The Impact Of Computerized Accounting System On The Success Of A Business Organisation

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Computerized Accounting System On The Success Of A Business Organisation


This research work will the be examining the impact of the computerized accounting system on the success of a business organisation using the United Bank of Africa (UBA)as a case study. It comprises of the general introduction, purpose and scope of the case study.

It also includes the view of authors, who in the past have dealt on the issues relevant and pertaining to the case study. The population of the study was partly on the customer and partly on the staff while the sample will be choosen out of the population. The data will also be collected through the questionnaire. In this age, computerized system is very important on the success of a business organisation in the whole world.

The analysis of data used in this project will enable one to appreciate the great importance impact of computerized accounting system of the organisation perfectly

Chapter One


1.1 Background of the Study

The computer has affected all area of human endeavours most importantly Accounting profession, Banking Industry, business organisation Engineering.

A computer according to the American Heritage Dictionary of English Language (1993) is defined as a device that compute specially an electronic machine that performs high speed mathematical or logical calculators and which assembles, stored, or otherwise process information derived from coded data.

Another further definition of a computer by the ‘Nigeria Banker (1988) described a computer as an electronic device which on receipt of an appropriate input is capable of processing the input according to a set of previously supplied instruction and making the out put available as desired. Equally the rapid organisational expansion and the futurist nature of the computer industry make computer literacy and computerization of banking operations a necessary aid to modern society, therefore computerized accounting system has led to supply of information which include the following attributes:

  1. Efficiency
  2. Accuracy
  3. Reliability
  4. Flexibility
  5. Effectiveness
  6. Responsiveness

The development of computer date back to the year 3000 Bc with the development of Abacus in 1962, Java developed the calculating machine as the first, Hollent in 1800 developed punch card that aided census data processing in 1994, Harvard College of Engineering developed the first automatic computer and was called IBM computer Leventhal (1988).

Computerization was introduced in Nigeria in 1970’s by the multinational enterprise like “UAC” which introduced computer into operation in 1976 with the acquisition of IBM/370/76 mainframe computers as well as several Bumoushs TULDC computers for data gathering UBA news (1981).

Computerization leads to some consequent problems such as elimination of some functions. Nigerian Banks still needs to adopt to enhance their operations and performance.

Promoting business operation through Technology innovation is directly related to improving Entrepreneurial performance. The advent of Technologies across the globe has altered the norm of the game and expectations of the new mode of economics activities. The norm of inter and transnational trading changed dramatically to admit the increasing number of financial transactions and trade-related activities that take place via the Internet and technologically assisted tools ( Sam, Hoshino and Tashir, 2012). Oladejo and Yinus (2014) observed that the basic indicator of modern day development in any society is the level of technological advancement and how it has contributed to Economy growth of a country. Hence, from this statement, one is able to identify how significant is computerized accounting system to entrepreneur operational performance. The traditional view of entrepreneurs record keeping suggest that it is a paper based and hand of the organization accountant to prepare the annual tax return. Porter & Millar (1985) mentioned in this competitive advantage, over the years, information technology had played a major role, changing the nature of business who knows its effects. With the introduction of new technology and more user friendly software, computerized accounting system (CAS) appears to reduce the problems in book record keeping practice. Furthermore, with the new and rapid financial information, new updates and changes will be available for others in making decisions. Smith and Wiggins (1991) argued that the use of accounting information could be linked to the success or failure of an Entrepreneur. In order to survive, Entrepreneurs need updated, accurate and timely accounting information (Lohman, 2000; Amidu and Abor, 2005). Accounting systems are responsible for analyzing and monitoring the financial condition of firms, preparation of documents necessary for tax purposes, providing information to support business purposes. Without such a system it will be very difficult for entrepreneurs to determine performance, identify customer and supplier account balances and forecast future performance of the business.

The primary purpose of an accounting information system (AIS) is the collection and recording of data and information regarding events that have an economic impact upon organizations and the maintenance, processing and communication of such information to internal and external stakeholders (Stefanou, 2006).In modern theories of growth and operational performance, technology innovation has taken the Centre stage through the introduction of PC-based Accounting Systems, both the computer hardware and the accounting software creating an opportunity for Entrepreneurs to adopt computerized accounting system. Entrepreneurs boost economic growth by introducing innovative technologies, products and services. Entrepreneurs accelerate structural change by replacing established, sclerotic businesses. Entrepreneurship is important to economic development. The benefits to society will be greater in economies where entrepreneurs can operate flexibly, develop their ideas, and reap the rewards. (Akande, 2005) linked entrepreneurs with Small and medium business organizations and defined it as the process of creating new organizations. In Nigeria 75% of the private sector is dominated by Entrepreneur of Micro, Small and Medium Enterprises (MSMEs) reiterating that Organized Private Sector (OPS) is the engine of growth and creator of wealth and employment (Akande,2011). Therefore the contribution of Entrepreneur to a nation’s economy cannot be overemphasized.

1.2 Statement of the Problem

For Businesses to survive in business he/she need to be conversant with accurate and timely accounting information. Accounting information is used to measure and communicate financial information of business in order to make proper decision, planning, controlling, coordinating activities of the business and also for the end users of the accounting information. Accounting information has an important influence to the business success of entrepreneurs. Majority of businesses do not maintain sufficient accounting records that are necessary in their decision making. Lack of access to capital and burden of high rate charges are partially the result of incomplete (or on) accounting records, and the inefficient use of accounting information. Poor record keeping and accounting information make it difficult for financial institutions to evaluate potential risks and returns (Akande, 2005). Amidu, Effah and Abor (2011) also opined that inaccuracy of reports, Frequent breakdown of the system, Inability of the system to support large volume of data ,Lack of constant supply of electricity, and Inability to fully comprehend and interpret the result are major challenges of implementing computerized by SMEs in Nigeria. Accounting is a critical application in corporations of all sizes, computer managers are hence caught in a no-win situation.

Businesses are encouraged to embrace new technologies or face obsolescence. Elliot and Elliot (2006) noted that different enterprises make use of computers for the preparation and management of their accounting information, but usually not to their full potential. It is therefore important that the research in Computerized Accounting System adoption is not limited to adopters and non-adopters, but the extent to which Computerized Accounting System influence business performance have to be explored. this study intends to examine the problems hindering implementation of computerized accounting system by business organisations and its effect on their performance.

1.3 Objective of the Study

The aim of this study is to access the impact of computerised accounting system on the success of business organisation.

The specific objectives are;

  1. To find out the relationships between computerized accounting system and business performance
  2. To determine the influencing factors for adoption of computerized accounting system by businesses in Nigeria.
  3. To discover the factors hindering the use of computerized systems by businesses in Nigeria.
  4. To investigate on how computerized system can lead to increase in efficiency of service.
  5. To identify how computerization can contribute to prevent or reduce the incidence of fraud on a business organisation

1.4 Research Hypotheses

Hypotheses one
  • Ho: There is no relationship between computerized accounting system and business performance.
  • Hi: There is a relationship between computerized accounting system and business performance.
Hypotheses Two
  • Ho: Computerized accounting system does not reduce fraud in an organisation
  • Hi: Computerized accounting system reduces fraud in an organisation

1.5 Significance of the Study

Since technology affords better ways of doing things, research is of great importance to the banking system. The significance of the study includes:

  1. To enable the employees to realize the importance of computer as a modern of working method
  2. To enable the banks know the immense potential of computerization in increasing productivity, efficiency and profitability.
  3. To enable people with inadequate knowledge to know the importance of computer and understand the conceptualization of it.
  4. To add to the literature in the field of computerization in the business organisation.

1.6 Scope and Limitation of the Study

This study is primarily concerned with the impact of computerized accounting system on the success of business organisation. This study covers UBA. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following.

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.7 Definition of Terms

Accounting System:

An accounting system is the system used to manage the income, expenses, and other financial activities of a business.


A business is defined as an organization or enterprising entity engaged in commercial, industrial, or professional activities. The term business also refers to the organized efforts and activities of individuals to produce and sell goods and services for profit.


The definition of computerization involves the process of taking activities or tasks not previously done on the computer and shifting them to being done on the computer.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to have a critical analysis of the impact of computerized accounting system on the success of a business organisation.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefit in addressing the challenges of the impact of computerized accounting system on the success of a business organisation.

5.2 Summary

This study aimed at having a critical analysis of the impact of computerized accounting system on the success of a business organisation. Five objectives were raised to guide this study. These objectives include: To find out the relationships between computerized accounting system and business performance, to determine the influencing factors for adoption of computerized accounting system by businesses in Nigeria. to discover the factors hindering the use of computerized systems by businesses in Nigeria, to investigate on how computerized system can lead to increase in efficiency of service, to identify how computerization can contribute to prevent or reduce the incidence of fraud on a business organisation

5.3 Conclusion

Based on the above findings pertaining to the objectives of the study the following conclusions are drawn.
The computer is fast, despite the fact that human beings have to prepare data for input to the computer and distribute the resulting information; the speed at which the computer processes this information has helped in internal control purpose. It is apparent that computers are diligent and reliable. Once a programme begins execution,operations become automatic and Disagree further human intervention is needed.

5.4 Recommendation

Going by the research findings, the researcher recommends the followings:

  1. Very strong clerical control over source data with good manual records to aid in preservation of accounting and auditing trail.
  2. Tracing may be used during compliance testing of application control specific transaction may be traced through an application.
  3. Frequent dumps of master files to guard against the risk of loss or corruption of data.
  4. A good logically facility in order to provide a permanent record of a main machine communication, which is vital in order to pressure accounting and audit trail.
  5. Competent person to operate he computer.
  6. Password control.

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