CHAPTER
ONE
1.1 Background
To The Study
Accounting is the process which records
classify and summarize transactions and events of a financial nature and the
interpretation of its results ICPA (1953) . It is also referred to as an
information system which measure, process and communicates a firms financial
information N .con (1978) . The innovation of information technology has
greatly enhanced the recording and interpretation of financial information
thereby improving accounting systems and economic life. The application of
Computers in the accounting process has facilitated rapid processing of
accounting information accurately, rapid exchange of documents, research, and
office productivity. The term Information Technology (IT) refers to the
application of computers and telecommunications equipment to conduct the
activities of storage, retrieval, transmiting and manipulating data .The
evolution of Information and Technology systems led to the development of
Accounting information system which processes reliable financial information
needed for decision making. The research therefore seeks to investigate the impact
of information technology on accounting practices. Case study small and medium
size enterprises
1.2 Statement
of the Problem
The
application of information technology in the accounting process provide
for an efficient accounting process which accurately and rapidly process
financial information .
Accounting is the process which records
classify and summarize transactions and events of a financial nature and the
interpretation of its results ICPA (1953) . It is also referred to as an
information system which measure, process and communicates a firm’s financial
information N .con (1978) however numerous deficiencies
exist which to be addressed. This includes the problem of security of
information in the system; A system which is poorly
protected opens the installed program and data to theft or
hackers. Consequently such information could be misused
and
damaged. Another problem as to do with Automation;
which facilitates the transfer of data to multiple reports
and systems. This implies that an error in the transmitting of information
could lead to wrong output of information. Problem of Changing
Technology; means that computerized
accounting systems may become obsolete over a short period of
time. Problem of Training; Many
accounting processes cannot be operated without the right skill and this
requires training. Consequently there is not often sufficient staff to handle
the accounting process involving the application of technology. The problem
confronting the research therefore is to determine
the impact of information technology on accounting practices case study; small
and medium size enterprises
1.3 Objectives
of the Study
To
determine the impact of information technology on
accounting practices .A case study of small and medium size enterprises
1.4 Research
Questions
What is accounting
and information technology?
What
is the level
of impact of information technology on accounting practices in small and medium
size enterprises?
1.5 Significance
of the Study
The
study provides an appraisal of the impact of information technology on
accounting practices .A case study of small and medium size enterprises
1.6 Research
Hypothesis
Ho
The level of impact of information technology on
accounting practices of small and medium size enterprises is low
Hi
The
level of impact of information technology on
accounting practices of small and medium size enterprises is high
1.7 Scope
of the Study
The study focuses on
the appraisal of the level of impact of information technology on accounting
practices. A case study of small and medium size enterprises
1.8 Limitations
of the Study
The study was
confronted by some constraints including logistic and geographical factor.
1.9 Definition of Terms
ACCOUNTING DEFINED
Accounting is the process which records classify and
summarize transactions and events of a financial nature and the interpretation
of its results ICPA (1953) . It is also referred to as an information system
which measure, process and communicates a firms financial information N .con
(1978) . The innovation of information technology has greatly enhanced
accounting.
INFORMATION TECHNOLOGY DEFINED
The term Information Technology (IT) refers to the
application of computers and telecommunications equipment to conduct the
activities of storage, retrieval, transmiting and manipulating data .The
evolution of Information and Technology systems led to the development of
Accounting information system which processes reliable financial information
needed for decision making.
REFERENCES
[1] ICPA, (1953), “Review and Resume”, Accounting
Terminology Bulletin no. 1, par 9.
[2] N. Conn, (1978), “Objectives of Financial
Reporting by Business Enterprises”, Statement of Financial Accounting
Concepts no. 1, par 9.
[3] W. Ballada and S. Ballada, (2011), “Basic
Accounting”, DomDane Publishing, pp. 20, 88-90.
[4] Information Technology, , (Accessed 2013) http://en.wikipedia.org/wiki/Information_technology.
[5] M. Ghasemi, V. Shafeiepour, M. Aslani and E. Barvayeh, ,
(2011), “The Impact of Information Technology (IT) on Modern
Accounting”, Procedia - Social and Behavioral Sciences, vol. 28 pp. 112–116.
