Research consultancy
The Evolution and Impact of Computerized Accounting Systems
Information systems have been integral to human society throughout history, though their form and function have evolved across different eras (Haigh, 2011). The advent of computer technology has revolutionized nearly every sector globally, particularly in business operations, both domestically and internationally. Since the 1950s, when computers began facilitating data storage and processing, organizations have been able to manage large volumes of data more efficiently, generate accurate reports, and enhance profitability (Kharuddin et al., 2010; Elliot, 1992; Porter, 1980; Fisher et al., 2000). Over the past five decades, major corporations have transitioned from basic manufacturing and service provision to utilizing sophisticated computerized accounting systems. This shift has strengthened contractual commitments between businesses, customers, and suppliers, underscoring the need for reliable and sustainable accounting solutions (Krappe & Kallayil, 2003).
Computerized accounting systems have significantly improved financial management, with research indicating that a firm’s financial performance is closely tied to its investment in and enhancement of these systems (Imeokparia, 2013). Manual financial reporting has been largely replaced by accounting software, enabling faster processing, easier storage, and improved accessibility of financial data (Kharuddin et al., 2010). Today, businesses that fail to adopt computerized accounting risk inaccuracies, reporting delays, and inadequate long-term data storage.
Globally, businesses rely on accounting to record, analyze, and report financial information. Historically, this process was manual, relying on paper-based ledgers and journals. However, technological advancements have transformed financial management, making accounting software indispensable (Osmond, 2011). In Africa, many companies traditionally employed accountants to handle bookkeeping manually, but today, both accountants and non-accountants increasingly prefer computerized systems for efficiency (Osmond, 2011). Studies have explored the impact of these systems in banking and SMEs, particularly in Nigeria, providing evidence of their benefits in financial reporting (Imeokparia, 2013).
While some small businesses in East Africa still use manual accounting, others are transitioning to affordable computerized systems. Both methods adhere to the same accounting principles, but computerized systems offer superior speed and data storage capabilities. Accountability, as defined by Birari and Patil (2014), involves justifying performance to stakeholders. Computerized accounting enhances this by ensuring timely, accurate, and reliable financial reporting (Vietnamnet, 2012).
An effective Accounting Information System (AIS) is critical for organizational management and internal control. Its benefits include improved decision-making, data accuracy, performance evaluation, and streamlined transactions (Borden, 2008). However, despite these advantages, some organizations struggle with system failures, data loss, and unreliable reporting (European Union Audit Report, 2003). Financial reporting remains a statutory obligation, providing stakeholders with essential insights into a company’s financial health through statements such as income reports, balance sheets, and cash flow analyses (Pandey, 2008; Saleemi, 2009).
Statement of the Problem
As technology advances, manual accounting systems have proven inadequate for modern decision-making needs (Brecht & Martin, 1996). Both public and private sectors worldwide recognize Computerized Accounting Information Systems (CAIS) as essential for efficient financial data processing, enhancing managerial decisions and strategic objectives (Manson, McCartney, & Sherer, 2001). However, despite adopting CAIS, BRAC Uganda’s Njeru Branch faces challenges such as:
- Financial losses
- Misappropriation of resources
- Data loss
- Inaccurate reporting
This study investigates the role of Computerized Accounting Inform
