ABSTRACT
This study critically examined accounting information and its effect on company’s performance using
selected companies in Nigeria. This include changing from the manual accounting system to the
modernized and advance accounting information system which is much more faster and easier. To
achieve the objective of the study, 150 questionnaires where administered to the employees of selected
companies. The selected companies comprises of fifty (50) respondents each from three(3) companies,
and the data collected was analyzed using statistical package for Social Science(SPSS) to compute chisquare at 0.05level of significance. From the result of this study it was noted that although there were
other factors that affects organizational performance but majority of the respondents however agreed
that the availability of accounting information is the principle factor that aids company’s performance.
Therefore, the influence of accounting information is greatly and solely indicated as begin responsible
for the failure or success of a company’s performance. Accounting information should be greatly
adopted by small or big company so that it can show that there defect and also improve their
performance.
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TABLE OF CONTENTS
Title page………………………………………………………………………………………..i
Approval………………………………………………………………………………………………ii
Declaration…………………………………………………………………………………………..iii
Certification……………………………………………………………………………………..iv
Dedication……………………………………………………………………………………….v
Acknowledgement………………………………………………………………………………vi
Abstract…………………………………………………………………………………………vii
Table of contents……………………………………………………………………………………viii
List of Tables…………………………………………………………………………………….ix
CHAPTER ONE: INTRODUCTION
1.1 Background information of the study…………………………………………………………1
1.2 Statement of the problem……………………………………………………………….…….2
1.3 Objective of the study…………………………………………………………….…………..3
1.4 Research question…………………………………………………………………….……….3
1.5 Research Hypothesis………………………………………………………..…………………4
1.6 Significance of the study…………………………………………………………………………………………………….4
1.7 Scope of the Study……………………………………………………………………………………………………5
1.8 Definition of terms………………………………………………..…………………….…….5
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction……………………………………………..……………………………….……7
2.1.1 Accounting information system……………..…………………………………….………..7
2.1.1.1Function of Accounting information system..………………………………….…………8
2.1.1.2 Characteristics of Accounting Information system.………………………….…………..9
2.1.1.3 Types of Accounting Information ……………………… ………………….…….…….10
2.1.1.4 The Users of Accounting Information…………… ………………………….…………..11
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2.1.2 Information system……………………… ……………………………….……………..…12
2.1.3 Organizational performance……………………………… ……………….…………….14
2.1.4 System……………………………………………………………..………………………15
2.1.4.1 Open System…………………………………………………..…………………….…..16
2.1.4.2 Closed system…………………………………………………………………………..16
2.1.4.3 Relatively closed system…………………………………………………………………..16
2.1.5 Historical background of selected companies…………………….……………………….16
2.2 Theoretical framework………………………..………………………………………………18
2.2.1 The System Theory…………………….………………………….……………………….18
2.2.2 System Information Theory………………………………………………..…………..….19
2.2.4 Performance Theory………………………………………………………………….………20
2.5 Empirical analysis………………………………………………………………….……….21
CHAPTER THREE:METHODOLOGY
3.0 Introduction……………………………………………………………………….………..29
3.1 Research design…………………………………………………………………….……….29
3.2 Research population…………………………………………………………………………29
3.3 Sample and Sampling technique……………………………………………..……………..30
3.4 Research Instrument…………………………………………………………..…………….30
3.5 Validation and Reliability of Research instrument……………………….………………..30
3.7Data Collection Technique………………………………………………….………………..31
3.8 Data Analysis Technique……………………………………………………………….……31
CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND INTERPRETATION
4.1 Introduction to Data Analysis……………………………………………………….……..32
4.2 Test of Research Hypothesis………………………………………………………………46
4.3 Description of Research Instrument used…………………………………………………56
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4.4 Interpretation of analysis………………………………………………………..………….57
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings…………………………………………………………….…………62
5.2 Discussion of Findings…………………………………………………….……..…………62
5.3 Conclusion………………………………………………………………….…….…………63
5.4 Recommendation……………………………………………………………..…………….64
BIBLIOGRAPHY………………………………………………………………..……………..65
APPENDICES……………………………………………………………………..……………68
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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
In the past and even up till now accounting processes are done manually through the use of
separate ledgers to record financial transactions, it involves the use of books, supporting documents and
papers to prepare financial statement. In a sole proprietorship that is probably developing, there might be
minimal errors but for a large organisation, these errors are likely not to be easily detected or can be
unknown for a long period of time which could affect the company on the long run. Over the years,
through gradual changes, Accounting information system has been introduced which impacts the ways
in which accounts are been prepared now. Information system has changed the way accounting tasks are
processed; the green paper days are gone and businesses now have a centralized place where all
accounting transactions are entered and saved as there is no need for cumulating large and long columns
and searching for paper journals where an accounting computer software can perform all of these tasks.
Most organisations spend a huge amount of money on information system. As a result, this has
cause budget to increase overtime. The essence of information system on organisation is for them to
perform their work effectively. A major role that it plays is that it aids decision making in an
organisation.
Decision making focuses on the evaluation of two or more alternatives which leads eventually to
a final choice. Accounting information on the other hand deals with the process of identifying,
measuring and communicating economic information to permit informed judgments and decisions by
the users of the information.“Onaolapo and Odetayo (2012) identify accounting as the language of
business as it records all transactions of an individual firms or bodies that can be expressed in monetary
terms”. Professional accountants occupy very key and important position in the business world today.
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This makes accountants involved in the decision making process of a corporate organisation; the
decision is based on relevant financial information and non-financial information. The American
Accounting association defines accounting information system as a subset of information system that
produces many amounts of data that can be used by the decision makers within and outside the
organisation. Reliable, timely and correct accounting information plays a vital role in the management
decision making and information technology is important for accounting information system for proving
quality information.
According to Huber (1990), it was emphased that automated accounting information system aids
decision making for management of organisation. This simply implies that accounting information also
deals with accuracy and speed so as to make needed information available at an appropriate time and
manner.
This study is focused on the financial health performance of selected organisations and how the
adoption of accounting information system has affected company‟s performance.
1.2 STATEMENT OF THE PROBLEM
The implementation of accounting information system is to produce timely, relevant and
accurate information in order to aid organizational performance and to give an upper hand in the market
environment. Many companies are beginning to consider and adopt accounting information system for
their financial accounting and their reporting. However, as important and as useful as accounting
information system is, some companies are not even aware about this information system and some
organisations are not even ready to shift from the old accounting system to the new one. Also, improved
organizational performance of the company is not still achieved and their business activity decisions are
still unprofitable. This generate question which the research work seek to address such as; how has AIS
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help to improve the profitability? Does accounting information system even have any effect on
company‟s performance? To those organisations that have adopted accounting information system, Is
there any relationship between accounting information system and organizational performance?
1.3 OBJECTIVES OF THE STUDY
This research work aims at examining the effect accounting information has on company
performance.
The specific objectives are to:
i. To identify the relationship between accounting information system and the profit level
of the organization if any.
ii. To identify whether there is any relationship between Accounting Information system
and organizational performance
iii. To examine if accounting information system delivers accurate and timely information so
as to enhance the organizational performance.
1.4 RESEARCH QUESTIONS
The research questions which this study seeks to provide answers to are presented below:
Is there any relationship between accounting information system and the profit level of the
organisation?
Is there any relationship between accounting information system and organizational
performance?
Does accounting information system deliver accurate and timely information to enhance
organizational performance?
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1.5 RESEARCH HYPOTHESES
Hypothesis one:
Ho: There is no relationship between accounting information system and the profit level of an
organisation
H1: There is a relationship between accounting information system and the profit level of an
organisation
Hypothesis two:
Ho: There is no relationship between accounting information system and organizational performance.
H1: There is a relationship between accounting information system and organizational performance.
Hypothesis three:
Ho: Accounting information does not deliver accurate and timely information that enhance
organizational performance.
H1: Accounting information delivers accurate and timely information that enhance organizational
performance.
1.6 SIGNIFICANCE OF THE STUDY
Accounting information is defined as the process of identifying, measuring and communication
economic information to permit informed judgment and decisions by users of the information. This
research work will be very useful for the organisation as it reveals the relationship between accounting
information system and organizational performance and it also considers the profit level organisation
through its performance. This work will also assist academia and researchers in formulating more
theories and will serve as a guide for future research work also researchers will be able to benefit from
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the theoretical framework which will enhance understanding of the subject matter. Professionals in the
field of information technology will understand which AIS is needed for each or more appropriate for
organisations.
1.7 SCOPE OF THE STUDY
This study focuses on accounting information and its effects on company‟s performance which
was limited to few organisations. This study will therefore stress on how accounting information has
affected the performance of a company. The scope of this research work will be limited to the overall
objective of this research.
The period of study for this research work is 2015.
1.8 DEFINITION OF TERMS
i. Accounting: Accounting deals with the process of identifying, measuring and communicating
economic information to permit informed judgments and decision by users of the information.
ii. Accounting Information: This is an information system that produces many amounts of data
for use by decision makers both within and outside the organisation.
iii. Decision Making: Decision making is the process of identifying and choosing alternatives based
on the values and preferences of the decision maker.
iv. Financial Performance: This is the level of performance of business over a specific period of
time expressed in terms of overall profit or loss during that time.
v. Information System: This term refers to the collection multiple pieces of equipment involved in
the dissemination of information.
vi. Management Information System: This is defined as a computer-based system that provides
managers with tools to organize evaluate and manage department.
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vii. Organisation: These are group of people who come together to form a business together to
achieve a set objective.
viii. Organizational performance: These are the analysis of a company‟s performance compared to
goals and objectives.
ix. Profit: This is the money a business makes after accounting for all the expenses.
x. Return of investment: This is a way of considering profit in relation to capital invested
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