ABSTRACT
This study evaluates the relationship between ICT and accounting profession in Nigeria. The
research instruments employed in this study is a closed ended structured questionnaire
administered to the staff members of the selected companies. The data collected and gathered
from the research instrument employed, are analyzed using chi-square statistical tool, a nonparametric test used to determine whether a systematic relationship exists between two (2)
variables. The statistical package for social science (SPSS) was employed for the data analysis.
The result generated from the study, indicates that there is significant statistical relationship
between ICT and accounting profession in Nigeria. The study concluded that a positive and
strong relationship of ICT has an impact on accounting profession in Nigeria. ICT infrastructure
is the key to rapid economic and social development of a country, which has also impacted on
accounting profession in one way or the other. (Hajela, 2005).This finding is also in line with
Buseni James(2003) who found out that ICT use is correlated with workers skills suggesting that
firms that use high levels of ICT also employ more knowledge workers
TABLE OF CONTENTS
page
Title page —————————————————————————————————i
Declaration ————————————————————————————————-ii
Certification ———————————————————————————————–iii
Dedication ————————————————————————————————-iv
Acknowledgements —————————————————————————————v
Abstract —————————————————————————————————–vi
Table of Contents —————————————————————————————–vii
List of Tables ———————————————————————————————–xi
CHAPTER ONE: INTRODUCTION
1.1 Background of the study ————————————————————————- 1
1.2 Objectives of the Study ————————————————————————— 4
1.3 Statement of Research Problem —————————————————————– 5
1.4 Research Questions ——————————————————————————– 5
1.5 Research Hypothesis ——————————————————————————-6
1.6 Significance of the Study ————————————————————————-7
1.7 Scope of the Study ———————————————————————————7
1.8 Organization of the Study ————————————————————————–7
1.9 Operational Definition of Terms ——————————————————————8
CHAPTER TWO: LITERATURE REVIEW—————————————————— 9
2.1 Introduction ——————————————————————————————-9
2.2 Conceptual Clarification ——————————————————————————9
2.2.1 Information Technology ————————————————————————9
2.2.2 Accounting Profession ———————————————————————— 10
2.2.3 Information and Communication Technology ——————————————– 11
2.2.3.1 Information Technology Functions——————————————————11
2.2.3.2 Uses of ICT in Accounting Profession ————————————————-12
2.2.4.1 Human treats to Information Technology——————————————————13
2.2.4.2 Measures against Technology Fraud————————————————————-15
2.2.5.1 The Roles of Accountants in an Organization————————————————– 18
2.2.5.2 Types of Accountants —————————————————————————–20
2.3 Theoretical Framework——————————————————————————-21
2.3.1 Conveyance Theory ——————————————————————————–21
2.3.2 Technology Acceptance Theory —————————————————————-22
2.3.3 Information and Communication Theory ——————————————————21
2.4 Review of Empirical literature ———————————————————————-21
2.4.1 Summary of Review of Empirical Literature ————————————————–28
CHAPTER THREE: METHODOLOGY ————————————————————33
3.1 Introduction ———————————————————————————————33
3.2 Research Population ————————————————————————————33
3.3 Sampling and Sampling Techniques —————————————————————-34
3.4 Research Instrument ————————————————————————————34
3.5 Validation and Reliability of Research Instrument ————————————————34
3.6 Data Collection Techniques ————————————————————————34
3.7 Data Analysis Techniques ————————————————————————–35
CHAPTER FOUR: Data Presentation and Analysis———————————————–36
4.0 Introduction ——————————————————————————————–36
4.1 Data Analysis and Presentation ——————————————————————–36
4.1.1 Analysis of Demographic Characteristics of Respondents——————————–36
4.2. Analysis of Chi Square Statistical Test ————————————————————40
4.2.1 Test of Hypothesis One ———————————————————————–49
4.2.2 Test of Hypothesis Two—————————————————————————-50
4.2.3 Test of Hypothesis Three————————————————————————51
4.2.4 Test of Hypothesis Four —————————————————————————52
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Major Findings ———————————————————————–54
5.2 Conclusion———————————————————————————————–55
5.3 Recommendation ————————————————————————————-55
5.4 Contribution to Knowledge ————————————————————————56
Bibliography ——————————————————————————————57
Appendix 1 ———————————————————————————————60
Appendix 2———————————————————————————————61
LIST OF TABLES
No Tables Pages
1 Distribution of respondents by organization 36
2 Gender distribution of respondents 37
3 Marital status of respondents 37
4 Age distribution of respondents 37
5 Academic qualification of respondents 38
6 Professional qualification of respondents 38
7 How long respondents have spent in their respective organization 38
8 Respondents Department 39
9 Management level of respondents 39
10 The Organization uses ICT for its financial transaction 40
11 The implementation of ICT has helped to improve financial transaction report of
the organization
40
12 The use of ICT has enhanced the financial transaction process of the organization 41
13 Adoption of ICT has increased the efficiency of account and it staff member in
the organization
41
14 There is audit trail for all financial transaction performed in the organization 42
15 ICT implementation has enhanced timely financial report for business decision 42
16 Information reported are accurate and reliable for effective decision making 42
17 Frequent evaluation of the organization financial performance is made easy with
the use ICT
43
18 ICT directly affects the organization’s financial performance 44
19 Cost of ICT installation for accounting processes is high 44
20 : Maintenance cost of equipment is considerably high 45
21 Accidental destruction or loss of data by operator or software error might occur
anytime
45
22 Only Accountant with the technical expertise can use the automated accounting
system
46
23 There is uninterrupted power supply to ensure proper function of ICT 46
24 Accountants in the organization are ICT compliant 47
25 ICT skills is a requirement for employing accountant in the organization 47
26 Job performance of accounting staff without ICT skills are highly constrained 48
27 Information and communication technology enhances the company’s financial
performance
48
28 Accounting staff that lacks ICT skills are often redundant
29 Chartered Accountant in the organization have been certified through the
Technical Competence (TCI) of Institute of Chartered Accountant in the
Nigeria (ICAN)
49
1
CHAPTER ONE
1.1 BACKGROUND OF STUDY
Accounting is the process of identifying, classifying and recording, and presentation of financial
economic activities of an entity with the aim of facilitating decision making by the users of the
information. This process is usually done manually with the use of separate ledgers to record
financial transactions. It involves the use of paper, books and pen to record and prepare financial
statements and manual calculations. This task is tedious and time consuming and can therefore
lead to several human errors. This occurrence might be minimal in small entities such as sole
proprietorship. However, in big entities such as a public limited liability company, these errors
could occur more often without possibility of being detected which could affect the entity on the
long run.
There is no doubt that the manual system of accounting is cheaper than the automated accounting
system which is one of the reasons why small businesses still use it. But as a business grows,
there is a need for a shift from manual accounting of financial transactions to automated
processes i.e. Information and Communication Technology especially in today’s generation
where most transactions are performed with the use of electronic gadgets such as Computers,
Computer software and the internet. The Accountant only needs to enter the transactions into the
software which simply performs computations and presentation thereby relieving the accountant
of such task. Any company with large size seeking to be efficient and effective in it financial
operations would need to adopt an automated system of accounting. For a company to attain
efficiency and effectiveness, it would require capacity to process accurate and timely
information, hence, the need for Information and Communication Technology.
Information and Communication Technology (ICT) is often used as an extended synonym for
information technology (IT), but is a more specific term that stresses the role of unified
communications and the integration of telecommunications (telephones lines and wireless
signals), computers as well as necessary enterprise software, middleware, storage, and audiovisual systems, which enables users to access, store, transmit and manipulate information. ICT is
an umbrella term that includes any communication device or application, encompassing; ratio,
television, cellular phones, computer and network hardware and software.
Information technology has been around for a long time as long as people have been around
because there were always ways of communicating through technology available at that point in
time. There are four (4) main ages that divide up the history of information technology. These
ages include; pre-mechanical, mechanical, electromechanical and electronic only the latest age
i.e. electronic and some of the electromechanical age really affects us today.
In the recent past, before the inception of ICT, accountants of an organization were using a
socially acceptable behavioral method of reporting accounting and economic reports, carried out
during accounting year ends. Accounts prepared include statement of account, statement of
financial position, cash book, and statement of cash flow. The ICT, on accounting practice in
Nigeria has become a subject of fundamental importance and concerns to all business enterprise
and is gradually becoming a prerequisite for local and international competitiveness. It is obvious
that the way accountants plan and take decision on what and how to provide their service in the
accounting profession has been affected immensely by Information and Communication
Technology (ICT). This has continued to change the manner in which accounting practice and
their corporate relationships are organized worldwide and the variety of innovative device
available to improve and facilitate the speed and quality service delivery. A major ICT has been
made on accounting is the ability of companies to develop and use computerized system to track
and record financial transactions properly and accurately. The recording of business transaction
manually on ledgers, papers, spread sheets etc has been translated and computerized for quick
and easy presentation of individual financial transaction and give report on it. (Granlund &
Mouritsen, 2003).Shanker(2008)ascertains that the use of ICT in many organization has assisted
in reducing transactional cost, overcome the constraints of distance and have cut across
geographic boundaries thereby assisting to improve coordination of activities within
organizational boundaries. It is very clear that, the computerized accounting system have
improved the functionality of accounting departments by increasing the timeliness of accounting
information and report preparation of statement of cash flow, market shares report and
departmental profit&loss are now more accessible with computerized system.
Computerized accounting systems have internal check and balance measure to ensure that all
transactions and accounts are properly balanced before the financial statement is finally
prepared. It also will not allow journal entries to be out of balance when posting, ensuring that
individual transactions are properly recorded.
Since the inception of information and communication technology (ICT), accountants can now
process large amount of financial information and process it quickly through computerized
accounting system. Quicker processing time for individual transactions has also lessened the
amount of time needed to choose out each accounting period. Transactions that would have taken
an accountant months or years to prepare are done quickly and faster and thereby cutting high
cost that would have resulted in preparing the reports (Pricewaterhousecoopers, June 2008).This
study therefore seeks to examine the impact of Information and Communication Technology on
accounting practice in Nigeria. This study focused on the overall performance of accounting and
auditing firms and how the adoption of Information and Communication Technology impacts on
their daily operations.
1.2 STATEMENT OF PROBLEM
The manner in which accountants can potentially add value to economic entities and societies is
undergoing a metamorphosis. Accountant worth is now reflected in higher order critical-thinking
skills, such as designing, business processes, developing e-business, model in providing
independent assurance and integrating strategic knowledge. Hence, most companies have derived
a way of recording and reporting transactions. Accounting professionals are expected to take
advantage of ICT to automate existing processes for conducting business in new and innovative
ways. Growth within management accounting and information system is becoming prominent
with the advent of ICT. Enterprise Resource Planning(ERP)system, Software and ancillary
equipment such as Automated Teller Machine(ATM), Debitcards, Electronic commerce,
Computer hardware, Database, Internet, Intranet, Telecommunication, Oracle, Peachtress,
Accounting software and Statistical Package of Social Sciences etc. are related products
emanating from ICT. Information and communication technology is presumed to have affected
accounting profession positively in so manys,research in these areas have shown that ICT has
perceived importance due to its usage across several groups of business firms, especially in the
field of auditing.
This study seeks to evaluate the degree of ICT adoption by accounting professionals in the
preparation and presentation of financial reported accounts. To what extent are accountants
literate with the use of ICT? How relevant is ICT in today’s accounting profession?
1.3 OBJECTIVES OF STUDY
The primary objective of the study is to examine the impact of Information and Communication
Technology on accounting profession in Nigeria
The specific objectives of the study are to:
i) Assess the impact of ICT on financial transaction report of selected companies.
ii) Examine the effect of ICT implementation on the financial performance of selected
companies
iii) Evaluate the challenges associated with integration of ICT in accounting profession.
iv) Analyze the importance of ICT in training requirement of an accountant.
1.4 RESEARCH QUESTIONS
For the purpose of this study, the following questions have been put forth in line with the
statement of research problem;
i. To what extent has ICT impacted on the transaction report of selected companies?
ii. What are the challenges associated with adoption of ICT in Accounting
profession
iii. How has ICT improve the financial performance of the selected companies
iv. What are the importance of ICT in training requirement of accountants
1.5 RESEARCH HYPOTHESES
The following null hypotheses are formulated to be and tested in the research study:
Hypothesis One:
H0; ICT has no significant impact on transaction report of selected companies
H1; ICT has significant impact on transaction report of selected companies
Hypothesis Two:
H0; ICT has no significant impact on improved financial performance of selected companies
H1; ICT has significant impact on improved financial performance of selected companies
Hypothesis Three:
H0; There are no challenges associated€ with integration of ICT into accounting profession in
Nigeria
H1; There are challenges associated with integration of ICT into accounting profession in
Nigeria.
Hypothesis Four:
H0; ICT has no importance in training requirement of accountant
H1; ICT is important in training requirement of accountant.
1.6 SIGNIFICANCE OF THE STUDY
The efficiency of accounting practice and the factors that affect the use of ICT covers a wide
aspect; ranging from the profession, statutory and a host of several other factors but this work is
restricted to cover the impact within accounting practice and profession. The level of ICT
investment by companies obtained will help our result to be generalized of financial statement.
This study also serves as a guide for further research work in the impact of ICT on business and
finance. Findings from the study will also prove useful to students in the field of accounting.
1.7 SCOPE OF THE STUDY
The scope of this study is to evaluate the impact of ICT on accounting profession in Nigeria. The
research work adopts three (3) reputable companies in Abuja that have employed ICT in the
preparation and reporting of their financial structures. The companies are Federal Inland
Revenue Service Wuse Abuja, Adebola Sobanjo & Co Labour House Abuja and Trustfund
Pensions Labour House Abuja. The period of study is 2015.
1.8 ORGANIZATION OF THE STUDY.
CHAPTER ONE; This chapter comprises of the background of the study, statement of the
problem, objectives of the study, research questions, research hypothesis, significance of the
study, scope of the study, organization of the study and definition of terms.
CHAPTER TWO; critically review related literature, conceptual clarification and theoretical
framework relevant to the research study.
CHAPTER THREE; Examined the research methodology. It presents the research design, the
population, the sample size, the nature and source of data, the method of data collection, the
techniques of data analysis, the decision rule and the summary.
CHAPTER FOUR; Discussed data analysis which includes; data presentation, test of hypothesis
and the results of findings.
CHAPTER FIVE; this chapter gives the summary of findings and conclusion from the research
work. Recommendations, limitations of the study and suggestion for further research are also
presented.
1.9 DEFINITION OF TERMS
a.Information and Communication Technology(ICT):This to the automated means of
originating, processing, storing and communicating information and includes recording device,
communication system, computer system( including hardware and software component and
data)and other electronic devices(AIC PA 2006a, AU319.02).
b.Accounting information system (AIS): Is a system of collection, storage and processing of
financial and accounting data that is used by decision makers.
c.Enterprise Resource Planning (ERP): Is an integrated information system that serves all
departments within an enterprise.
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