The Role Of Computer On The Accounting Profession

Project and Seminar Material for Accountancy / Accounting

The Role Of Computer On The Accounting Profession


Abstract


This study deals with the role of computer to the accountant it is carried out to investigate the various way in which computer effects the accountant. We also talk about the basic ways the computer has being of benefit to the discussed. The problems that are usually encountered as a result of the introduction of computer in accounting and other field were also discussed. Like in chapter one, this deals with the introduction of the research work. Chapter two, the review of related literature drawn from the textbooks, articles, newspapers and journals were shown. Chapter three deals with the statement of the methodology used for the research study. Chapter four deals with data presentation, analysis and it subsequent interpretation from the research work, conclusion was drawn and recommendations were made. These were done in chapter five. Due to the extensive usage of technical terms there is the need for the definition of terms.


Chapter One


Introduction

There has been a lot of observations and comments on the effect of computer as it relates to the accounting profession in Nigeria. Which determine whether computers does have effect on the accounting professional and how it perform task with maximum speed and accuracy which will make the job of the account staff a lot easier. Also they are underutilized, despite the immense benefits derivable from their optimum utilization of computer system.

With the advent of computer-based accounting system, accountants have to cope with the resulting complexity of the flow of information through the accounting systems.

Traditional accounting procedures did not accommodate the sophisticated processing devices that came with the computer-based accounting system.

Furthermore, the traditional accountant was not trained in the special languages and devices used in the computer based system. Therefore in the course of the study, efforts will be made to establish the effect of computer on the accounting profession.

Finally, I have the confidence that he efforts expended in this study will be a worthwhile investment. This is further strengthened by the fact that this study will serve a springboard and basis for further studies on the relationship between the computer and the accounting profession and other related topics in the future.


1.1 Background of the Study

The company Asaba Aluminum limited company was established in June 1981 in Asaba delta state. it is located at km 11, Asaba-Benin road. There certifications number is ISO9000/9001/9004/19011:2000.

They produce and market aluminum such as long span, setlines, crimp and flashing roofing sheet and cookware.

They company have total number of employees resulting to 51 to 100 people which comprises of senior management, management assistants and Non-management staff.

Non-management is sub-divided into three (3) senior supervisor skilled and unskilled workers. The technical employees comprises about 55% of staff at the management level and 70% at non-management.

Changes that brought about this research is to establish the various forms of accounting operations in which computers could be utilized.


1.2 Statement of Problems

This recent development has made the accountant to hire the services of a computer expert for audit purposes. Does the computer displace the accountant with a computer scientist?

Sometimes, the auditor looks frustrated watching the computer as a fast being which perform the job of an accountant and selfishly stores them on magnetic tapes as invisible magnetized spots, in addition to this problems, the electronic accounting systems are usually designed by systems analyst and programmers. Who are in most cases non accountants? This makes the accountant a stranger to the system he/she is to audit, unlike in a manual system.

Furthermore, the accounting information processing procedures are stated in computer programs which are written in special computer languages and stored on machine-sensible medium. Where on-line integrated systems are in use, audit trail may not be in existence.

How can all these problems of the computer are surrounded so as to return accountants and make them offer more qualitative job to the firm and the public in general instead of the computer scientists or economists with computer knowledge. These are the problems the study shall be focused at.


1.3 Objective of the Study

Main Objectives

The study aimed to assess the role of computer on performance of accounting by focusing on Asaba aluminum company PLC.

Specific Objectives
  1. To assess extent of adoption of computer in accounting
  2. To assess performance of accounting after adoption ofcomputer
  3. To identify the effect of adoption of computer in accounting
  4. To identify challenges facing adoption of computer in accounting

1.4 Research Questions

The analysis of these problems of this research work will raise certain important questions, which the researcher intends to prepare to answer.

  1. Does computer perform the task maximum speed and accuracy that will make the job of the account staff a lot easier?
  2. Is a computer a threat to the accountant?
  3. Is computer an aid to the accountant?

1.5 Significant of the Study

This study “The role of computer on the accounting profession” ( A case of the Asaba Aluminium company, Delta state) will educate the entire public how computer aids the accounting profession.

The world is fast turning into a global village with the rise of satellite communication, the internet and specialized software in very competitive financial environment. This study is significant in that it mains at increasing the awareness of our leverage on computerization. If the company’s financial market must be further opened and stay competitive and profitably so, the computer technology might just hold the key.

Firstly, the study will not seek to justify the huge amount invested in computer, but also try to show the reward and meaningful development or improvements in terms of times saved, less clerical and laborious manual entries from the use of computers than any other mechanical automated machines.

Secondly, it will help immediate and future computer users in accounting to understand the basic operations of a business enterprise. Therefore, they need to be introduced to the fundamentals of computers and electronic data processing, wide range of hard-ware and soft-ware that process of computer programming and the high level programming languages that are utilized by the computer-using business firms. However, and more importantly they need the basis concept.

Finally, in recent times, there has been increased demand in the knowledge and application of the computer for processing data has become necessary in the face of unique position that computer occupies today in organizations with which most calculations and data processing are handled.

Such a lot of the accounting boarder-some processing large volumes of data, there is need therefore, to find out in the study the various benefits associated with the use of computers in accounting.


1.6 Scope of the Study

The study is carried out the role of computer on the accounting profession so as to educate the entire public on how computer aids in accounting work, using Asaba Aluminium company, Delta state as a case study.

This research work is expected to last for the period of one year precisely 2013.


1.7 Limitation of the Study

This research would have given a wider coverage if not for some constraints imposed on the research by the availability of the time and fund.

1. Lack of research materials:

Inadequate facilities in the library such as modern textbooks, Journals, Newspaper magazines and other materials almost thwarted the effort of the researcher. These materials are supported to be a pre-requisite for successful project work.

2. Finance:

This constant was the most serious of all. It restricted the number of journeys made to my research centre to collected data which led to narrowness of the scope of the study.


1.8 Definition Of Terms

(A) Computer:

Computers are electronic machines which under programme controls. Can accept data, process the data and give out accurate information with regard to that set of data.

(B) Programme:

Is a set of instructions which feel a computer in logical sequences on how to solve a given problem. These instructions are written by programmer.

(C) Accounting System:

Is defined as the collection of method basis and principles adopted by an organization for the preparation of its financial statements to satisfy the need of the users.

(D) Operating System:

The permanently held programmes which control the sue of applications programmes and provide standardized facilities to the facility.

(E) Hardware:

This refers to the six physical element making up the computer e.g. backing storage, arithmetic and logical unit, immediate access stores, input device, output device and control unit

(F) Software:

These are programmes that inject life if not systems or set of instruction and data which feeds the computers hardware with what actions to take.

(G) Main Frame Computers:

These are large general purpose computers with extensive processing storage and input and output capabilities.

(H) Mini-Computers:

These are physical small compare with main frames and tends to be used for special purposes or small scales general purposes

(I) Micro Computers:

These are relatively low cost computers used by a single user.

(J) On-Line:

These refer to the peripheral devices or equipment that are in direct communication with the central processing unit of the computer. It is the opposite of off line.

(K) System Analysis:

It is the process of studying the operations of an organization with the intent of defining data processing problems and designing a system that can be applied to the computer.

(L) Computer Program:

A computer program is a set of computer instructions which are used for solving a specific problem.


Chapter Five


Conclusion and Recommendation

5.0 Discussion of Major Findings from the Study

5.1:1 The use of a computerized accounting system on performance of accounting

The study showed that the AACs (computer study) actually make use of a computerized accounting system. This is evidenced by the results given by the respondents in agreement with the use of the system in the AACs. Where the uses of a computerized accounting system are; the system’s ability to perform data entry, data processing, data security and data reproduction or reporting such as the generation of financial statements, water billing, payroll report. All these functions of the system have enabled the AACs to run its operations smoothly in a much more effective and efficientmanner.

5.1:2 The pros and cons of computerized accounting system on performance of accounting

According to the findings from the study, a computerized accounting system is of a great importance to the running of the AACs but is also associated with its own weaknesses that sometimes hinder efficiency in the AACs business environment. The most prominent values of the system being: ability to carry out automatic financial auditing and transaction balancing, easy communication, user friendliness, speed and the time saving factor. With all these values at hand, it is clear that the system actually performs its operations very well as far as guaranteeing effectiveness and efficiency of business operations is concerned.

The irregularities of the system however, count in as well. These majorly include risks of system failure and eye strains among others. Most of these weaknesses of the system can actually be combated easily in order to reduce on the business risks that may come up as a result. For example, system failure can be solved through consistent upgrading of the system and the aspect of eye strains can be controlled by avoiding long working hour on computers and operation through working shifts.

5.1: 3 To establish the qualities of payroll reports generated by a computerized accounting system.

From the findings, payroll reports generated through computerized accounting are mainly consistent, reliable and material among other qualities. These most prominent qualities of financial reports generated through computerized accounting make the system much more unique to the manual accounting system especially where accuracy in payroll calculations and reliability in reporting count. It is one of the strongholds as to why most of the respondents prefer a computerized accounting system to the manual accounting system. With this in mind, it is worth to recommend a computerized accounting system for business operations especially in of the financial nature as compared to the outdated manual accounting system.


5.2 Overall Findings

From the findings summarized above, it indicates that adoption of computer in accounting practices has both, positive and negative roles. The positive roles include; simplification of payroll processing, timely preparation of payroll, accuracy of payroll and traceability of payroll deductions. The negative roles include; risk of fraud and requirement of additional training for users and additional costs.


5.3 Recommendations

  1. From the findings and summary, the researcher recommends that first and fore most, the AACs needs to acquire a computerized accounting system that suits the organizational needs, enough resources needed to be saved for a tailor made software and system analyst need to be consulted in this importantissue.
  2. There should also be routine system maintenance programs put in place so that the system can get rid of shortfall such as viruses, fraud among others that may affect the system operations, this should be done so that the system can operate to the expectation of management and otherusers.
  3. On the management point of view, it is important that staff for handling transactions are trained so as to improve on the accuracy and speed in posting. With increased improvements and versions of accounting packages, staff needs constant and continuous training by the authorized dealers of the packages so that they remain well acquainted with the knowledge and experience of the package. In addition to the training, it is important to constantly appraise the staff to check which staff is failing the system as regards reporting unbiased financial information.
  4. The AACs needs more internal audit reviews to appraise and check the strength of the instituted controls within the system. The computerized accounting system is prone to fraud in computers where physical computer is involved. Without internal audit reviews, there may arise computers of ghost worker’s fraud that may pass unnoticed. It is therefore important external auditors come in once in a while to do audit.
  5. There is a need to increase the security levels in the internal control system. Management needs to ensure that requisitions are authorized; cheque payment, vouchers and other source documents are approved. On recording, it is important to have a clerk to enter the data which is then updated yet by another person preferably one with more experience and expertise. Management can also consider the option of using a networked system linking all the system in the finance, accounting and Human Resources department. This is because the current system uses standalone personal computers. In this way, errors and fraud possibilities are minimized thus improving on the quality of financial reports.
  6. vi. The accounting staff should rotate regularly in different accounting section by doing so it will be difficult for person to be tempted to commit frauds by using the knowledge and experiences he / she has in a specific section
  7. vii. Although there is accuracy and speed in transmitting information concerning payroll between other departments and payroll section the management should keep updating with new informationtechnology.

5.4 Areas of Further Studies

There is need to explore whether it is only the qualitative characteristics that determine the quality of payroll performance reporting or if there are other factors. If there are, such factors also need to be established. More research should be carried out about how the computerized accounting system can be run alongside the manual system. It is generally accepted that the computerized system alone is very vulnerable. Therefore, there is need to investigate how the two systems can be used concurrently, and perhaps a research to establish the role of management in promoting the quality of payroll performance reporting in AACs will be a great contribution to the Society.


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