IMPACT OF COMPUTERIZATION OF ACCOUNTING SYSTEM IN A BUSINESS ORGANISATION
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IMPACT OF COMPUTERIZATION OF ACCOUNTING SYSTEM IN A BUSINESS ORGANISATION
Chapter one
1.1 Introduction
Computers, as automated, sophisticated high-tech devices, have the potential to have a big impact on business professions such as accountancy.
In today’s world, accountants’ specialised knowledge and expertise are focused on gathering, aggregating, interpreting, and disseminating a wide range of accounting information required for effective day-to-day resource management.
The influence of computerising accounting systems in a company organisation can be assessed both positively and negatively, however the good effects far outweigh the negative effects.
1.2 Background of Study
Accounting methods have evolved dramatically during the previous few decades, owing primarily to changes in legislation and norms. Accountants go through various steps when preparing financial statements and other accounts.
The first is the reliance on international standards such as International Accounting Standards (IAS) and Financial Accounting Standard Board. In addition to establishing Statements of Accounting Standards (SAS), the Nigerian Accounting Standard Board (NASB) has two key tasks.
They are:
1. Ensure that financial reporting meets the legal requirements outlined in the Company and Allied Matters Acts of 1990.
2. To ensure that the financial statements and accounting are prepared in accordance with the 1984 International Standard (NASB). The accounting system of a company organisation is changing as new markets emerge, such as the growth of banking institutions and the formation of new newspapers.
These new establishments typically computerised their operations. Some of them used database management systems (DBMS), such as Newswatch magazine.
The use of computers results in a reduction in the time required to process data and produce output, easier access to store data, increased processing capacity without an increase in staff, and an overall improvement in the quality of management information, better management reports that are relevant to managers’ work, produced more accurately and on time as a result of the positive effects of computerization.
Coping with the consequences of computerization in accounting systems in a business organisation that has caused changes needs the inclusion of courses in data processing, system analysis, and design in the examination of most professional bodies such as I.C.A.N.
and C.I.M.A. In reality, in many firms where computers are widely utilised, accountants are sent for additional training in system analysis and design.
1.3 Statement of Problem
The strategic study of problems encountered by a computerised accounting system, which implies that the accuracy of these statements is critical to address because it influences the level of dependability and subsequent information utilisation.
The statement refers to how a computerised accounting system has been able to have an impact on the volume of work, the quality of services needed by clients, customer time savings, and changes in an organization’s cost, revenue, and profit.
1.4 PURPOSE OF THE STUDY
The goal of this project is to understand:
1. The effects of computerised accounting systems, how the computer has become relevant to the practice of accounting in a business organisation, in recording business transactions and financial events with the goal of creating financial statements and notifying them.
2. Describe the accounting procedure in use.
3. Explain the key accounting principles used.
4. Determine whether the good impacts of computerization and accounting systems in a company organisation outweigh the negative effects.
1.5 RESEARCH QUESTIONS.
At the end of this investigation, critical inspection and analysis must be given the following questions.
1. What are the positive and negative consequences of a computerised accounting system in a company organisation?
2. What impact has the computer had on the accounting system in terms of services, time savings, cost reduction, and revenue generation?
3. How can a computer function on:
(a) Trading, profit and loss account.
(b) Balance-sheet statements.
(b) Statements of sources and applications of the findings
4. What are the accounting practices at Guardian Newspapers Limited?
5. Are the good effects greater than the negative effects?
1.6 Hypothesis.
Ho: There is a favourable effect of computerising an accounting system in a corporate firm.
Ho: There is no good effect of computerising the accounting system in a company organisation.
1.7 Significance of the Study
Computers have definitely become a part of everyday life, yet some people perceive it as a negative force that is making more and more people lazy by replacing occupations and roles.
Despite these waves of criticism, its use has consistently raised the factors of production in an accounting business organisation. As with most professions, the use of electronic data processing in accounting has two sides:
1. One that threatens the professional in the area in relation to their roles.
2. The sides that show potential for the study problem.
1.8 Scope and limitations of the study
Accounting applications can be broadly classified into three (3) categories:
1. Financial Accounting.
2. Management/administrative accounting.
3. Additive Accounting.
However, due to time constraints and the need to provide detailed rather than surface treatment of the effects of computerised accounting systems in a business organisation, this study is limited to the Guardian Newspaper Limited’s financial and management accounting operations.
1.9 SUMMARY
The chapter addressed the introduction part of this research activity, highlighting issues such as the statement of problem, purpose of study, background of the study, scope and limitations, among others.
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