The Effect Of Accounting Information System (Ais) On Organizational Productivity Of Firm
First Part
Introduction
1.1. Context 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 highlighted the importance of accounting information in economic and business discourse, particularly in relation to administrative effectiveness (C).
Accounting, as we all know, is the language of business because it records all transactions of a company or other entity that can be conveyed in monetary terms. Accounting is the scheme and art of accumulating, classifying, summarizing, and communicating data of a financial nature that is necessary for making economic decisions.
The transition from a single-entry system to a double-entry system has enhanced the efficiency of accounting over a number of years. The primary purpose of the accounting system is to provide financial data such as purchase, sales, expenses, and income to the organization. However, in today’s technologically advanced society, accounts maintenance is advantageous in numerous ways. Previously, accounting was used to determine the organization’s profit or loss, but accounting information systems are now also useful for increasing the organization’s profitability. Accounting information system is a delivery system for accounting. businesses involve transactions that generate data for improved analysis of business performance, and accounting information system is a delivery system for accounting.
Accounting Information Systems (AIS) are a tool that, when incorporated into the field of Information and Technology (IT) systems, was designed to aid in the administration and control of economic-financial aspects of businesses. However, the astounding advancement of technology has made it possible to generate and utilize accounting information from a strategic perspective.
Accounting information systems (AIS), as part of a company’s information systems (IS), are viewed as facilitating decision-making within organizations and should be tailored to the organization’s environment, task requirements, and organizational structure. A business uses an accounting information system to collect, store, manage, process, retrieve, and report its financial data for use by accountants, consultants, business analysts, managers, 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 accessible to those who have a legitimate need for it, all while maintaining the integrity and security of the data, which indirectly increases the organisation’s productivity and performance.
Moreover, the management of numerous organizations in Nigeria significantly relies on the information generated by the company’s AIS. In addition, quality reports are essential for determining the optimal investment, whereas the traditional method of recording, summarizing, and reporting company financial reports lead to less optimal decisions. Investing in dependable accounting systems has become a significant concern for all managers, as it improves management and performance analysis.
Accounting information systems are a component of the vast majority, if not all, financial management decisions made by diverse organizations. Each year, these decisions are worth billions of dollars in developed economies. In some instances, the decisions lack quality. Consequently, if researchers are able to enhance decision making through better information, society will reap the benefits.
Accounting Information System is regarded as one of the organization’s most essential systems. Its purpose is to provide essential information to administrators at all levels. This information assists them in effectively and efficiently carrying out their responsibilities in the areas of planning, resource management, performance evaluation, and decision making. Accounting Information Systems (AIS) are a tool that, when incorporated into the field of Information and Technology systems (IT), is intended to aid in the administration and control of economic-financial aspects of an organization. However, the astounding advancement of technology has made it possible to generate and utilize accounting information from a strategic perspective.
The main purpose of accounting information systems in any organization is to provide the business proprietor with information about the company’s profit or loss and financial position. This information is also beneficial to investors, auditors, suppliers, purchasers, banks, and other financial institutions, among others. However, accounting information is of greater concern to the individual within the organization. Since every decision involves multiple options. Accounting data must aid the user in determining his course of action.
1.2. Statement Of Problem
Currently, the majority of organizations continue to increase their budgets and expenditures on information systems. In addition, economic conditions and competition exert pressure on information costs. Typically, information systems are created with the aid of information technology to assist individuals in executing their duties. Consequently, the majority of organizations concentrate on developing information systems to support decision systems, communication, knowledge management, and numerous others. Accounting information system is the essential component of an organization’s information system for decision making.
In addition, the world and human existence have shifted from the information age to the knowledge age (Curtis, 1995), and knowledge has become the most valuable asset. In actuality, knowledge is not impersonal like money, nor does it reside in a book, a database, or a computer program (Choe, 1996). Choe believed that knowledge is always embodied in a person, taught and acquired by a person, and utilized or misapplied by a person. The accounting information system is a tool for efficient administration and management that is objective. Inadequate accounting information system jeopardizes administrative efficacy, resulting in managerial malnutrition, particularly in the Nigerian construction industry. This has resulted in the current distressed syndrome confronting the majority of Nigerian businesses. In order to survive and compete in the “knowledge society,” Huber (1999) emphasized that businesses must learn to manage their intellectual assets (i.e., knowledge). In fact, knowledge management is focused on the exploitation and growth of knowledge assets.
However, it is difficult to predict how the increasing demand for accounting information systems will affect the organization’s productivity and performance, given that accounting information systems provide a foundation for an organization to interact with its vendors, customers, and employees. Due to the fact that the majority of businesses have not implemented improved accounting information systems into their daily operations, a number of issues must be addressed. As accounting provides monetary and transaction-based business information.
Based on the fact that financial accounting is one of the social sciences whose purpose is to serve the diverse needs of private and public business facilities, it is influenced by the general economic, social, legal, and political conditions prevailing in each country or certain environment at each time period. In the economic, social, legal, and political environments in which accountancy operates, there are a variety of environmental factors that influence the accounting information system.
On the basis of these hypotheses, this study intends to investigate the impact of accounting information quality on organizational performance.
1.3. Objectives Of The Study
This study’s primary objective is to investigate the impact of accounting information systems on the performance of Nigerian organizations.
Other specific goals to be attained include:
1). Determine the impact of the accounting information system on the productivity of the organization.
2). Examine how Accounting information systems facilitate improved managerial decision-making.
Determine the function and prospective contribution of accounting information systems to tax computations.
Identify the obstacles facing the accounting information system’s implementation.
Determine the extent of managers’ knowledge and perception of accounting information systems.
Determine the contribution of the accounting information system to the managerial decision-making process regarding organizational effectiveness.
1.4. Research Question
The research query provides a framework and guidelines for comprehending the research study’s substantial knowledge.
The research query includes the following:
What impact does the accounting information system have on the productivity of an organization?
How does the Accounting information system lead to improved managerial decision-making?
The function and prospective contribution of accounting information systems to tax computations.
What challenges hinder the accounting information system’s implementation?
How knowledgeable and perceptive are managers about accounting information systems?
How effective is the accounting information system in influencing the managerial decision-making process towards organizational effectiveness?
1.5. Statement Of Hypothesis
To test hypotheses, they are stated in the null form:
HYPOTHESIS ONE
There is no correlation between accounting information systems and the performance of an organization.
HYPOTHESIS TWO
There is no correlation between accounting information system instruments and the organization’s financial performance.
1.6. The Importance Of The Study
An accounting Information system is a well-organized, effective method for providing accurate financial data and controls. The design of an effective accounting system is heavily influenced by regulatory requirements and internal administration policies. Consequently, accounting systems display the accounts, records, vouchers, files, and related supporting data generated by the accounting process. It involves designing the flow of documents and transactions throughout an organization.
In terms of determining the benefits accruing from the incorporation of accounting information systems into the operations of construction companies and other businesses in the same industry, this study is of utmost importance. This allowed the construction industry to evaluate the model’s potential for enhancing organizational efficacy. The study is beneficial to other researchers who are interested in the problem under investigation because it has laid the groundwork for future research on the subject.
This study will be of great value to the management of various organizations, companies, accountants, auditors, economists, financial analysts, and other users of financial or accounting information. It will provide them with a better understanding of the importance of an Accounting Information System, its key characteristics, advantages, and types, as well as its impact on organizational performance, productivity, and profitability. It will also educate the general public on the advantages of its application.
The research would provide a theoretical foundation for firms’ successful adoption of accounting information systems. It would provide practical guidance for the implementation of accounting information systems in small and medium-sized businesses, as well as empirical and practical contributions for organizations applying accounting information systems to their operations effectively.
Finally, this study will be of great importance to schools and students, and it will serve as a resource for future scholars who wish to conduct additional research on the topic.
1.7. Scope Of The Research
Conceptually, the investigation focuses on the indirect impact of accounting information system on organizational performance in the construction industry.
In light of the extensive coverage, the researcher concentrates on the effects of it on organizational productivity in the construction industries of Oyo Metropolis, utilizing a case study of construction company employees.
1.8. Limitations Of The Study
As with every study, there are limitations that must be acknowledged.
The following are the study’s limitations:
Due to its complex structure, we had difficulty generating sufficient research material to expedite the project’s completion.
Since the sample is drawn from a single state in Nigeria. Because of this, the findings and analyses of various organizations vary marginally.
Transportation constraints: this is also a limiting factor, as there are insufficient funds to transport to the location of the case study, and this may not be sufficient to yield the intended results.
1.9. Definition Of Terms
1. Accountant: An accountant is any individual who possesses a professional license to practice accountancy from a recognized professional organization and has the legal capacity and authority to perform the responsibilities of accountants in taxation and audit practice.
Financial statement
A financial statement (or financial report) is a formal record of a business, person, or other entity’s financial activities. In addition, it provides information about a company’s position and performance, including its assets, liabilities, equity, income, expenses, and cash flow.
3. Accounting Information Technology
Accounting Information Systems (AIS) are a tool that, when incorporated into the field of Information and Technology systems, is intended to aid in the administration and control of economic-financial aspects of an organization. El Louadi (1998) notes that the rapid development of technology has enabled the generation and utilization of accounting information from a strategic perspective.
4. Accounting Applications
Accounting software is a program that records and processes accounting transactions within modules such as accounts payable, accounts receivable, payroll, and trial balance. It constitutes a component of the accounting information system.
5. Internal Auditing
Internal controls are a set of rules, policies, and procedures implemented by an organization to provide reasonable assurance that its financial reports are accurate, operations are effective and efficient, and activities comply with applicable laws and regulations.
6. Accounting
Accounting is defined as the process of identifying, measuring, and communicating economic information to enable users to make educated judgments and decisions.
Profitability
Profitability refers to the capacity to generate profits over an extended period of time. Profits have diverse meanings to various individuals. Profit is also occasionally considered shareholder return.
Organizational performance
Daft (1983) defined organizational effectiveness as “the extent to which an organization achieved its goals.” Nonetheless, Mondy (1990) aptly defined it as “the extent to which an organization produces the desired output.”
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