Effect Of Accounting Information Systems On Organisational Performance (A Case Study Of First Bank Nigeria Plc Ogwashi-Uku Delta State) 

Effect Of Accounting Information Systems On Organisational Performance (A Case Study Of First Bank Nigeria Plc Ogwashi-Uku Delta State)

Abstract

The study examined the effect of accounting information systems on organisational performance(a Case Study Of First Bank Nigeria Plc Ogwashi-Uku Delta State). Two theories were used in the study to have a wide scope in the research, namely; the Contingency Theory and the Design of Accounting Information System and the Technology Acceptance model (TAM).The sample of the study comprised staff and management of First Bank Nigeria Plc Ogwashi-Uku Delta State. Primary data was used in the study. A structured questionnaire was used to collect necessary data from the selected staff and management of First Bank Nigeria Plc Ogwashi-Uku Delta State. The purposive sampling technique was used to select two hundred (200) staff and management of First Bank Nigeria Plc Ogwashi-Uku Delta State. In furtherance, twenty (20) staffs were selected per each enterprise selected. The data collected are subjected to the quantitative analysis of descriptive statistics and chi-square technique. Findings of the study indicated that accounting information system has significant effect on the sales growth of first bank in (value of chi-square is 6.48, and the critical value of chi-square is 5.74 at 5% level of significance and 4 degree of freedom); accounting information system has significant effect on the asset growth of first bank (value of chi-square is 9.79, and the critical value of chi-square is 7.59 at 5% level of significance and 5 degree of freedom).The study concludes that accounting information system has significant impact on the sales and asset growth of first bank.The study suggests amongst others that, First bank should improve their accounting system in order to generate quality, reliable and timely accounting information, Owners of First bank should integrate accounting information system in their decision processes, First bank should endeavor to consult accountants regularly in order to be able to maintain high and generally acceptable accounting practices, Accounting training programmes for First bank should be organized by the Lagos State Ministry of Trade, Commerce and Industry for those who do not know the importance of maintaining accounting records to come to grips with it, Government should stipulate the minimum number of books to be kept by all First bank that meet certain criteria which certifies them to operate in Nigeria, First bank should ensure that the cost of acquiring AIS does not outweigh the benefits the company would gain from using them.

Chapter One

Introduction

1.1 Background of the Study

The emerging global economic scenario characterized by advancement in information technology, rapid changes in production processes, increased sophistry of the consumer, fierce market competition and unethical skimming activities of producers in the drive to survive the unpredictable and complex business dynamics, has brought to the fore the crucial role of accounting information in economic and business discourse especially in relation to administrative effectiveness (Curtis, 1995).

As we all know, accounting speaks the language of business as it records all transactions of an individual firm or other bodies that can be expressed in monetary terms. Predicated on the going concept, accounting is the scheme and art of collecting, classifying, summarizing and communicating data of financial nature required to make economic decisions.

Over several numbers of years the performance of accounting has increased right from the single entry system to double entry system. The main aim of the accounting system is to provide financial data like purchase, sales, expenses and income of the organization but in today’s modern world accounts maintenance is helpful in many ways. Previously accounts are maintain to know profit or loss of the organization but now a days it is also useful for increasing profitability of the organization by way of accounting information system. Businesses include transactions which produce information for better analysis of business performance and accounting information system is a delivery system for accounting.

Accounting Information Systems (AIS) are a tool which, when incorporated into the field of Information and Technology systems (IT), were designed to help in the management and control of topics related to firms’ economic-financial area. But the stunning advance in technology has opened up the possibility of generating and using accounting information from a strategic viewpoint.

Accounting information systems (AIS) as a part of company’s information systems (IS) are seen as facilitating decision making within organizations and should be tailored to an organization’s environment, requirements of task, and structure. An accounting information system is a structure that a business uses to collect, store, manage, process, retrieve and report its financial data so that it can be used by accountants, consultants, business analysts, managers, chief financial officers(CFOs), auditors and regulatory and tax agencies.

In addition, specially trained accountants work with AIS to ensure the highest level of accuracy in a company’s financial transactions and recordkeeping and to make financial data easily available to those who legitimately need access to it, all while keeping data intact and secure, this indirectly boost the productivity and performance of the organization.

Furthermore, Management of various organizations in Nigeria relies heavily on information generated from the AIS employed by the company. Moreover, quality reports are keys to arrive at an ideal investment, and a traditional way of recording, summarizing and reporting company financial reports led to less optimal decisions. Investment in good and reliable accounting systems has become a major concern for all managers as it leads to better management and analysis of firm’s performance.

Accounting information system is an ingredient in most, if not all, financial managerial decisions for various organization. In developed economies, these decisions are worth billions of dollars each year. In some cases, the decisions are lacking in quality. Consequently, if researches can improve decision making through improved information, society will benefit.

The Accounting Information System is considered to be one of the most important systems of any organization. Its objective is to provide necessary information to the managers at different levels. This information helps them in discharging their responsibilities in an effective and efficient manner in the areas of planning, resource control, performance evaluation and decision making. Accounting Information Systems (AIS) are a tool which, when incorporated into the field of Information and Technology systems (IT), are designed to help in the management and control of topics related to organization’ economic-financial area. But the stunning advance in technology has opened up the possibility of generating and using accounting information from a strategic viewpoint.

Finally, the main purpose of accounting information system in any organization is to give information about profit or loss and financial position of the business to its owner. This information is also useful to investors, auditors, suppliers, buyers, bankers and other financial institutions etc. But more importance of accounting information is concern to the person within the organization. Since every decision involves a number of alternatives. Accounting information must help the user to decide his course of action.

1.2 Statement of the Problem

Currently, most organizations continue to increase spending on information system and their budgets continue to rise. Moreover, economic conditions and competition create pressures about costs of information. Generally, information system is developed using information technology to aid an individual in performing their job. Therefore, most organizations focusing on the developing of information system in order to support decision system, communication, knowledge management, as well as many others. The key part of information system needed for decision making in organization is accounting information system.

More so, the world and human life has been transformed from information age to a knowledge age (Curtis, 1995), and knowledge has been recognized as the most valuable asset. In fact, knowledge is not impersonal like money and does not reside in a book, a data bank or a software program (Choe, 1996). Choe believed that knowledge is always embodied in a person, taught and learned by a person, used or misused by a person. Accounting information system is an unbiased tool for an effective administration and management. Poor accounting information system jeopardizes administrative effectiveness, which makes managers malnourished administratively especially in Nigerian construction industry. The consequence of this has been the current distressed syndrome that most Nigerian companies are facing. Huber (1999) stressed that companies must learn to manage their intellectual assets (i.e. knowledge) in order to survive and compete in the ‘knowledge society’. Indeed, knowledge management is concerned with the exploitation and development of the knowledge assets.

However, there is uncertainty in predicting how growing need for accounting information system will change the productivity and performance of the organization since the Accounting information system provides a base to an organization, to deal with its vendors, customers and employees. The fact that the most Businesses has not incorporated the use of better accounting information systems in their day to day transactions, a number of issues need to be addressed. As accounting gives business information in terms of transactions and in monetary terms.
Based on the fact that the financial accounting is one of the social sciences which aim to serve various needs of the private and public business facilities, it is affected by the changes of the general economic, social, legal and political and political conditions prevailing in each country or certain environment at each period. The accounting information system is resulted by certain requirements which change due to various environmental factors within the economic, social, legal and political environments in which the accountancy works. It is on these premises that the study wishes to examine the effect of quality of accounting information on the organization performance.

1.3 Objective of the Study

The broad objectives of the study is to examine the Effect Of Accounting Information Systems On Organisational Performance (a Case Study Of First Bank Nigeria Plc Ogwashi-Uku Delta State). The specific objectives are to:

1. To determine the effect of AIS on sales growth.
2. To determine the effect of AIS on asset growth.

1.4 Research Questions

1. What are the effect of AIS on sales growth?
2. What are the effect of AIS on asset growth?

1.5 Research Hypothesis

The following hypothesis were formulated:

H01: AIS has significant effect on sales growth.

H02: AIS has significant on asset growth.

1.6 Significance of the Study

A good accounting information system operated in a company is an indispensable aid to effective management. It assures management of the reliability of decision taken by them and that these decisions are in accordance with goals to be attained. The research work will create great awareness to the management of the firms or various businesses or other managers, the importance of appropriate, complete and reliable set of records using accounting information system for such purpose as quick, correct decision making and effective planning and control of activities of their business.

To the employees and consumers, it will help them to assess the ability of the business to produce goods and render services on continuous basis and pay salaries. The research will be of benefit to the government in terms of tax collection and the regulation of business activities.

Lastly, the study will contribute to the body of the existing literatures on the topic, hence it will be of used to the prospective researchers.

1.7 Scope of the Study

Conceptually the study hovers around the implicit effect of accounting information System on organizational performance in the construction sector.

In the light of broad coverage, the study would limit itself to the effects on organizational productivity in the banking industries in Delta state using staff members of First Bank Nigeria Plc Ogwashi-Uku Delta State as a case study.

1.8 Limitation of the Study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing to the nature of the discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work.

1.9 Definitions of Terms

Accounting:

It’s the systematic process of recording, communicating, summarizing, analyzing and reporting of financial information.

Accounting Information:

This refers to the system of storing, processing of financial and accounting data that are used by decision makers.
Accounting information system: it’s defined as a computer based system that increases the control and enhance the cooperation in the companies.

Small Scale Businesses:

This refers to a generally privately own business that employs a small number of workers and does not have a high volume of sales.

Medium Scale Enterprises:

This refers to the typically result from the slow and steady growth that results from a successful small business

Sales Growth:

This is the amount by which the average sales volume of a company’s products or services has grown, typically from year to year.

Assets Growth:

This is a corporate events associated with asset expansion.

Ethical Values:

The set of established principles governing virtuous behavior.

Effective Accounting Systems:

An effective accounting system is a type of system that is accurate, useful and timely. Its purpose is to provide information for external entities, such as tax agencies and investors, and for internal purposes, such as evaluating efficiency and profitability.

Human Resources:

It is used to describe both the people who work for a company or organization and the department responsible for managing resources related to employees.

Investment:

It is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future.

Financial Statement:

Financial statement is the formal record of the financial activities of a business, persons or other entity. It also provide information about the regarding the position and performance of the business such as its assets, liabilities, equity, income, expenses and cash flow.

1.10 Organizations of the Study

The chapter one consist of the introductory part of the study which includes the study background, the statement of the research problem, the study objective and scope of the study.

The second chapter is a critical review of other literatures relevant to the study and its objectives including the theoretical framework for the study. While the third chapter is methods of data collection, sampling and data analysis used in conducting the study. The fourth chapter centres around the research findings including an analysis of how it relates to previous findings. The fifth chapter consists of the summary of findings, conclusion and recommendations base on the study objectives.

Chapter Five

Summary, Conclusion and Recommendation

5.0 Introduction

This chapter summarizes the findings into the effect of accounting information systems on organizational performance (a case study of first bank Nigeria PLC Ogwashi-Uku Delta state).

5.2 Summary of Study

The broad objectives of the study is to examine the role of accounting information system and the growth of small and medium scale enterprises. It determined the effect of AIS on sales growth.it determined the effect of AIS on asset growth. The sample of the study comprised staff of first bank Nigeria PL. Primary data was used in the study. A structured questionnaire was used to collect necessary data from the selected staff of the first bank Nigeria PLC. The purposive sampling technique was used to select two hundred (200) staffs from first bank Nigeria PLC. The data collected are subjected to the quantitative analysis of descriptive statistics and chi-square technique.

5.3 Conclusion

Findings of the study indicated that Accounting Information System has significant effect on the sales growth of first bank Nigeria PLC. Accounting Information System has significant effect on the asset growth of first bank Nigeria PLC. The study concludes that efficient AIS ensures that all levels of management get sufficient, adequate, relevant and true information for planning and increases the control and enhances the accounting performance in first bank Nigeria PLC also provide an opportunity to update procedures and align them with perceived examples of best accounting performance and improve strategic effort of first bank Nigeria PLC and improve data sharing and integrity. Conceptually, the study indicate the performance of first bank Nigeria PLC vary with the choice of the AIS they adopted. The study indicates also that the previous literature investigated factors that influence the use of AIS in first bank Nigeria PLC. Many organizations use AIS aiming at collecting more information to assist decision making performance which will eventually lead to improve efficiency and firms’ profitability and performance there. Studies showed that first bank Nigeria PLC that acquire extensive AIS resources are able to create competitive advantage.

5.4 Recommendation

The study recommends amongst others that

1. First bank Nigeria PLC should improve their accounting system in order to generate quality, reliable and timely accounting information.
2. Owners of First bank Nigeria PLC should integrate accounting information system in their decision processes
3. First bank Nigeria PLC should endeavor to consult accountants regularly in order to be able to maintain high and generally acceptable accounting practices.
4. Accounting training programmes for banks should be organized by the State Ministry of Trade, Commerce and Industry for those who do not know the importance of maintaining accounting records to come to grips with it.
5. Government should stipulate the minimum number of books to be kept by all SMEs that meet certain criteria which certifies them to operate in Nigeria.
6. Banks should ensure that the cost of acquiring AIS does not outweigh the benefits the company would gain from using them.

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