Research consultancy

2.1Computerized Accounting Systems

A computerized accounting system involves the computerization of accounting information systems which is established in order to facilitate decision making. These are associated with a numbers of benefits like speed of carrying out routine transactions, timeliness, quick analysis, accuracy and reporting. Effective and efficient information flow enhances managerial decision-making, thereby increasing the firm‟s ability to achieve corporate and business strategy objectives (Manson, McCartney, and Sherer, 2001). This in turn, may increase the prospects of the farm’s survival (Platt and Platt, 2012).This can be evaluated by the procedures, accounting records and tools used (Keating and Frumkin (2003).

2.1.1 Computerized accounting information system

Meigs et al (2008) says that computerized accounting system records all transactions that routinely deal with events that affect the financial position and performance of an entity. Marivic (2009) argues that computerized accounting information system helps in recording, organizing, summarizing, analyzing, interpreting and communicating of business finances and made available to stakeholders through the use of computers and computer based systems such as accounting packages.

Computerized accounting information system involves the use of computers to handle large volume of data with speed, efficiency and accuracy aimed at overcoming fundamental challenges which do not change the principle. The principle of accounting remains the limitations of many accounting and hence producing quality and reliable work. McRae (2008) adds that computerized accounting information systems are advantageous in consolidating information channels meaning that files that were previously been duplicated by several departments will now be consolidated into a single file.

2.2 Relationship between financial management and computerized accounting

Theoretically it is expected that a computerized accounting system would result to a quality financial management. It is easy to do accounting functions using computerized accounting systems. Posting transactions to the ledger, the principle of double entry can largely be automated when done through the use of computerized accounting system. Evidence from academic studies suggests that donors respond to accounting information in making their giving decisions (Parsons, 2007; Buchheit and Parsons, 2006). In 2010, Gordon and colleagues outlined five best practice recommendations for annual reports in the non-profit sector completeness, accessibility and transparency in financial reporting, full disclosure and relevance.

McBride (2000) stated that managers cannot easily satisfy statutory and donor reporting requirements such as profit and loss account, balance sheet and customized reporting without using computerized accounting systems. With the system in place, this can be done quickly and with less effort. Computerized accounting systems ease auditing and have better access to required information such as cheque numbers, payments, and other transactions which help to reduce the time needed to provide this type of information and documentation during auditing.

According to European Union audit in 2003, it was noted that organizations are not enjoying the benefit of computerization of accounting system as they have continued to be inaccurate due to increased number of interruptions as a result of system failure or breakdown and un-timeliness with its reliability left in question, (Lewis 1999).

Financial report is a means of portraying financial accountability, in order for an organization to review the financial activities of the past year and make plans for the future it prepares and publishes annual accounts or financial reports, Financial position and cash flow statement and other financial annually reports which provide an overview of the company’s current financial strength, financial reports are outputs of an accounting system and they are prepared at the end of the year, hence the name final accounts. According to Toms, J. S. (1998), the financial reports should include a narrative description of the organization’s activities and audited financial statements. He argues that these enable the stakeholders to see the organization’s performance and the overall financial situation of the organization. Samuel (1991), states that managers and accountants are usually required to defend the results shown in the financial reports as part of the accountability process.

According to Indira (2008), timeliness is an important characteristic of quality financial information. To benefit users, financial information must be presented at the right time otherwise it loses relevance. Relevance is also a characteristic of quality of financial reports. Frankwood indicates that financial information is relevant if it is capable of making a difference in decisions made by helping users to form predictions about the outcomes of the past, present and future events either to confirm or correct prior expectations. Comparability is another characteristic. Frankwood (1999) also stresses that users must be able to compare the financial statements of the enterprise over time in order to identify trends in its financial position and performance.

2.2.1 Relationship between financial management and financial planning

Initially it is necessary to define what is a financial planning that according to Groppelli & Nikbakth (2002) it is the process in which one calculates how much financing is necessary to give continuity to the operations of an organization, and if one decides how much and how the necessary funds will be financed. One can suppose that without a reliable procedure to estimate the necessary resources, an organization mat not have enough resources to honor its assumed commitments, such as obligations and operational consumptions.

The success of the operation, the performance and the long term viability of any business, depends on a continuous sequence of individual and collective decisions taken by the managerial team. Each one of those decisions, ultimately, causes an economic impact, for better or for worse, in the business. Financial planning, through its methods, formalizes the procedure by which the financial goals should be achieved, integrating the decisions of investments and financings in one and only cooperative plan.

Financial planning establishes the way in which financial objectives can be achieved. A financial plan is, therefore, a declaration of what should be done in the future. In a situation of uncertainty, it should be analyzed with great anticipation. Financial planning is an important part of the administrator’s work. Defining the financial plans and budgets he will be strengthening them, to achieve company objectives. Besides that, these instruments offer a structure to coordinate the diverse activities of the company and they act as control mechanisms, establishing performance model with which it is possible to evaluate the real events Lefley, F. (1997).

According to Gitman (1997, p. 608) the long term financial plans (strategic) serve as script in the preparation of the short term financial plans (operational), The short term financial plans are visualized in one period from one to two years, the long term plans already go from two to ten years these are basis of to proper financial management in an organization.

Already Ross et al. (1995) affirmed that financial planning should include some guidelines, such as the identification of the company’s financial goals, and an analysis of the differences between those goals and the company’s current financial situation, and a declaration of the necessary actions to be taken, so that the company achieves its financial goals. Thinking in this way, one observes that, initially an analysis of the financing options and investment that the company disposes of, should be made, as well as a performance evaluation related to the objectives established at the beginning of the financial plan.

Financial Management is a discipline dealing with the financial decisions corporations make, and the tools and analysis used to make the decisions. The discipline as a whole may be divided between long-term and short-term decisions and techniques. Both share the same goal of enhancing a firm’s value by ensuring that return on capital exceeds cost of capital, without taking excessive financial risks (Pandey, 2010).

According to (Moore and Reichert, 1989), financial management practices are defined as the practices performed by the accounting officer, the chief financial officer and other managers in the areas of budgeting, supply chain management, asset management and control. The most common financial management practices used are Accounting Information Systems (AIS), Financial Reporting and Analysis (FRA), Working Capital Management (WCM), Fixed Asset Management (FAM) and Capital Structure Management (CSM). All these practices are crucial for an efficient financial management in organizations.

The ultimate goal of financial management is to maximize the financial wealth of the business owner(s), which is achieved through an efficient financial planning process in an organization This general goal can be viewed in terms of more specific objectives: profitability and liquidity. Profitability management is concerned with maintaining or increasing a business’s earnings through attention to cost control, pricing policy, sales volume, inventory management and capital expenditures, Gitman, (2011).

Financial management refers to the concepts of time, money and risk and how they are interrelated. At the individual level, financial management involves tailoring expenses according to the financial resources of the individual while from the organizational perspective the process of financial management is associated with financial planning and financial control, when an organization has an efficient financial planning process the financial resources of the organization will be easily managed. Modern approach of financial management basically provides a conceptual and analytical framework for financial decision making. It emphasizes on effective use of funds. According to this approach financial management can be broken down into three different decisions: Investment decisions, Financing decisions and Dividend decisions (Brealey & Myers, 2007).

Proper financial planning ensures that the business’s obligations (wages, bills, loan repayments, tax payments etc) are paid therefore financial managers can easily take proper organizational decisions. McMahon (1995) also viewed growth as another objective of financial management in relation to liquidity, growth and profitability. Financial management also aims to maximize the share price in the securities market and enhancing long-term value of the firm.

Accounting information systems assist in the analysis of accounting information provided by the financial statements. Romney (2009) purport that the biggest advantage of computer-based accounting information systems is that they automate and streamline reporting. As pertains to Financial Reporting Analysis (FRA), recording and organizing the accounting information systems will not meet objectives unless reports from systems are analyzed and used for making managerial decisions (Gitman, 2011). Working Capital Management (WCM) refers to decisions relating to working capital and short term financing (Garrison, 1999). These involve managing the relationship between a firm’s short-term assets and short-term liabilities.

Failure in managing an individual’s finance can lead serious long-term consequences not only for that person but also for enterprise, society therefore financial planning is very important for an organization to reduce costs and maximize profitability, (Ismail et al., 2011).

Financial Planning

Planning involves the process of setting objectives, assessing assets and resources estimating future financial needs and making plans to achieve monetary goals. Management needs to ensure that enough funding is available at the right time to meet the needs of the business (Madison, 2014). In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit (IFAW, 2013). In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions. Financial planning is done in three ways, that is, strategic planning, budgetary planning and operational planning. Strategic planning is concerned with preparing long-term action plans to attain the organization’s objectives. Strategic planning is also known as corporate planning or long-range planning (Shelley, 2001).

Budgetary planning is concerned with preparing the short to medium-term plans of the organization. It will be carried out within the framework of the strategic plan. An organization’s annual budget could be seen as an interim step towards achieving the long-term or strategic plan. Operational planning refers to the short-term or day-to-day planning process. It is concerned with planning the utilization of resources and will be carried out within the framework set by the budgetary plan (Shelley, 2001). Each stage in the operational planning process can be seen as an interim step towards achieving the budget for the period. Operational planning is also known as tactical planning. Remember that the full benefit of any planning exercise is not realized unless the plan is also used for control purposes (Roe, 2004).

The budget expresses future plans in financial terms and it represents a firm commitment to the activities for which funds have been allocated. The budget is the key element in planning and performance measurement, (Henley et al, 2011). Donor support from international organizations plays an increasing role in developing countries towards the budget process and service delivery. Countries that emphasize broader local participation and accountability are apt attract more aid resources, (Mac Lure, 2009). In order to ensure that performance is constantly improved, national departments and provincial administrations need to outline their specific short, medium and long term goals for service provision (Powell, 2009).

He further argues for the need to provide annual and five yearly targets for the delivery of specific services. The objectives to be pursued therefore may include that of welfare, equity and efficiency, etc. It also means a complete change in the way that services are delivered. A shift away from inward-looking, bureaucratic systems, processes and attitudes, towards new ways of working which put the needs of the public first, is better, faster and more responsive to meet those needs, (Powell, 2009). The first and most important step to effective financial planning is developing and implementing a budget. The ability to budget effectively is a very important part of being a successful organization. A budget can be useful in setting standards of performance, motivating board and staff members, and providing a tool to measure results. Fulfilling the organization’s mission is the main goal, and budgeting makes it possible.

Financial planning in organizations is increasingly a key factor in overall performance. While many organizations understand that traditional financial planning is a component of financial management, many organizations have not embraced the need to fully computerized systems that integrate financial and capital planning with operational planning. Following the research carried out by the above authors, it may be argued that the role of computerized accounting information system in financial planning is a key factor for increased performance of an organization. The reviewed literature on the relationship between applications of computerised accounting in financial planning clearly underpins the need for financial planning to meliorate performance. That notwithstanding, financial planning has received numerous criticism on grounds that; it bears little or no relationship with the reality in improved performance of an organisation. This research is therefore purposed to gather respondents’ sentiments as regards the aforementioned issues.

INFLUENCE OF FINANCIAL MONITORING ON FINANCIAL MANAGEMENT

Financial Management on project performance will be one of the key challenges for corporations in the next decade: only those institutions that have sound financial structures and stable income flows will be able to fulfil their multiple missions and respond to the current challenges in an increasingly complex and global environment Anthony and Young (2003). Indeed, financial management is not an end in itself; it aims to ensure a organization‘s goals are reached by guaranteeing that the institution produces sufficient income to enable it to invest in its future. Unsustainable project operations can be accommodated for either by developing sustainable operations or by planning for a future lacking in resources currently required. In practice organisations mostly tend to aim towards sustainability by increasing efficiency in the way in which resources are utilised.

According to Habeeb, (2013) financial management is the operation of an internal control system. Financial management of projects must be actively managed; it is an important part of the project management process and should be reviewed by the project manager, financial team, stakeholders and key project team members regularly (Weick, 2005; Backström, 2004; Jensen, 2004; van Eijnatten, 2003). By keeping a close eye on the project budgets one will be assured that they are kept within the forecast set from the beginning.

A financial management systems has the following characteristics: Physical Control, authorization and Approval control, Personnel Control, Segregation of Duties, Supervision Control, Arithmetical or Accounting Control, Management Control, Organizational Control.

Financial management is one of the most important project management activities needed to ensure your project is delivered within the cost expectations laid down by the project’s definition (Cleland, 2009). Financial management like any form of control process is not about collecting and measuring how much cost you have expended on the project, and then simply looking at the budget and deciding what is left will ‘obviously’ finish the project (Bourne and Walker, 2003). Cost control success factors are based on good project control practices, which result in good cost and schedule outcomes thus success of the project Strogatz (2003).

Financial management checks under review in this proposal will include include: budgetting, banking and expenditure checks Strogatz (2003). Organizations are facing challenges regarding their budgeting in project management. Pressure to follow through with only the projects that are going to be successful and carry less risk is mounting. As a project manager one needs to keep budgeting queries and be aware of benefits at all times throughout the project(Bourne and Walker, 2003).

Good financial and accounting systems are paramount: it is essential that management has current, accurate, and relevant financial data to ensure sound decision-making. Internal controls should be robust and should be rigorously overseen Anthony and Young (2003).

Strong financial controls boost in the numbers being reported to management and help protect the organization’s assets. It is therefore necessary that financial controls are documented, assessed, revised, tested regularly and strengthened where necessary. A financial transaction control is a procedure that is intended to detect or prevent errors, misappropriations, or policy non-compliance in a financial transaction process.

Mawanda, (2008) suggests that strong financial and accounting systems point to accountability. Accountability needs to be accurate and timely to aid sound decision making.

It should be noted that IFRSs emphasize timely production and presentation of financial reports. The guideline is that financial statements should be produced and presented within three months after the closure of organization’s financial year. Thus financials of projects also need to follow suit.

According to World Bank(2013) annual report, Kenya is ranked the third largest recipient of the world bank funded projects. The World Bank’s portfolio in Kenya consists of 24 active national and eight regional operations with a total commitment of US$4.2billion. The projects are mainly focused on transport, energy, water, urban, health and social protection. In fiscal year 2013, the Bank has approved more than US$900 million for urban transport, the

Ethiopia-Kenya power interconnector, infrastructure finance and judicial performance improvement. The Bank has also leveraged nearly US$400 million in private investments through partial risk guarantees for private independent thermal and geothermal power projects to improve Kenya’s electricity supply. (www.worldbank.org.)

Relationship between financial management and financial evaluation

According to Jacobs (2001), financial management can be defined as the art and science of managing money; and finance in its broader sense is concerned with the process, institution, markets and instruments involved with the transfer of money. This author goes on to say that this is an area that requires knowledge, skills and experience and whose goals include: maximizing profits, sales, capturing a particular market share, minimizing staff turnover and internal conflicts, survival of the firm, and maximizing wealth. Performance measurement can be split into financial and non-financial measures.

Financial performance measurement generally looks at firms’ financial ratios (derived from their financial statements) such as liquidity ratios, activity ratios, profitability ratios, and debt ratios. Non-financial performance measurement is more subjective and may look at customer service, employee satisfaction, perceived growth in market share, perceived change in cash flow, and sales growth (Haber & Reichel, 2005).

In today’s globalized economy, companies are now not only competing and keep up with local competitors but foreign competitors too. This continuous international competition in business force companies to improve and change their company’s structure in order to survive and thrive. Companies have in many years tried to find ways to compete effectively with corporations worldwide and their desperate search for external and internal growth seek them to the lately merge and acquisition (M&A) activities which now are increasingly used worldwide. Since early 1900s, there have been some abnormal waves of mergers and acquisitions especially between American industries (Mantravadi and Reddy, 2008a). According to the 2007 research report by Boston consulting group, USA have completed over deals 4,000 between 1992 and 2006 (Mantravadi and Reddy, 2008a). These report figures suggest that merges and acquisitions might occur as a reaction to the period change in economy and industry such as changes in industry structure correlated to periods of restructure, changes in industries technological advances or deregulation (Jensen, 1993; Mitchelle and Mulherin, 1996).

According to McBride (2000), computerized packages can quickly generate all types of reports needed by management for instance budget analysis and variance analysis. Data processing and analysis are faster and more accurate which meets the managers need for accurate and timely information for decision making.

Frank wood (2011) consented to the speed with which accounting is done and further added that a computerized accounting information system can retrieve balance sheets, income statement or other accounting reports at any moment. He consented that computerized accounting information system allow managers to easily identify and solve problems instantly. Indira (2008) pronounced the improvement in business performance as a result computerization of the accounting systems as it is a highly integrated application that transforms the business processes with the performance enhancing features which encompass accounting, inventory control, reporting and statutory processes. He then says, this helps the company access information faster and takes quicker decisions as it also enhances communication.

McBride (2000) stated that managers cannot easily satisfy statutory and donor reporting requirements such as profit and loss account, balance sheet and customized reporting without using computerized accounting information systems. With the system in place, this can be done quickly and with less effort. Computerized accounting information systems ease auditing and have better access to required information such as cheque numbers, payments, and other transactions which help to reduce the time needed to provide this type of information and documentation during auditing.

According to Carol (2002), it is easy to do accounting functions using computerized accounting information system. Posting transactions to the ledger, the principle of double entry can largely be automated when done through the use of computerized accounting information system. Although computerized accounting information system is highly beneficial to an entity, it is worth noting that it is dogged with a couple of pitfalls some of which are shown as below;

Meigs (2009) stresses that there is a risk of improper human intervention with the computer programs and computer files. Employees in the organization may temper with the computer programs and computer based records for the purpose of deliberately falsifying accounting information. This may result into distortion of information that would be essential for decision making.

According to Wahab (2003), another threat and limitation of computerized system is the computer virus. Where a computer virus is a computer code (program) specially designed to damage or cause irregular behavior in other programs on the computer. The adverse effect is that it may lead to breakdown of the hardware thus leading to loss of valuable information (for instance in financial institutions information such as customers’ accounts, previous financial report, information pertaining loans advanced among others) already saved on the computer.

Evaluation is an integral part of a day-to-day management. It embodies the regular tracking of inputs, activities, outputs, reach, outcomes, and impacts of development activities at the project program, sector and national levels. Evaluation provides information by which management can identify and solve implementation problems and assess progress towards project’s objectives (Agbakoba & Ogbonna, 2004). Financial evaluation under the computerized accounting information system is focused on daily management issues. By monitoring the organization tries to assess whether activities are implemented effectively and efficiently. Data is collected and analyzed more or less frequently, according to a predefined timetable. It requires regularity and continuity with regard to the type of data being gathered and methodology used to analyze it (Awotokun, 2013).

Financial management is not a “once-off” matter; it is a course of action that is supposed to take place throughout the financial Year and it takes place within a particular framework or principle. The World Bank Report (2013:1) argues that a good financial management system is essential for the implementation of policies and the achievement of developmental objectives by supporting aggregate fiscal discipline, strategic allocation of resources and efficient service delivery.

The reviewed literature on the relationship between financial evaluation and performance of organisations clearly underpins the need for financial evaluation to meliorate performance. That notwithstanding, financial evaluation has received numerous criticism from serving officers at different levels on grounds that; it bears little or no relationship with the reality in the field, the desired output of most financial monitoring has been to provide implementation and evaluation of service delivered. This research is therefore purposed to gather respondents’ sentiments as regards the aforementioned issues.

Financial Monitoring

Computers help in preparing accounting documents like cash memo, bills, invoices and accounting vouchers. Here computerized accounting information systems have user defined templates which will provide faster, accurate entry of transaction and therefore all documentation and reports can be generated automatically. They also help in recording of transactions. Everyday business transactions are recorded with the help of computer software. Every account and transactions is assigned a unique code where the grouping of account is done at the first stage. This process simplifies the work of recording the transaction. Marivic (2009) argued that computerized packages minimize human errors in transactions recording as in the system there is the existence of reference of every transaction. Computerized accounting information systems also help in preparation of trial balance and financial statements. After recording of transactions, the data is transferred into ledger accounts automatically by the computer. Trial balance is prepared by the computer to check accuracy of records, with the help of trial balance; the computer can be programmed to prepare the statement of comprehensive income and the statement of financial position.

The influence of computerized accounting information systems on financial reporting has been linked to the benefits of applying computer systems while generating financial reports. The presentation of scheduled reports can be triggered and simplified and prepared at regular interval with ease (McRae, 2008). With the application of computerization, generation of financial reports will be easy since information can be easily generated and updated on a timely basis. With the substantial increase in the number of transactions and increase in the need for real time information, maintenance of accounting data on a real time basis has become essential. This is achievable using computerized systems hence promoting the quality of financial reporting. Carol (2002) says that computerizing business general ledger, payroll and other accounting tasks increases office efficiency. Computerized accounting information systems have also been credited for their quick processing speed and large storage capacity. Using computerized accounting information system, systems ensure up to date account balances are available at any time to aid management in decision making ( Lancouch, 2003). Computerization saves time on transaction hence leading to quality of financial reporting for instance timely, accurate and reliable information can be generated (Lewis, 2011).

The influence of computerized accounting information system depends on the end users satisfaction. Mihir (2002) stressed that higher end users satisfaction leads to a positive attitude towards using the satisfaction and in turn increases the voluntary usage of the system. Nash (2003) noted that the quality of accounting information and performance of the accounting systems is a great concern to management. A computerized accounting information system is a delivery system of accounting information for purposes such as providing reliable accounting information to users, protecting the organization from possible risks arising as a result of abuse of accounting data and system among others.

Van (2013) defines financial reporting as the process of presenting financial information or data about a company’s financial position, operating performance and its flow of funds for an accounting period. According to Frank Wood (2011), financial reporting is all about presenting useful information to users so that proper decisions can be made. His implication about financial reporting is that financial information should aid in the evaluation of amounts, timing and uncertainties of cash flows. Also financial reporting should furnish information about the entity’s economic resources, claims against those resources, owners’ equity and changes in the resources and claims. Indira (2008), emphasized that financial reports should provide information about financial performance during a period management discharge it’s stewardship responsibility to owners. It should likewise be useful to managers and directors themselves in making decisions on behalf of the owners.

He argues that accounting information system is very necessary if decisions are to be made accurately and rationally by the various interested parties or users of financial information. These are broadly classified into external and internal users. Where internal users include management and employees while the external users include donors, shareholders, creditors, government, competitors and general public. According to Carl’s et al (2011) the quality of financial reports depends on the intended users of the information and should be evaluated with respect to the needs of the users.

Federation of Accounting Standards Board (FASB) defined quality as a hierarchy of accounting qualities with relevance and reliability considered as the primary characteristics while representing faithfulness, verifiability, neutrality, comparability, consistency and understandability considered as secondary characteristics. Reliability, information is said to be reliable if it is free from material errors and bias and represents faithfully that is purports to represent emphasized Frank wood (2011).

According to Turner (2000), neutrality is the demand that accounting information should not be selected to benefit one class and neglect to other. Reliable information is verifiable, neutral and has representative faithfulness. Relevance is also a very important characteristic of quality. Frankwood indicates that financial information is relevant if it is capable of making a difference in decisions made by helping users to form predictions about the outcomes of the past, present and future events either to confirm or correct prior expectations. Comparability is another characteristic of quality information. Frankwood (2011) also stresses that users must be able to compare the financial statements of the enterprise over time in order to identify trends in its financial position and performance. According to Indira (2008), timeliness is also another important characteristic of quality financial information. This arises as a result of perishability of accounting information. To benefit users, financial information must be presented at the right time otherwise it loses relevance.

According to Pallai (2007) Understandability as a quality of financial reporting that enables users to perceive the significance of financial information. He argues that users are assumed to have reasonable knowledge of business and willingness to study and understand the information. International Accounting Standards Board adds that information should not be excluded on grounds that it may be difficult for certain users to understand. Therefore, with this segment, it is clearly understood that there is a role computerized system do in financial monitoring and reporting, however, it seems that a lot is required to be discovered inside BRAC Uganda that are not being highlighted by the above literature. This study thus, will endeavor to close such gaps.

Social Factors for example career attitudes and emphasis on safety

Social factors include the cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company’s products and how that company operates. For example, an ageing population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends such as recruiting older workers. Any applied trend tends to influence the financial position of any organization (Kotler, 2009).

Thus, within the external environment in Australia, social factors are perhaps the most difficult for marketers to anticipate. Several major social trends are currently shaping marketing strategies. First, people of all ages have a broader range of interests, defying traditional consumer profiles. Second, changing gender roles are bringing more women into the workforce and increasing the number of men who shop. Third, a greater number of dual-career families have created demand for time-saving goods and services (Gibson, 2011).

Today, several basic demographic patterns are influencing marketing mixes and organizations’ income generation through sales for example the U.S. population is growing at a slower rate, marketers can no longer rely on profits from generally expanding markets. Marketers are also faced with increasingly experienced consumers among the younger generations. And because the population is also growing older, marketers are offering more products that appeal to middle-aged and elderly markets (Nurul, 2013).

Economic Factors for example economic growth, interest rates, exchange rates and the inflation rate.

Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm’s cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy (Kotler, 2009).

Thus, as with the majority of the elements of organization’s external environment, the company must be efficient at monitoring the economic policy and learning how to react to it, rather than trying to manipulate it. Economic factors affect how a business market products, how much money a business operator can spend on business growth and the kind of target markets the operator will pursue (George, 2011). For instance, the 2007–2012 recession has drastically reduced the spending power of many people. During a time of inflation, marketers generally attempt to maintain level pricing to avoid losing customer brand loyalty. During times of recession, many marketers maintain or reduce prices to counter the effects of decreased demand; they also concentrate on increasing production efficiency and improving customer service (George, 2011).

Government Regulations (political factors) for example tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability

Political factors, affect or how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government` does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation (Kotler, 2009).

With globalization, the application of technology in Malaysia has increased, especially through foreign investment (Kassim, 2003). Changes in business environment in Malaysia arising from a market oriented economy and government policies that provide businesses with the opportunity for growth and profits, have made Malaysia a highly competitive manufacturing and export base.

Thus, all marketing activities are subject to state and federal laws and the rulings of regulatory agencies. Marketers are responsible for remaining aware of and abiding by such regulations. Some key federal laws that affect marketing are the Sherman Act, Clayton Act, Federal Trade Commission Act, Robinson-Patman Act, Wheeler-Lea Amendments to the FTC Act, Lanham Act, Celler-Kefauver Antimerger Act, and Hart-Scott-Rodino Act. Many laws, including privacy laws, have been passed to protect the consumer as well. The Consumer Product Safety Commission, the Federal Trade Commission, and the Food and Drug Administration are the three federal agencies most involved in regulating marketing activities (Foley, 2009).

However, government regulations in product development, packaging and shipping play a significant role in the cost of doing business and business ability to expand into new markets. If the government places new regulations on how business must package its product for shipment that can increase the unit costs and affect the profit margins. International laws create processes that your company must follow to get the product into foreign markets and this affects the business development process (George, 2010).

Technological Factors for example the technological tools applied, and the type of personnel required.

Every organization is located within a particular configuration of contingencies. It is dependent on the market and technological environment in which it operates its scale and diversity of operations, the technology applied to its work, and the type of personnel it employs. To achieve congruence, an appropriate design is the one which best suits it’s contextual and operational contingencies ( Moores and Yuen (2001). The management of organizations faces a challenge to reinforce the management accounting system, strategies and structures together in order to achieve competitive advantage and enhance performance (Moores and Yuen (2001).

According to Kassim, Md-Mansur and Idris (2003) globalization brings in new technology and makes a developing country open to greater competition. These changes may affect the choice of management accounting practice (MAP) in an organization and may also result in the need for the firm to reconsider its existing organizational design and strategies in order to fit with the changing environment. This argument is supported by Burns and Scapens (2000) and Shields (1997), who suggest that changes in environment cause changes in organizations, which in turn cause changes in MAP.

In the search to understand management accounting in competitive environments and advance technologies, change has increasingly become a focus for research. Many firms have experienced significant changes in their organizational design, competitive environments and technologies. Business environments exhibit a variety of structures and processes, including flat and horizontal organizational forms, multidimensional matrix structures, networks of “virtual organizations” and self directed work teams. When business organizations respond to challenges by embarking on a change management path, they are faced with choices of which one of the management methods, techniques, and systems would be most effective (Waldron, 2005).

The rapid growth in the creation and dissemination of digital objects such as accounting software has emphasized the speed and ease of short-term dissemination with little regard for the long-term preservation of digital accounting information. However, digital accounting information is fragile in ways that differ from traditional technologies, such as paper or manual accounting system. It is more easily corrupted or altered without recognition. Digital storage media have shorter life spans, and digital information requires access technologies that are changing at an ever-increasing pace.

While there are traditions of stewardship and best practices that have become institutionalized in the print environment, many of these traditions are inadequate, inappropriate or not well known among the stakeholders in the digital accounting environment. Originators are able to bypass the traditional publishing, dissemination, and announcement processes that are part of the traditional accounting path from creation to archiving and preservation of financial statements using manual accounting systems. But with the growth of technology and introduction of accounting packages, it is not easy for an accountant used in the traditional manual accounting to be effective enough in using computerized accounting system. Groups and individuals who did not previously consider themselves to be archivists are now being drawn into the role, either because of the infrastructure and intellectual property issues involved or because user groups are demanding it.

Summary of the Identified Gaps

Financial Management Accounting Change is not a uniform phenomenon. Consequently one might expect the causal factors of change to be varied and this has indeed been confirmed by management accounting researchers such as Kassim (2003), Moores (2001) Burns (2000). It is evident from them that both the external factors (environmental) and internal factors (relating to the organization concerned) have influenced the recent development of new financial management accounting systems and techniques. According to Kassim (2003), the potential change drivers are economic, social, political or legal, competition and technological factors. These drivers of change also indicate the differing roles which causal factors can have in the process of change. Change in environment also implies uncertainty and risk which create a demand for further management accounting change in the form of ‘non-financial’ measures. However, less attention has been given by researchers to the management accounting change process. For instance, Burns and Scapens (2000) observed that, “little research attention has been given to understanding the processes through which new computerized management accounting systems and practices have emerged (or failed to merge) through time”. In addition, the authors have failed to explain the situation in the organization under this study (BRAC Uganda). Therefore, the researcher seeks to carry out this study and find out the role of Computerized Accounting Information System on financial management of BRAC Uganda.

Financial Management

As presented earlier, performance may be an antecedent or an outcome factor of management accounting and organizational change. Prior studies show that there may be a link between performance and change. Low financial performance is said to be one of the reasons for the firm to change its management accounting and internal organizational factors to improve performance (Granlund, 2001; Laitinen, 2006).

Hoque (2005) used non-financial performance measures in evaluating organizational performance operating in an uncertain environment. He argued that traditional performance measures are unable to satisfactorily reflect firm performance affected by today’s changing business environment. Traditional measures which focus mainly on financial criteria such as return on investment or net earnings are narrow in focus, historical in nature and in many cases are incomplete (Hoque, 2001). It is argued that non-financial performance measures may enable a firm to address environmental change by clearly monitoring core competencies of the organizational process as well as creating greater efficiency throughout the organization and help managers to assess changes in their business environment, determine and evaluate progress towards the firm’s goals, and affirm achievement of performance. This argument is supported by findings from Baines and Langfield Smith (2003) which indicate that organizational performance is significantly associated with an increased reliance on non-financial management accounting information.

Profitability

There is strong empirical support for the association between management accounting practice and performance, with an increased use of non-financial information. For example, Baines and Langfield-Smith (2003) show that a greater reliance on non-financial accounting information resulted in to improved organizational performance. Chenhall and Langfield-Smith (1998b) found a greater use of advanced management accounting practices, such as quality improvement programs, benchmarking and activity-based management, in firms that placed a strong emphasis on product differentiation strategies, ultimately resulting in high profitability.

Productivity

Hoque (2001) suggest that in today’s environment of computerized manufacturing and fierce competition, organizations need a multidimensional performance measurement system that should provide continuous signals as to what is most important in their day-to-day activities and where efforts must be directed. Thus, for this study, multiple performance measures are used to measure performance in manufacturing companies because the use of traditional performance measurement alone is not enough to measure performance for organizations operating in highly competitive and advanced technology environments.

The business environment in a developing country differs from that within a developed country with regards to market size, access to manufactured inputs, human capital, infrastructure, volatility and governance. According to Tybout (2000), although some developing economies are quite large, most are not; the menu of domestically produced intermediate inputs and capital equipment is often limited; a scarcity of technicians and scientists also affects flexibility in the production process and the ability to absorb new technologies; infrastructure is relatively limited; macroeconomic and relative price volatility is typically more extreme; legal systems and crime prevention are also relatively poor; and corruption is often a serious problem. To ensure that productivity is adequate, all hindering factors need to be eliminated through the introduction of proper internal control systems using computerized accounting system.

Benefits of Computerized Accounting

Paper works are involved in manual accounting; all the accounting activities are carried out on paper manually and obviously, it takes much time and resources for the average business organization and most especially, a financial institution that still uses the manual system. Computerized accounting saves a lot of time where in, the employee has to record the transactions and all the other calculations would be carried out by the software either automatically or by a request. Magdalene M, (2010)

computerized accounting is not only speedy but also accurate. With a computer being used to collect data and change it into meaningful information that is used by management to make timely and effective decisions, the computer carries out the entire data processing through classifying, sorting, calculating, summarizing the data and production of reports, Birungi (2000).

With the manual accounting system, every record is on paper and in case of any uncertainties such as heavy floods, landslides and fire outbreaks, the useful data may all be lost, and yet with the computerized accounting system and the introduction of internet and networks in the information technology world, an easy backup and restoration system as well as the use of passwords to avoid unauthorized parties from accessing the data, keeps the information secure.

Some arguments may stress that manual accounting can be handled with cheap work force and resources and that it is reliable as it is done manually with minutes of observations Magdalene M, (2010). However, the level of competition in the business world of today is tight and even growing tighter day by day and if a business with an aim of being successful does not consider the aspect of time especially as far as decision making is concerned, then that business stands to lose.

Magdalene M, (2010) also argues that computerized accounting can actually handle thousands of calculations simultaneously and accurately as compared to manual accounting where by transactions are handled one at a time and even needs much time to do that as well as being characterized by human errors and mistakes in calculations which may eventually affect the final output of information and hinder effective decision making.

Summary of Identified Gaps

From the literature, it is suggested that organizational performance tends to be dependent upon the existence of fit between the use of organizational systems and the situational factors (Baines & Langfield-Smith, 2003, Hoque, 2004) provides evidence that a good match among organization’s environment, strategy and internal structures, and MAS may result in high organizational performance. As discussed previously, in contingency management accounting research, the fit of the relationship between the use of MAS and contextual variable is expected to have an influence on organizational performance. However, this has not been tested in previous management accounting change research (Baines & Langfield-Smith, 2003; Libby &Waterhouse, 1996). Therefore, this study explores whether an alignment between the change in MAS and the above factors might produce superior financial management performance.