THE IMPACT OF ACCOUNTING INFORMATION SYSTEM IN THE BUDGETING BUSINESS ORGANIZATION. (A CASE STUDY OF UYO CITY POLYTECHNIC)

THE IMPACT OF ACCOUNTING INFORMATION SYSTEM IN THE BUDGETING BUSINESS ORGANIZATION (A CASE STUDY OF UYO CITY POLYTECHNIC)

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Accounting and budgeting is the bedrock of any business organization in the twenty-first century Via Uyo and its environs

To this end no business organization can thrives well in any location without proper budgeting and accounting process. Before any business is established, there must be some measures put in place for planning, controlling organizing and co-coordinating for such organization records are kept in all department such as cash record, inventory purchasing, sales records etc. and these cannot take place without proper budgeting as they are vital documents concerning any organization. The danger of carrying files around sometimes lead to loss of document due to termites, fire disasters, cockroaches, business before the advents of technology known as Accounting Information System (AIS).

In recent years, the firms started changing faster and faster front of globalization technology part of this changing is an Accounting Information System in the budgeting of business organization, any change depends on data and information to improve an international Accounting Information System or to make it more successful business should collect high quality data which will lead to high quality of information about any organization, these information will be the way to planning, controlling, and making right decision. Indeed Accounting Information System (AIS) is vital to all organization Borthick and Dark 1990, Curties 1995. Rahinam et al 1998, Wilkinson 1998, Wilkerson 2003. Accounting Information can be used to translate these different dimensions into a common financial dimension.

Accounting Information uses formalized categories collecting and reporting information that creates a common language which members of the organization can communication formulization permits the transmission of information with flower symbols, codes and this facilitates the co-ordination such as finance, cost, sales, quality, management plant maintenance, service management and human resources to the decision making process. However Accounting Information is also an input representation of the underlying decision problem since not all aspect involved can be qualified perfectly in financial numbers Galbranth 1973.

Accounting Information System may help managers to understand their tasks such as one of the information gatherer or transaction – oriented role, to one of the information analyst or business – oriented role (Convanlund and Lukka 1998, Hunton 2002). More clearly and reduce uncertainly before making their decision (Chong 1996). We take about uncertainly as a lack of information compared to what decision makers need to make a decision (Galbranth 1973), and the less manager are able to predict the outcomes from their actions, the more uncertainty there is.

The decision to centralize or outsource part or all of the accounting functions is business involves strategic decisions as well as practical consideration. The reason for organization considering this are prantly to do with cost and reporting process (Chin et al, 1995). But also relate to improving the strategic accounting budgeting function an issue currently of growing importance to business organization (Collier and Gregory 1995). This raises issues for on-site management concerning the extent of and responsibility for the control they undertake. If accounting processes are taken out of the unit, then there may no longer be a need for on-site financial controller, and hence operational managers may have to take some responsibility for control issues. This raises issues about the perceived skilled of managers and the extent to which the controller is viewed as an advisor to the business as well as processor of accounting data.

George H. Bodnar, and William S. Hopwood (2001) discussed various factors involved in financial control over computer-based Accounting Information System in the budgeting business. And described the nature of management decisions elaborate on the types of decision that managers make, describe various reports used for management planning and control. Indeed, wide variety of people within and outside the organization uses Accounting Information for decision making (Raliman and Halladay, 1998, Renam and Grabsici 1987). Business organizations like any sector need to apply Accounting Information System by improving the quality of services by planning, controlling and making decisions by managers so that new technology plays an important role to cover and record wide range through the impact of Accounting Information System in the budgeting business in planning, controlling and decision making processes in the case of organizations.

 

 

1.2   STATEMENT OF THE PROBLEM

Existing literature have shown that accounting information system when successfully implemented brings about better budgeting in the business organization by managers, more effective internal control system, enhances the quality of financial reports and facilitates financial transaction processes.

However, the studies have not shown whether successful implementation of accounting information system can improve budgeting in an organization and also the performance measures thereby creating a research gap.

Moreover, the study have shown a situation where economics are well developed. The researcher therefore seeks to bridge the gap so created in the field of accounting  information system and also determine whether the values of accounting information system identified whether the values of accounting information system identified in this studies are applicable Uyo City Polytechnic situation.

 

 

1.3   OBJECTIVE OF THE STUDY

The overall objective of this study is to evaluate how accounting information system is used in an effective budget preparation in an organization. And to determine whether management relies on the accounting information system  in the course of making effective budgeting. And some of the objectives include:

  1. To find out if there is any relationship between the management and accounting information system in an organization.
  2. To know how environmental variables affect accounting information system and decision making success in the organization.
  3. To identify if accounting information system and planning affect management success.
  4. To know if the level of efficiency derived using accounting information system on budget preparation favourable.
  5. To know if management variables affect accounting information system success.

 


 

1.4   RESEARCH QUESTIONS

The following questions were mapped out to be answered in the course of this study. They were:

  1. Is there any relationship between the management and accounting information system in an organization?
  2. Is there any way of knowing how environmental variables affect accounting information system and decision making success in the organization.
  3. Does accounting information system and planning affect management success?
  4. Does management variables affect accounting information system success?

 

1.5   RESEARCH HYPOTHESIS

An hypothesis is the tentative answer to research problems. In order to achieve the above purpose, the research made the following hypothesis.

       


 

Hypothesis One

H0: There is no relationship between the management and accounting information system in an organization.

H1: There is a relationship between the management and accounting information system in an organization.

Hypothesis Two

H0: There is no way of knowing how environmental variables affect accounting information system and decision making success in the organization.

H1: There is a way of knowing how environmental variable affect accounting information system and decision making success in the organization.

 

1.6   SIGNIFICANT OF THE STUDY

This study shall be of immense important to users of accounting information system (AIS) such as financial analyst financial accountant, management Accountant, financial managers, managing directors, etc. within an organization it shall help to provide immense benefit.

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