, and the community in general and our daily lives technology has many application in an organization can be applied to many fields. (Huang et al 2012).

Uganda as a country before the period of 2000, the level of fraud was not pronounced like it is happening now where there are many cases of fraud running on the media such as news papers, radios, televisions and magazines. According to report on the news paper (daily monitor Monday 23 may 2011), Uganda revenue authority (URA) noted that the government is losing revenue as a result of organized crime between staff of the institution and officials of clearing and forwarding firms. Ms Sarah Kasheka, the acting commissioner customs said that “at least 10 clearing agencies have been suspended for tax fraud including; under declaration of the value of imported goods, diversion of cargo, and forging signatures of URA officials”.

More accounting irregularities were also experienced during Tamangalo land issue, mismanagement of national social security fund and during CHOGM in 2007 in Uganda. According to the Public Accounts Committee (PAC) report on the Commonwealth Heads of Government Meeting (CHOGM 2007) Kampala, the committee estimated that CHOGM expenditure almost doubled from the authorized and appropriate budget of two hundred seventy billions shillings (270,000,000,000/=) to over five hundred billions (500,000,000,000/=). According to PAC report (2010), some roads which were designed by the consultants were never worked on yet the designers had already been paid.

Organizations are looking at initiatives that can enable them obtain a better competitive advantage over their competitors, in terms of customer satisfaction. In order to achieve this goal executives in the information age are in need of instant and result oriented information in order to make strategic decisions. (Chaffey 2007)

Despite the fact there is constant improvement in computer systems and the huge amount of money invested in computer stymes, Companies are still incurring heavy losses in terms of high costs, delayed delivery, bribery, bid rigging, missing of products in transit and above all poor customer service, this is very disturbing to all the stakeholders as to why such mishaps continue to happen. Basing on this background the researcher therefore seeks to investigate into the impact of information and communication technology on procurement fraud.

1.2 Statement of the problem

Despite the fact that, there has been a great and constant improvement in computer systems, evidenced by the huge amounts of money invested by companies, procurement fraud still exists, corruption, theft, missing of goods in transit and poor customer service. In addition, there is low response in providing management, clients and suppliers with accurate and timely information. Therefore, based upon the above the researcher intends to investigate into the influence of computerised accounting on organizational performance.

.1.3 Purpose of the study

The study aims at establishing the influence of computerised accounting on organizational performance

1.4 Specific objectives of the study

The overall objectives of this research are;

1. To establish the benefits of computers in accounting at cooper motor cooperation Uganda Limited.
2. To assess the various forms of computerised system being employed in cooper motor cooperation Uganda Limited.

• To establish the relationship between computerised system and accounting efficiency at cooper motor cooperation.

1.5 Research questions

The following research questions shall guide the study;

1. What are the benefits of technology in accounting at cooper motor cooperation Uganda Limited?
2. What are the various forms of Technology being employed in cooper motor cooperation Uganda Limited?

• What is the relationship between technology and accounting efficiency at cooper motor cooperation?

1.6 Scope of the study

The scope of this study will be divided into subject, geographical and time scope.

1.6.1 Subject scope

The study will specifically look at the influence of computerised accounting on organizational performance.

1.6.2 Geographical scope

The study will be carried out in cooper motors (U) Ltd P.O. Box 1348 Kampala.

1.6.3 Time scope

The study will cover the period from February to August of this year (2017).

1.7 Significance of the study

1. The findings of the study will provide the management of cooper motors Uganda Limited information on benefits of technology in accounting practices.
2. The study will help accountants with information on the best forms of computer systems an organization can use.

• The study will also help future researchers with information on the relationship between technology and accounting efficiency at cooper motors.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter presents an overview of the existing literature based on other writers’ opinions, findings, and viewpoints on the influence of technology on the efficiency of accounting practices in an organization.

2.2 Benefits of technology in accounting

Marasco (2002) asserts that, technology will only be meaningful to an organization in case it is; Accurate thus free from errors, complete, simple to understand by all the participants, economic where resources are utilized properly.

Globalization, According to Marasco (2002), technology has not only brought the world closer together, but it will allow the world’s economy to become a single interdependent system. This means that we will not only share information quickly and efficiently, but we will also bring down barriers to sharing of accounting data across boundaries. The world will develop into a global village due to the help of technological advanced systems, allowing countries like Chile and Japan who are not only separated by distance but also by language to share ideas and information with each other.

Communication, Chaffey (2007) asserts that with the help of technology, communication become cheaper, quicker, and more efficient. We can now communicate with anyone around the globe by simply text messaging them, or sending them an email, for an almost instantaneous response. The internet has also opened up face-to-face direct communication from different parts of the world, thanks to the help of video-conferencing.

Cost effectiveness, Technology helps to computerize their accounting process, thus streamlining businesses to make them extremely cost effective money-making machines. This, in turn, increases productivity, which ultimately gives rise to profits; that means better pay and less strenuous working conditions in accounting, (Crake ,2003),

Bridging the cultural gap, Cortesao et al, (2005) argues that technology helps to bridge the cultural gap by helping people from different cultures to communicate with one another, and allow for the exchange of views and ideas, thus increasing awareness and reducing prejudice.

More time, Technology makes it possible for businesses to be open 24 x7 all over the globe. This means that a business will be open anytime, anywhere, making purchases from different countries easier and more convenient. It also means that you will have your goods delivered right to your doorstep without having to move a single muscle in such a situation accountants are able to work at any time, (Kennedy, 2001).

Creation of new jobs, Kennedy A, (2001) argues that probably, the best advantage of technology is the creation of new and interesting jobs. Computer programmers, Systems analyzers, Hardware and Software developers and Web designers are just some of the many new employment opportunities created with the help of Technology.

2.3 Different forms of technology

Electronic Data Interchange; This is an exciting development in the 1980s. EDI is a technique based on agreed standards which facilitates business transactions in a standardized electronic form in an automated manner directly from a computer application in one organization to an application in another organization. The growth of microcomputer usage in accounting systems is to direct electronic transmission of data and standard business forms between the buying organization and its suppliers. According to Lysons, (2006), 75% of the business units they surveyed have EDI capability with their various suppliers. Electronic Data Interchange and the internet have made flow and exchange of information once an EDI system is in place and functioning properly, it produces a number of clear-cut operating benefits for the buying firm. An obvious reduction in paperwork and related administrative contributes noticeably to increased productivity. Because data is transmitted directly between computers, accuracy of the data throughout the process typically increased. For the same reason, more complete and faster feedback of order status information is possible.

According to Bialy et al, technological progression necessitates that organizations should have formulated plans to handle development for example in the development of EDI as one of the information technologies used in supporting accounting activities. It is imperative that purchasing has an appropriate supplier who can jointly develop and use this technology.

In addition to the above, there has been different views concerning the integration of materials and information flows, both internally and externally for example; MRP, MRP II and integrated information systems such as EDI and supply chain concepts such as value streams.

At the same time, organizations can successfully run a home shopping and delivery systems for consumers over the internet. Within these businesses, intranets are put in place to enable information be shared between stores and this facilitates communication across the business making the internal operations become much more efficient as a result. For example, by capturing customer demand data sooner, better utilization of production and transport capacity achieved through proper planning and scheduling.

According to Preben Koch, head of ICT development at vital, Forsaking USA, explains “We needed to ensure cost-effective growth of the business by making our processes fast and accurate, using technology to save duplication of effort. Our administration system was out-dated. The long and complex forms required several steps of validation and this slowed up the process of handling cases.”

Koch still explains that by use of TIBCOS BPM suite that TIBCO software developed for vital paper mark and staff have been reduced by 25% and 35% while maintaining its level of service and also that case handlers now have instant access to client data  on screen including all contact details and the current status of applications and claims. As a result, customers can be kept well informed about their affairs and human mistakes can be avoided.

Bar codes and scanners                                                   

This system of Bar code and scanners represents a series of alphanumerical characters, bar code readers to interpret bar code zymology, and bar code printers to reliably and accurately print bar codes on labels, cartons, and/or picking /shipping documents. The review is included here because bar code systems are the foundation for many paperless warehousing systems, but the review is meant only as a brief introduction to bar code system, This helps in quick and accurate data entry, faster checking and clearing of shipments, automatic tracking of the shipments throughout the accounting practice, (Bailey, 2006).

Satellite

This is a technology that allows communication across a very wide geographical area. Satellite communication provides a fast and high volume channel for information movements. Satellite technology facilitates real time interaction which provides up to date information about location and delivery information about the products in transit. The satellite devices can also be used in tracking and tracing the materials both in ware houses and in transit this also enables an organization to have an accurate data regarding organization materials therefore creating efficiency in accounting systems, (Deo Mc Obrien and P.S Corbett, 2008).

Image processing

This uses fax and optical scanning technology to transmit and store freight bill information and supporting documents such as POD or BOL. Through image processing, the buying company is in position to get timely customer shipment information which is transmitted through the central Data base therefore, providing improved customer service in the form of more timely and accurate delivery, quick shipments, tracing and quicker transfer of sales and inventory information, (Van weele ,2005).

Internet

The strategic importance of information is recognized by most people and organizations. The internet thus far is primarily a tool for information sharing between the buying company and the selling company with the potential for electronic commerce being explored. Some companies are setting up private internet used to share data with workers and provide access to the larger internet. In logistics, the internet is used in order to enhance efficient, effective and timely communication between the buying and selling organization, tracking and tracing of the cargo during the actual process of accounting, (Zsidisin, G. and Papadakis 2003),.

Enterprise resource planning:

Enterprises Resource Planning is the English term for a business system. Again, another term that is used for business system is Enterprises System (ES). To describe an ES in a simple way one could say that ES is an information system that manages all the resources available in a company. It is a common term for a co-operating software that manages and co-ordinates much of a company’s resources, assets and activities (Boyle, 2004). Gartner Group developed the ERP concept under the 90’s. The term ERP is defined by them as: “ERP is a planning and communication system that affects all the resources of a company.” Boyle (2004) defines it as: “not a system, but a framework that includes administrative (finance, accounting), human resources (payroll, benefits), and Manufacturing Resources Planning (MRP) (procurement production planning). ERP units’ major business processes- order processing general ledger, payroll, and production within a single family of software modules.” There can be numerous benefits of using enterprises systems and according to Davenport (2002.) the most significant

Include’:

Customer order cycle: The customer order cycle: occurs at the customer/retailer interface and includes all process directly involved in receiving and filling the customer’s order. Typically, the customer initiates this cycle at a retailer site, and the cycle primarily involves filling customer demand. The retailer’s interaction with the customer starts when the customer arrives or contact is initiated and ends when the customer receives the order.

2.4 Relationship between technology and accounting efficiency

Standardized accounting process, including faster tracking of errors, improved quality control, efficiency in record keeping, greater efficiency through the use of information and communication components like internets, satellites among others that enables tracking and tracing of the goods in transit, during shipment as well as giving up to date information to the accountants about the quantity of goods in storage so that the accountants are able to reconcile the books of accounts with the physical stock in the store, (Kotler 2000).

Simplified accounting process; The introduction of technology has not only simplified the accounting process but has also improved on the business process including control over suppliers, improved process cycle time, close cooperation relationships, improved supply chain efficiency, accuracy of shared information, (Kenneth Lysons 2000).

Process Automation. With the use of technologically components such as Bar coding, Satellite, internets and Image processing among others in the process of managing accounting efficiency, there has been reduction on paper work thereby leading to a substantial reduction of errors, as well as increased capability to obtaining and exchanging real time information. This is possible through the use of information technology systems such as Bar code and scanners which represents a series of alphanumerical characters, bar code readers to interpret bar code symbology, and bar code printers to reliably and accurately print bar codes on labels, cartons, and/or picking /shipping documents.

Improved accounting process; Accounting process involves management of an organizations record with a view of minimizing organizational information in a cost effective way. Accounting information enables suppliers and buyers to get related information from the point of origin to the point of consumption Lysons and Farrington (2006). The introduction of technology has brought in tremendous improvements in the keeping of organizations records from the point of origin to the point of consumption including reduced arrangement costs and handling times, shortened response time for purchasing, improved order process speed and reduced labour costs.

Improved warehousing facilities. Warehousing is the primary link between the producers and the consumers; it is used for storing products (raw materials, in process inventory and finished goods) before they are finally worked upon or delivered to the ultimate consumers. Through the implementation of technology, ware house efficiency and effectiveness has improved greatly through using opportunities such as e- warehousing, e- receipts and e- issuing. These have brought about accurate operations in the warehouse hence complementing accounting management efficiency (R.J Carter et al, 2007)

Reduce product delivery time. Through the implementation of technological system in organizations like Spedag Interfreight Company the organizations’ processes of making payments to their suppliers have improved greatly including faster payment systems like using ATMS, credit cards among others. This reduces among others interest rate, credit risk among others (Aberdeen group 2005).

Improved distribution process. According to Dobler and Burt (2001) With improved tracking and tracing as a result of using internet, satellites among others, the company that is to say the distributing company is assured of efficiency and effectiveness in the distribution process as their trucks are properly tracked and traced so that in case the deliveries are made to a different location, the mistake can easily be rectified. This has therefore, improved Logistics efficiency in organizations and this has all been because of the introduction of information and communication technology. Other benefits include; delivering on time, reduced delivery enquiring time and improved distribution management.

Proper monitoring. The introduction of information and communication technology in logistics management has brought about efficient and effective monitoring of the materials during transit to their various destinations. This is done through use of technologies that allows communication across a very wide geographical area. Satellite communication provides a fast and high volume channel for information movements. Satellite technology facilitates real time interaction which provides up to date information about location and delivery information about the products in transit. The satellite devices can also be used in tracking and tracing the materials in transit. Tracking is specifically achieved through the use of internet and others, this therefore enables both the delivering organization or the supplier and the buyer to know where specifically the goods in transit is and also in case of any problem encountered say by the truck being used for the transportation purposes, it can easily be recognised by the parties concerned (Kenneth Lysons 2003)

Better communication and connection links. According to Nair N.K (2006), the introduction of information communication technology, communication between the buyers and the suppliers has been eased. Logistics is an old age industry that has been one of the greatest holdouts against the waves of computerization that has swept the world. Until recently, most organizations were still using traditional systems like fax and letter writing among others as a means of communication. However with the introduction of information and communication technologies such as telephones, internets and satellites among others, communication has not only been eased but also made efficient and effective.

Faster information transfer. Information and communication technology equipment like internet, satellite and telephones enables a speedy transfer of information between the supplier and the buyer. Therefore, all the necessary information that the supplier needs to give to the buyer regarding how the goods in transit should be handled, stored and packed are given to the buyer prior to delivery so that special attention is taken by the buyer where necessary, According to Dave chffey (2010),  information transfers in the basis of survival for an organization.

Reduce inventory levels. According to (Thomson and Singh 2001) technology helps the buying organisation to order the needed items at the right time and once the need arises then an order will be placed. This helps the organisation to do away with bulk stock levels hence solving the problem of inventory costs like obsolescence and dampness leading to losses this leads to efficiency and effectiveness in the logistics operations.

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter covers research design, study population, sampling design, sources of data collection, methods of data collection, procedure of data collection, data quality control, data processing, presentation, and analysis and finally limitations anticipated.

3.2 Research design

The study will use descriptive research design. The researcher will employ descriptive research design since it provided the opinion of people about the subject knowledge on the influence of computerised accounting on organizational performance. The design availed the researcher with comprehensive information about the research study as away to get solutions. Descriptive approach, in this case will be used because the study seeks descriptive analysis of information.

3.3 Study population

The population of the study will be 25 people which will include; the staffs of cooper motors from different departments. The researcher chose to take the above study population due to insufficient resources to manage a large number of respondents.

3.4 Sampling design.

Sampling design will consist of the sampling size and   sampling techniques.

3.4.1 Sampling size

The population under consideration will be 25 staffs from different department of Cooper Motors, like Procurement department, stores department, finance department, marketing and other department. The researcher will consider members of staff who have worked for at least six months and above in the organization.

3.4.2 Sampling technique.

The sampling technique will consider purposive sampling and this will be used to select workers form Procurement department, stores department, finance department, marketing. Simple random sampling was also used to select respondents from other department.

Random sampling will also be used in order to give equal chance to population of the study and business firms to be selected. The method will be chosen to save cash and time.

3.5 Sources of data collection

This will include both primary and secondary sources

3.5.1 Primary sources

The primary data will be obtained through questionnaires. This will involve distributing questionnaires to chosen respondents. Primary data will be used to compare whether what will be in the literature matches with respondent’s views.

3.4.2 Secondary data

The researcher will obtain data from written documents like reports which had already been compiled by other persons; will be obtained from journals, text books, magazines, and various documents through review of related literature from 1990 up to date. This will be to supplement on primary data and also to compare primary data with literature review.

3.6 Methods of data collection

This will include questionnaires and interviews that will be used to gather data on the influence of computerised accounting on organizational performance.

.

3.6.1    Questionnaires

The researcher will form close ended and open ended questionnaires designed to collect data on the influence of computerised accounting on organizational performance. Cooper Motors Ltd that was sent to respondents for them to answer, The researcher will collect questionnaires back for analysis; data will  then coded into understandable and meaningful information. This method was chosen because it was easier to gather information; it gave the respondents enough time to answer the questions since questionnaires was dropped to the respondents and then collected after 10 days.

3.6.2 Observation

This involved a researcher going to the field, and observe critically what was in the field, recorded the finding and then conclusion was drawn. The method gave more reliable and accurate information. It gave first-hand impression that removes doubt, it enabled researcher to clarify some questions on the spot.

3.7 Research variables

The variables of the study were independent and dependent variables. Computer system will be independent variable while organizational performance will be a dependent variable.

3.8 Procedure for data collection.

The researcher will acquire an introductory letter from the University and will be presented to the organization where the research will be conducted from.

3.9 Data quality control

The detailed information concerning the study will be analyzed in a way that will reflect what will be answered by the respondents. This will help the researcher to come up with accurate and correct results about the study variables.

3.10 Data analysis and presentation

The findings of the data will be presented by use of tables, by arranging describing data in relation to the objectives of the study. Editing will be done to ensure completeness of questioner and to eliminate misrepresentation of questionnaires.

3.11 Ethical consideration

The information got will be kept confidential and strictly used for academic purpose in writing the report.

3.12. Anticipated limitations.

The researcher may face the following limitations in the process of conducting the study;

• Limited time to conduct the study because of other activities however this will be solved through proper planning and time budgeting.
• Language barrier between the researcher and the respondents and this problem will be solved through encouraging respondents to guide them in terms of narrating.
• Limited financial support to the study this will be solved through borrowing from fellow students.