The Effects of Employing Accounting Software On Business Performance

 

The effects of employing accounting software on business performance Vinz Patrick E. Perocho Jeselle B. Bagsican Jenerbie M. Donggo Abstract

The target of this paper is to inspect and investigate the effect of Accounting Software on business performance. The study examines and investigates the effects of utilizing AIS on the company's performance. The aftereffect of this study is relied upon to help the firm's owners and manager in understanding the significance of utilizing Accounting Information System (AIS) got from Accounting Accounting Software to accomplish accomplish performance performance.. Several Several attributes attributes like efficiency, reliability, ease of use, data quality, and accuracy impacted the utilization of  AIS, accordingly influencing the presentation of firms. Modern literature and the result of  this study show that these AIS attributes controlled by the accounting data like efficiency, reliability, ease of use, data quality, and accuracy effects affect the utilization of AIS and the company's performance. Past researches have shown that it is essential for firms to utilize AIS to guarantee the survival and sustainability of business in the increasingly competitive environment other than improving their business activities competency and effectiveness. This study is one of not many that could reveal insight on how the use of AIS affects the  performance of firms. In I n this study, the researchers suggest that dimensions of utilizing AIS are significant for improving the performance of business organizations. Background of the study

Today, accounting has come to hold onto a significant situation in its capacities in the  business world. Accounting assumes a fundamental part in the activity of a business organi org anizati zation on.. For For each business, business, it is substan substantia tiall that that the financ financial ial data data of the busine business ss activities are being stayed up with the latest and checked by the organization. Accounting includes different cycles, going from easy to mind-boggling and surprisingly troublesome. Organizations need to stay up with steady changes in information technology to keep up exceptionally precise and up-to-date accounting, legal records, and inventory (Igbaria et al., 1997). Because of the complexity of the accounting framework expanding susceptibility to errors and the growing volume of accounting transactions, a framework that could cycle and store accounting accounting informatio information n with sped up, huge capacity, capacity, and handling handling limit was required. To fulfill the increment interest for up-to-date and precise data, accounting programming, coor coordi dina nati tion on of acco accoun unti ting ng,, and and data data inno innova vati tion on was was ac acqu quai aint nted ed wi with th th thee worl world d (Wickramsainghe et al., 2017).  Numerous previous researches have appeared that accounting information system adopti ado ption on does does increa increase se a firm’s firm’s perfor performan mance, ce, profita profitabil bility ity,, and operati operations ons efficie efficiency ncy in Malaysia, Finland, Spain, Iran, and Pakistan (Saira et al., 2010; Gullkvist, 2002; Sajady et al.,2008; Kouser et al., 2011). New computer instruments and data society empowered the companies in Turkey to effectively use their accounting system in dealing with customers and suppliers (Esmeray, 2016). Cragg et al. (2002) and Chan et al. (1997) found that alignment of  IT strateg strategy y with with busine business ss strateg strategy y increas increased ed a firm’s firm’s perfor performan mance. ce. In an earlier earlier study, study,

 

Raymond et al.(1995) found that firms perform better with the alignment of organizational structure and IT structure. Research Aim and Objectives

The major purpose of this study is to assess the impact of using using accounting accounting software system on business performance. The specific objectives therefore are: (1) To examine the effect of Software Efficiency on the Performance of Business (2) To examine the effect of Software Reliability on the Performance of Business (3) To examine the effect of Software Ease of Use on the Performance of Business (4) To examine the effect of Software Data Quality on the Performance of Business (5) To examine the effect of Software Accuracy on the Performance of Business Research Questions

(1) What is the effect of Software Efficiency on the Performance of Business? (2) What is the effect of Software Reliability on the Performance of Business? (3) What is the effect of Software Ease of Use on the Performance of Business? (4) What is the effect of Software Data Quality on the Performance of Business? (5) What is the effect of Software Accuracy on the Performance of Business? Conceptual Framework Model Effects of Employing Accounting Software     

Efficiency Reliability Ease of Use Data Quality Accuracy

  INDEPENDENT VARIABLES

Business Performance

DEPENDENT VARIABLES

Hypothesis H1 – There is a significant relationship between the effects of employing accounting software and the business performance.

 

REVIEW RELATED LITERATURE

Urquía Grande, E., Pérez Estébanez, R. and Muñoz Colomina, C., (2011) researched on the relationship between the use of the Accounting Information Systems (AIS) by the Small Sma ll and Medium Medium Sized Sized Enterp Enterprise risess (SMEs) (SMEs) in Spain Spain on variab variables les Econom Economic ic Return Returns, s, Financial Profitability and Productivity based on empirical evidence. The study conducted using survey carried out among small and medium-sized firms to determine the extent that development and implementation of accounting information systems had taken place, and subsequently analysed using ANOVA analysis to ascertain the impact of introduction of AIS on firm’s firm’s perfor performan mance ce and produc productiv tivity ity.. The findin findings gs provid provided ed eviden evidence ce that that there there is a  positive relationship among the SMEs that use AIS for fiscal and bank management and  better performance measures and subsequently provides value added in accounting literature given the scarcity of works dealing with the relationship between the application and use of  AIS and performance and productivity indicators in SMEs in Spain. Ali, Omar and Bakar (2016) investigated the effect of Accounting Information System (AIS) on organizational performance and the moderating effect of organizational culture in the relationship between AIS success factors and organizational performance in Jordanian  banking sector. The study used four types of AIS success factors as the determinants  performance namely service quality; information quality, data quality and system quality. Data were collected with a structured questionnaire survey and analysed with PLS SEM technique. The findings revealed that service quality, organizational information quality and system are the significant AIS success factors for increasing performance. Thisquality study also evidenced that organizational culture helps increase performance by interacting with information quality, data quality and system quality. It can be inferred from this study that organizations involved in banking sectors can increase their performance by adopting and implementing AIS success factors along with practicing favourable organizational culture. Therefore, firms should cultivate a favourable environment so that employees feel happy which motivates them to work more devotedly with the organizations. The study The study by Ismai Ismaill an and d Ki King ng (2 (200 005) 5) fo focu cused sed on measu measuri ring ng th thee al alig ignm nmen entt of  accounting information systems (AIS) requirements with AIS capacity and then investigating whether this AIS alignment is linked to firm performance. The study was conducted using a mail ma il ques questi tion onna nair iree on nine ninete teen en acco accoun unti ting ng in info form rmat atio ion n IS ISSN SN:: 22 2289 8976 7615 15 Pa Page ge 5 ch chara aract cteri eristi stics, cs, da data ta from from 31 310 0 Smal Smalll an and d Medi Medium um Size Sized d Ente Enterp rpri rises ses (SME (SMEs) s) firm firmss in Malays Mal aysia ia was collec collected ted and analys analysed ed using using princi principal pal compon component ent analys analysis is and varima varimax x rotation with Kaiser normalization. The results indicated that a significant proportion of  Malaysian SMEs had achieved high AIS alignment. Furthermo Furthe rmore, re, the group group of SMEs SMEs with with high high AIS ali alignm gnment ent had achiev achieved ed better  better  organi org anisat sation ional al perfor performan mance ce than than firms firms with with low AIS ali alignm gnment ent.. The findin findings gs provid provided ed evidence of the importance of AIS alignment and deepened current understanding of the requir req uireme ements nts for account accounting ing inform informati ation on and te use of IT as an import important ant inform informati ation on  processing mechanism. More importantly, it opens up possibilities for further study of AIS alignment in SMEs, both in Malaysia and on a global basis. Ismail and King (2014) researched on the factors that affect the use of accounting information systems in factories, small and medium-sized Malaysian manufacturing firms with sample consisted of 214 companies that have accounting systems. The study also found out that the information systems of accounting work smoothly as they connect information from the top and bottom that help workers in companies to achieve their goals, in addition

 

using these using these system systemss will will enable enable compan companies ies to give give accura accurate te inform informati ation on to the relevan relevantt government agencies. RESEARCH METHODOLOGY

This section This section discus discussed sed about about the researc research h design design and method methodolo ology gy employ employed ed to conduct this research. Research Paradigm

This study will be guided by the positivism paradigm. Positivism is based on values of reaso reason n an and d va vali lidi dity ty an and d fo focu cuses ses on fa fact ctss ga garn rner ered ed from from th theo eori ries es an and d whic which h ca can n be measured empirically using quantitative methods. The positivist research approach assumes that only knowledge knowledge that is based on observations observations of the external external reality is valid (Phillips (Phillips & Burbules, 2000). Positivism also assumes that theories can explicate the relationship between dependent and independent variables and developed hypothesis to be tested and forecast the outcomes outco mes of the study. Therefore, Therefore, the effects of accounting accounting software software characteristic characteristicss have on the business performance will be able to explore by using positivism paradigm. Research Design

Explanator Expla natory y research research is concerned concerned with determining determining the causal relationship relationship between between variables (Zikmund & Babin, 2010). The purpose of this research is more on seek new insights and determining the causal relationship between variables based on exploratory and explanatory. It is exploratory because researcher is exploring the relationship of independent and dependent variables in an unstructured and informal manner collection of information and explanatory explanatory because because researcher researcher explained explained the impact impact of dependent dependent and independen independentt variables (Hair, Rabin, Money and a nd Samouel, 2003). Research Method

In this study, quantitative research approach will be adopted as it allows collecting more data to investigate the facts, testing theories and hypotheses. As a result, quantitative is more suitable to represent tested theories comparing qualitative method since researcher was unaware of essential variables to analyse and the sensitivity of data collection relating to the social soc ial settin settings. gs. Using Using this this method method allows allows researc researcher her to streaml streamline ine research research proble problem m to restricted variables and supports to understand the result of analyst (Creswell, 2003). This type of research is more object objective ive and reliable as the researcher researcher cannot cannot interpret the facts of  the research based on biased opinion. Research Instrument

The research will use close-ended questions in order to source information from responses. The questionnaire will structure in a five-point Likert format to extract the data or  inform inf ormati ation. on. A questi questionn onnair airee is a set of questi questions ons that are usually usually sent sent to the selected selected respondents to answer at their own convenient time and return back the filled questionnaire to the researcher. In this study, questionnaires will use to collect information from respondents. The reason for using questionnaires is because they cover a large sample at a low cost and give respondents adequate time to give well-thought-out answers.

 

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