assessing the effect of using computerized …
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ASSESSING THE EFFECT OF USING COMPUTERIZED ACCOUNTING
SYSTEMS ON ORGANIZATIONAL PERFORMANCE IN ZAMBIA
By
Elizabeth Smith
(002-928)
A Dissertation Report Submitted In Partial Fulfilment Of The Requirements For The
Award Of A Bachelor Of Accountancy Of The Cavendish University Zambia.
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DECLARATION
I, Elizabeth smith hereby declare that this dissertation is my own work and that it has not
been submitted for any degree or programme in any other university and that all the sources I
have used or quoted have been indicated and acknowledged by complete references.
Signature____________________
Date________________________
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ACKNOWLEDGMENTS
Firstly, I would like to express my gratitude to Almighty God for the wellness, and support in
of this research. My gratitude goes to my supervisor, Mr Cifwala Hikacila for support,
professional advices, and guidance throughout my research, I truly appreciate.
To my mother, my Sisters, brother, brother in law (Mr. Kalunga) and my Partner (Mr Alex
Chota) thank you my family for your prayers, encouragement and support both financial and
material support, for being there and never giving up on me, I can never stress this enough.
My dear classmates and fellow graduates I thank you for your support and motivation.
My special thanks go to employees of Finance department, Auditing and human resources of
staff in LGAs for their cooperation and their participation as respondents of my study.
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DEDICATION
This work is dedicated to all academicians, policy makers and other stakeholders in the
academic world. I also dedicate this work to my lovely family.
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LIST OF ABBREVIATIONS AND ACRONYMS
AIS Accounting Information Systems
CAS Computerized Accounting System
CEO Chief Executive Officer
DCs Developed Countries
ERP Enterprise Resource Planning
FMIS Financial Management Information System
GAAP General Accepted Accounting Principle
ICT Information Computer Technology
IT Information Technology
LGAs Local Government Authorities
RBV Theory or resource-based view
SMEs Small and Medium Enterprises
NGO Non Government Organisation
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ABSTRACT
Information communications technology on computerized accounting systems was intended
to be effectively utilized in local governments to bring impact on accounting and
organizational performance in LGA`s. This study aimed at assessing the impact of
computerized accounting system usage on organization performance in
Zambia with special focus in local government authorities (LGA`s) Lusaka province. The
study used mainly primary data from 30 respondents selected using purposive sampling
techniques. This study employed descriptive analysis.
All respondents surveyed in the LGAs use Computerized Accounting System. It was found
that about 43% reported that computerized accounting system requires training to staff which
is a challenge, the reason might be due to lack of time to undertake training and the costs that
come with the training . About 27% indicated that computerized accounting system caused
loss of data, 20% are challenged the additional costs, and about 10% reported that it resulted
into wrong data entry. The Researcher asked if there are any measures taken to solve these
challenges. The results indicated, about 62% of respondent reported that the organization is
taking measures to overcome these challenges. About 82% claim that simplification of CAS
will improve organization performance.
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Table of Contents
DECLARATION ..................................................................................................................................... 2
ACKNOWLEDGMENTS ......................................................................................................................... 3
DEDICATION ........................................................................................................................................ 4
LIST OF ABBREVIATIONS AND ACRONYMS ......................................................................................... 5
ABSTRACT ........................................................................................................................................... 6
Table of Contents ................................................................................................................................ 7
LIST OF TABLES .................................................................................................................................. 10
LIST OF FIGURES ................................................................................................................................ 11
1.0 Chapter One: Introduction ....................................................................................................... 12
1.1 Background ........................................................................................................................... 12
1.2 Problem Statement ............................................................................................................... 14
1.3 Research Purpose ................................................................................................................. 15
1.4 Rationale of the study ........................................................................................................... 15
1.5 Objectives of the study ......................................................................................................... 15
1.5.1 General objective of study ............................................................................................ 15
1.5.2 Specific Objectives of study .......................................................................................... 15
1.6 Research questions ............................................................................................................... 15
1.7 Scope of the Study ................................................................................................................ 16
1.8 Significance of the study ....................................................................................................... 16
1.9 Organization of the Work ..................................................................................................... 16
1.9.1 Chapter one .................................................................................................................. 16
1.9.2 Chapter two .................................................................................................................. 16
1.9.3 Chapter three ................................................................................................................ 16
2.0 Chapter Two: Literature Review ............................................................................................... 17
2.1 Overview of literature .......................................................................................................... 17
2.2 Theoretical Literature Review .............................................................................................. 18
2.2.1 Systems Theory ............................................................................................................. 18
2.2.2 Computerised accounting ............................................................................................. 19
2.2.3 Resource-Based View Theory ....................................................................................... 19
2.2.4 Positive Accounting Theory .......................................................................................... 20
2.3 Accounting ............................................................................................................................ 20
2.3.1 Definition of Accounting Concept ................................................................................ 20
2.3.2 Role/Functions of Accounting ...................................................................................... 21
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2.4 Accounting Systems .............................................................................................................. 22
2.4.1 Manual Accounting Systems ......................................................................................... 22
2.4.2 Computerized Accounting Systems .............................................................................. 25
2.5 Empirical studies on Computerized Accounting System ...................................................... 27
2.5.1 Adoption of computerised accounting ......................................................................... 27
2.5.2 Other Factors that Determine the Adoption of CAS in LGAs ........................................ 29
2.5.3 Impact of CAS in LGAs ................................................................................................... 30
2.6 Determinants of Quality Financial Reports on Organizational Performance ....................... 31
2.6.1 Computerized Accounting Systems .............................................................................. 31
2.6.2 Computerized Accounting System Security .................................................................. 31
2.6.3 Transparency ................................................................................................................ 31
2.6.4 Leadership ..................................................................................................................... 32
2.7 AIS and Business Performance ............................................................................................. 32
2.8 Literature review underpinning study .................................................................................. 32
2.9 Conceptual Framework......................................................................................................... 34
2.10 Hypothesis ............................................................................................................................ 34
3.0 Methodology and design .......................................................................................................... 35
3.1 Research Approach ............................................................................................................... 35
3.2 Research Design .................................................................................................................... 35
3.3 Research Strategy ................................................................................................................. 35
3.4 Sampling frame ..................................................................................................................... 35
3.5 Sample size and sampling techniques .................................................................................. 36
3.5.1 Sample Size ................................................................................................................... 36
3.5.2 Sample Techniques ....................................................................................................... 36
3.6 Operationalization of Research Variables. ........................................................................... 36
3.7 Data collection techniques ................................................................................................... 36
3.8 Data analysis methods .......................................................................................................... 37
3.9 Data Validity and Reliability .................................................................................................. 37
3.10 Ethical Considerations. ......................................................................................................... 37
4.0 DATA ANALYSIS AND PRESENTATION ....................................................................................... 38
4.1 Overview ............................................................................................................................... 38
4.1.1 SECTION A: BACKGROUND OF RESPONDENTS ............................................................. 39
4.1.2 Results Study ................................................................................................................. 44
5.0 Discussion and Interpretation of findings ................................................................................ 50
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6.0 Conclusions and Recommendations ......................................................................................... 53
6.1 Introduction .......................................................................................................................... 53
6.2 Conclusion ............................................................................................................................. 53
6.3 Implication ............................................................................................................................ 54
6.4 Recommendations ................................................................................................................ 54
6.5 Limitation of the study.......................................................................................................... 55
6.6 Suggestions for further study ............................................................................................... 55
7.0 REFERENCES .............................................................................................................................. 56
APPENDICES ...................................................................................................................................... 65
Appendix I ......................................................................................................................................... 65
Appendix II ........................................................................................................................................ 70
Appendix II ........................................................................................................................................ 71
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LIST OF TABLES
Table 4. 1: Responsive Rate ..................................................................................................... 38
Table 4. 2: Gender of respondents ........................................................................................... 39
Table 4. 3: Marital Status ......................................................................................................... 40
Table 4. 4: Age of Responders ................................................................................................. 41
Table 4. 5: Academic Qualification ......................................................................................... 42
Table 4. 6: Work Experience ................................................................................................... 43
Table 4. 7: Challenges Encountered ........................................................................................ 44
Table 4. 8: Level of Usage ....................................................................................................... 46
Table 4. 9: Organization Performance ..................................................................................... 47
Table 4. 10: Rating ................................................................................................................... 48
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LIST OF FIGURES
Figure 2. 1: Accounting System Model ................................................................................... 24
Figure 2. 2: Computerised Accounting System ....................................................................... 26
Figure 4. 1 : Responsive Rate .................................................................................................. 38
Figure 4. 2: Gender of respondents .......................................................................................... 39
Figure 4. 3: Marital Status ....................................................................................................... 40
Figure 4. 4: Age of Responders ............................................................................................... 41
Figure 4. 5: Academic Qualification ........................................................................................ 42
Figure 4. 6: Work Experience .................................................................................................. 43
Figure 4. 7: Challenges Encountered ....................................................................................... 45
Figure 4. 8: Level of Usage...................................................................................................... 46
Figure 4. 9: Organization Performance .................................................................................... 47
Figure 4. 10: Rating ................................................................................................................. 48
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1.0 Chapter One: Introduction
The increase in global market of the world economy involves the participation of many
companies around the globe. Due to this increase, many companies are facing challenges in
accounting the losses in their taxes (Norfarah, 2017). However, the innovation of
information technology (ICT) has drastically changed and resolved the challenges in
financial management and accounting practices (Masanja N. , 2019). Information
technology application in accounting has in the resent years improved the efficiency and
performance of most organisations (Taiwo, J.N, Agwu, P.E, 2016). Accounting has taken on
an increasingly significant role in the workings of modern industrial societies. Accounting
plays a very significant role in many organizations' activities (Wickramasinghe, M., Cooray,
N., Dissanayake, T., Pemarathna, R., 2017). To improve efficiency and productivity, many
companies use computers to perform critical, including accounting functions; development
payroll systems, control of inventory, budgeting, cost and profit analysis (Akinbowale, O.E,
Olowokure, T.O, Adedara, M.T, 2018). The development and availability of accounting
software tools help in the elimination of error (Sherman, H.D, Young, S.D, 2016).
1.1 Background
According to the literature exiting, it was suggested that management of accounts are
essential in the management of accounts process (Pasch, 2019). Accounting takes an
important role in the operation of an organisation; most businesses use accounting software
to keep track of financial information that relates to the activities of an organisation
(Ganyam, A.I., Ivungu, J.A, 2019). It is important that financial information is kept updated
and reviewed by the organization, with the increase in accounting transactions and
exposure of information to errors due to complexity of these accounting systems, there was
a need for a system with high processing and storage capacity (Maziyar, G, Vahid, S
Mohammad, A, 2011). It is through this that most accounting software was developed.
The accounting practices were performed manually before the introduction of computerized
accounting system. These accounting records have been manually prepared, but nowadays
many accountants want to use the software application to enter transactions in books of
accounts, statements and make their analysis of financial information about their
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organization. The information was gathered from transaction reports and made Economic
compilations (Weber, 2011)
In (Frankwood, A and A. Sangster, 2009) further details on the effect of computerized
accounting on accounting records in Local government shall be measured by the extent to
which the local government is Use of CAS in execution.
The CAS deals with computer-based reporting of accounting transactions through various
accounting packages and is stored in a data base. The users of the database correctly
prepare reports. The initial computerized accounting framework provides all of the
fundamental criteria of every learning from database. Computer system application helps
simplify, integrate all business processes, cost efficiency and helps present all business
undertakings to financial report stakeholders precisely.
Accounting software is a computer program that helps accountants and book keepers
monitor and disclose financial transactions of a company. Accounting software defines a
category of application software that tracks and processes financial modules accounting
transactions such as accounts payable, accounts receivable, payroll and trail balance
(Carlos, F. Ricardo, S, 2004). Accounting software may be online based; accessible
anywhere at any time with a device which has internet or it may be desktop based (Unegbu,
2014). The use of accounting software will shorten the data processing time that usually
takes longer time if it is done manually (Otilia, D. Marian, M, 2015)
Little has been done on computerized accounting system in organizational performance at
local government level, this study aimed at assessing the effect of computerized accounting
system usage on organizational performance in Zambia with a specific emphasis on local
government (LGA's) in Lusaka.
Lusaka was established as a Local Authority in July 1913. Founded on the concept of a
Garden City and because of its favourable climate as well as its central position, Lusaka
was designated as the Capital City of Zambia in 1935. Due to the exponential growth of the
economy and the unprecedented infrastructure development which took place at an
instantaneous speed it prompted the colonial government to bestow Lusaka with the City
Status in 1960.
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1.2 Problem Statement
Software accounting is a class of computer programs that do accounting operations.
Currently, local authorities have taken various steps to improve accounting practices
performance, including converting to computerized software, as a result of which the
performance has been improved as compared to years of manual accounting. The
advancement in information technology have eventually led to the introduction of
computerized accounting systems in corporate reporting to help relevant and faithful
representative financial reports for both management and external users for decision
making (Greuning, 2006).
Software accounting is a class of computer programs which perform accounting operations.
Local authorities in Tanzania have taken various measures to enhance accounting
efficiency, including moving to computerized software, which has increased profitability
compared with years of manual accounting. (URT, 2003). There are several challenges in
information communication technology (ICT) with regard to Accounting Software
including information communication technology which drives computerized accounting
system (CAS) being concentrated mainly in Zambia as noted by URT (United Republic of
Tanzania) (2003).
The introduction of information management technology on Tanzania's computerized
accounting systems has presented many challenges. According to (Nfuka, 2012) it was noted
that the bureaucracy and lower managerial autonomy in local government limits the freedom
to coordinate output due to the complexities of the legal regulations that lead to difficulties
embedding computerized accounting systems. The problem was that when reporting large
amounts of transactions, some local government organizations previously used to use manual
accounting systems that were associated with a large number of records causing transaction
processing errors. The use of manual accounting in the past could be attributed to factors
such as lack of exposure to computer facilities, lack of expertise in computerized accounting
systems in LGA's and many others.
Studies have been done on the effects of computerized accounting systems and the quality of
financial reports in local government organizations (Mwaura, 2013); A study of the
implementation of the computerized accounting system in Kisumu, Kenya (Otieno, Polo J
and Oima, D, 2013). Thus, this study is intended to fill this research gap by assessing the
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impact of Computerised Accounting System Usage on organization performance in Zambia
with special focus in local government authorities (LGA`s) in Lusaka Province
1.3 Research Purpose
The purpose of this research is to explore the impact of computerized accounting system
usage on an organizational performance in Zambia.
1.4 Rationale of the study
Accounting information systems (AIS) coupled by improved speed, accuracy and reliability
and with good corporate governance practices lead to good firm performance. Literature has
studied the organization performance and AIS alignment but few studies have looked at the
relationship between characteristic of accounting software and firm performance. While the
impact of corporate governance and strategic decision making on firm performance has been
widely studied
1.5 Objectives of the study
1.5.1 General objective of study
a) To explore the effect of using a computerised accounting Systems on
organizational performance in Zambia
1.5.2 Specific Objectives of study
a) To assess the challenges that are encountered with the use of computerized
accounting systems in the organization.
b) To assess the level of usage of computerized accounting system in the
organization.
c) To assess the organization performing with respect to adoption of computerized
accounting system.
1.6 Research questions
a) What are the challenges that are encountered with the use of computerized
accounting systems in the organization?
b) What is the level of usage of computerized accounting system in the organization?
c) How is the organization performing with respect to adoption of computerized
accounting system?
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1.7 Scope of the Study
The study assesses the effect of using Computerised Accounting Systems on organizational
performance in Zambia (LGA’s) authorities. The study concentrated on representing other
Provinces in Lusaka.
1.8 Significance of the study
The results from this study are to give knowledge concerned with the effect of computerized
accounting system usage on organization performance in Zambia, the objectives of the
findings will help internal and external users in the professional deals with the accounting
procedures to know more about the scope of CAS that provide organization performance as
well as its impact on performance, the findings of the study can be used by future researchers
and some academicians on the same topic. Also the study will help the researcher to partially
fulfil her requirements for the award of Bachelor of Accountancy.
1.9 Organization of the Work
This work is organized in five chapters followed by references and appendices. The detail of
each chapter is described as follows:
1.9.1 Chapter one
It presents the introductory part which, among others, includes: background of the study,
statement of the problem, research purpose, rationale of study, objectives of the study,
research questions, and significance of the study.
1.9.2 Chapter two
It presents both theoretical and empirical literature. In addition to that, Conceptual framework
is presented in this chapter. The conceptual framework provides the relationship that exists
between the variables as refined from the literature review.
1.9.3 Chapter three
It provides the ideas which present the methodology that was used in carrying out the study.
It includes specification of model, the study area, research design, study population, sampling
design and their sampling techniques, data collection methods, validity and reliability, data
analysis techniques and ethical considerations.
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2.0 Chapter Two: Literature Review
Before the introduction of ICT into financial accounting practices, all the accounting
activities were performed manually. The introduction of computing systems has made it
easier for every accountant. In 2017, Amahalu, N.N., Abiahu, M.C., Nweze, C. L. and Obi, J. C
had conducted a comparative analysis of computerized accounting system and manual
accounting system in microfinance banks in Nigeria from 2010 to 2015. The outcome of the
findings indicated that accounting systems significantly contributed towards profitability of
the banks compared to the manual systems. The study further recommended that banks
should implement computerized accounting systems because it improves the overall financial
performance of the business (Masanja N. , 2019).
According to (Kingi, 2013) computerized accounting system is an organized procedure to
collect record and interpret accounting data with the assistance of a computer or automated
device. In other words, it is a computerized system where financial transactions are collected
or entered into a computer and analysed so as to create necessary documents and hence
journalize the financial records to provide the required accounting journals, the main purpose
of a computerized accounting system is to produce reliable and accurate financial information
or statements on a timely basis. At the same time, the computerized accounting should
generate appropriate information for decision making.
Due to the weakness of manual accounting systems, many private and public organisations
have been shifting to the computerized system. There are a lot of studies which have
examined the effects of computerized accounting systems in the government or public sector
(Mbelwa, 2015). Accounting information systems play a very important role in record
keeping, which amalgamate accounting principles and concepts which are used to examine
and record business transactions for a purpose to prepare financial statement and provide
accounting data to the end users.
2.1 Overview of literature
Accounting is defined in various ways by many authors. For example, (Weber, 2011) points
out those business owners controlled their organization financial report using accounting
procedures. (Sacco, 2008) gives out more clarification that accounting deals with a system in
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which financial reports used as the key factors that used by stakeholders as major
communication, summarized, analysed, and interpreted which facilitated by accounting
software, and computer –based like internet pin point by (Bretch and Martin 2006; Marivic
2009).
The global market has changed significantly over the last few decades, and we can see more
progress in the transformation of information systems in the next decade. Reviews of ICT
literature included articles on academic and technical subjects, with an emphasis on newly
published papers. Google's intelligent accounting papers used search engines, web and ICT to
collect information from various articles. Today’s executives are more creative and ambitious
than their forefathers, and technology plays a bigger part in that (Southwick, P. M, 2016)
Sometimes the 21st century is called the "Digital Age," e.g. listening to music, accessing
news, information, and entertainment on smart phones and tablets.
Many accountants are still using traditional systems that were developed 20-30 years ago that
are costly and inefficient. They are reluctant to change procedures and risk losing out to
rivals using systems underpinned by more recent advances in technology (Braine, 2006).
There is no argument that developing countries are becoming completely conscious of ICT’s
benefits and realize that ICT can solve many problems and these countries will slide behind
other countries without investing in ICT skills. Many countries, such as China, South Korea
and Singapore, have grown rapidly with the aid of ICT, according to Gebremeskel, et al.
(ITU, 2016).
2.2 Theoretical Literature Review
This section deals with the theories that are important to this study. The theories of this
review included systems theory, positive accounting theory and resource-based review theory
that impact on the organization performances.
2.2.1 Systems Theory
Kaufmann (2010) defined the frameworks to explain the history of creation as a complex
process and was more fully developed by a biologist Bertalanffy (2009). Bertalanffy
concluded that all is consisted and thus, we should research the interconnectedness as a way
of understanding the universe.
Gelinas, et al. (2005) investigated that the theory of systems is more important to this study
as this theory of systems techniques is applicable because the methods proposed by the
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theory are the more complicated model for entities that generated the components by
abstracting them from certain arrangement and component details which concentrate on the
dynamics which elaborate the functions, properties and relationship characteristics which are
internal or external to the system.
2.2.2 Computerised accounting
According to Wilson, R. A., and A. Sangster, (2010) Computerized accounting is known as a
total number of components which comprises together all inputs, storage, transactions
processing collecting and reporting financial information.
Bretcht and Martin, (2006); Marivic, A, (2009) Pin points that Financial information on
business dealings are recorded, organized, summarized, analysed, interpreted and
communicated to stake holders through the use of the computer and computer-based systems
such as the internet and accounting software, according to Meigs, F.R. and Mary. A, (2006)
elaborate the connotation of accounting (CAS) as a scheme that applies software to make all
process concerned with input, process, store and output under accounting which is used in
sequence in form of statement of financial position.
2.2.3 Resource-Based View Theory
Barney, (2006) developed the strategic emphasis on factor markets and the position of
expectations can be seen in the resource-based system, Barney's framework has proven to be
a strong foundation on which others can develop, the business strategy's current vision of
resource-based business strategy Theory or resource-based view (RBV) is based on the
principle of Economic rent, and the company's view as a collection of capabilities. This
outlook of strategy has a rationality and integrative role that places it well ahead of other
mechanisms of strategic resolution (Kay J, 2005).
Following on the RBV, Hoopes, D.G., Madsen, T.L. and Walker, G, (2003) recommend a
broader case for sustained differences between companies and establish a specific theory of
competitive heterogeneity. The Resource Based Views lack clarification about their central
concept and lack of any strong boundary drawbacks to constructive discussion. One may
invoke the logic based on definition or hypothesis because the theory lacks specificity, it has
been suggested that resources have one potential source of competitive heterogeneity. For
reasons other than sticky capabilities, competitive heterogeneity can make it available
(Hoopes et al. 2003).
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Competitive heterogeneity refers to a continuation and systematic performance with
differences among close competitors. The theory is relevant to this research because it helps
NGOs make its competitive in their performance in order to achieve their main objectives,
mission and vision as well.
2.2.4 Positive Accounting Theory
Positive theories used to make more explanation and prediction (e.g. what does or what will
happen) and are established in empirical data (Ryan et al, 2002). Since they are established in
empirical data, researchers seem to be offering accountancy deals the prospects, the validity
of the critiques of Johnson and Kaplan (Relevance Lost) management accounting practice.
This method of research draws on a wide variety of theoretical frameworks to resolve
accounting problems in financial management. Different research approaches and
methodologies are not considered to be competitive, but instead are used together to provide
a variety of insights into a broad range of management deals with research questions (Ryan et
al 2002).
2.3 Accounting
Accounting is not only the oldest of management disciplines but also the most stable. Despite
its stability and continuity during the past several decades, accounting has seen major
changes. It would be surprising if accounting is the same as it is today one century from now.
Although we can't look far beyond, we can evaluate the current circumstances for hints about
what to expect in the next decade or two (Sunder, S, 1999). Accounting provides financial
information of an organisation. Owners, managers, investors and other interested parties
need financial information; it’s needed because of decision-making by owners, managers,
investors and other interested parties. Financial accounting is the art of identifying,
measuring, recording, classifying and summarizing and communicating, analysing and
interpreting money, transactions and events of a financial nature in part at least the results
there of (Woode, F., and Sangster, A, 2008).
2.3.1 Definition of Accounting Concept
Weber (2011) brings out a point that business owners controlled their organization financial
report using accounting procedures and Sacco (2008) gives out more clarification that
accounting deals with a system in which financial reports is used as the key factors that used
by stakeholders as major communication, summarized, analysed, and interpreted which
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facilitated by accounting software, and computer –based like internet pin point by (Bretch
and Martin 2006; Marivic 2009)
2.3.2 Role/Functions of Accounting
A business organization can be seen as a collection of contracts among different parties,
according to Sunder (1997): staff, shareholders, clients, suppliers, managers, creditors,
auditors, government, among others. Each Contracting Party agrees to provide services. For
instance, employees and managers contribute skills, shareholders and creditors contribute
capital, vendors provide machinery and materials, and customers provide cash. Each
participant demands at least as large an inducement as the opportunity value of his
contribution to the organization. To be successful an organization must satisfy each of its
participants with its production technology and set of contracts. If he can get more he can
leave the company somewhere. If enough people are leaving the company would fail.
They argued that, accounting is necessary to assemble, implement, enforce, modify, and
maintain the contract set of organization. Accounting therefore plays five main functions in
an organization.
The first control requirement is to devise a system of measuring each agent’s contributions. It
should also determine the amount of incentive due to them, and monitor the inducements
distribution so that each agent receives their due, no more and no less.
In addition, accounting distributes information to different factor markets in order to keep
them solvent and find replacements for those members who leave. Finally, in the form of
common knowledge or public disclosure, accounting makes some information available to
help reduce conflict between participants at the time they renegotiate their contracts (Sunder
1997).
The second function is that the accounting system Measures, tracks and monitors the outflow
of Organizational Resources. Payroll and workplace insurance cards, delivery to Clients,
accounts payable to vendors and tax reports calculate capital outflows Governing (Sunder
1997).
In the third function, the accounting system compares the data on the inflow of resources and
Outflows to establish who performed his contract and to what extent. Accounting system
prepares qualitative reports on resource inflows and outflows relating to various types of
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individuals in an organization. Such statements are used to evaluate and modify the contracts
for these people (Sunder, 1997)
In a fourth function, accounting helps assemble and sustain the contract set by identifying
among others the correct participants in the labour factor markets, managers, consumers,
suppliers and investors. All these people must be persuaded that joining such an endeavour is
in their own best interests. Pro forma financial statements, business plans and budgets
compiled by the company before the start of the operation assess the costs and benefits of
working in various positions at the proposed company. When Vacant contract slots, they
must be filled from the factor markets (Sunder, 1997).
Finally, in its fifth function, when contract terms expire, they are frequently renegotiated
under changed conditions. Agents are tempted to issue threats, if their terms were not revised
in their favour, to quit their position in the organization. Sometimes such bluffs and threats
lead to a deadlock in negotiations, strikes, and consequently deadweight losses for society.
Accounting carries out its fifth function by sharing at least a minimum set of information
among the negotiating parties and makes it common knowledge, and helping to reduce the
possibility of break - down. This is the primary purpose of disclosing the public in larger
organisations.
2.4 Accounting Systems
Every other company applies accounting because it is widely accepted that companies are
required to disclose certain financial and management relevant data to economic users and
this is because accounting is an essential tool in business decision-making. Accounting thus
plays an important part in each company; businesses are required to maintain proper account
books (Section 123).
Accounting is divided into two categories: manual accounting and computerized accounting
systems (Weber, 2010).
2.4.1 Manual Accounting Systems
A system is a set of interdependent components which acquire certain objectives. Manual
accounting is an information system and according to Romney & Steinbart (2009), manual
accounting has been described as an information system organized to collect, store and
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process data and to store, maintain, track and report information so that an organization can
achieve its goals and objectives. Tanis and Dalci (2002) emphasised that, information system
has the following components; Goals and objective, Inputs, Output, Data storage, Instructions
and Procedure, Users, Control and Measures. Accounting systems as an “information system
is a man-made system that generally consists of an integrated set ofcomputer-based and
manual components establish to collect, store, and manage data and to provide output
information to users” (Gelinas et al, 2005).
Manual accounting reveals that workers manually conduct the entire accounting process on a
regular basis: writing trial accounts, journalising transactions and filing financial statements.
Waterfield and Ramsing (1998), points out that the accounting system can be a basic manual
based on the general publication (Where transactions are chronologically reported as debits
and credits), general ledger (where the general journal operation is summarized by account
number); And other journals needed for the administration of Business, such as purchase,
payment, sales, receipts and newspaper payroll. (Institutions usually do not prepare any of
those other journals because of the expense of keeping several manual journals.) They
further stated that, a manual accounting system typically includes at least the following and
thus presented in fig 2.1 on the next page.
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Figure 2. 1: Accounting System Model
A MANUAL ACCOUNTING SYSTEM MODEL
Transaction
Entry
Chart of
Accounts
Journals
General
Figure2.1 : Gelinas et al. (2005)
Lots of transactions that have to be handled in the accounting cycle make this process routine
and even a little error will cost the entire cycle from the very beginning to find and correct
the error. "... Data processing is slow in manual accounting systems and is subject to error"
(Grabski and Marsh, 1994). Despite the advantages Manual accounting systems has which is;
comparative cheap workforce and resources, reliability, independence from machines, skilled
worker’s availability; the manual system disadvantages include: reduces speed, increases
workload of accountants, relatively slower internal control reporting, routine work and some
others such as the issue of backups.
Other
Journals
General
Ledger
Financial
Statement
Transaction
And management
Reports
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2.4.2 Computerized Accounting Systems
Improving this technology has replaced manual bookkeeping systems with computerized
ones, thus computers in most businesses now execute accounting information systems that
were previously performed manually. Though accounting systems have been around for
decades, the advent of business technology and computerized accounting systems is
dramatically altering the field of play.
Vitez (2010) checked that paper ledgers, manual spreadsheets and handwritten financial
statements have all been converted into computer systems and that individual transactions
can be addressed easily. Computerized accounting systems adopt the same logic in a manual
system as journals, ledgers, reports and statements. Computerized systems simply consolidate
posting functions and other basic tasks into a "behind the scenes” system. Companies can
also generate reports and financial statements easier, allowing for better performance
management reviews.
Therefore, Computerized Accounting System is a computer-based framework that
incorporates accounting principles and concepts as well as the concept of information system
for tracking, storing, analysing and delivering financial information to its users for economic
decision making (Gelinas et al, 2005). The definition of a Computerised Accounting System
from above shows that a Computerised. Accounting System has the following components
with an illustrative diagram in figure 2.2;
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Figure 2. 2: Computerised Accounting System
Computerised Accounting System
Storage
Input Processing Output
Feedback Feedback
Users
Figure 2.2 (Gelinas et al, 2005)
Input: The data inputs are facts gathered and processed by the information system.
Data input includes the capture of data from a source document such as a purchase
order or sales order.
Processing: The data collected must be processed and organized into a functional
form to generate accurate and relevant results.
Output: Output is the meaningful and useful information that the information
generates Installation. It's normally delivered in a report format.
Feedback: After submitting the information in the form of a report the need arises to
get feedback. Feedback appears to act as an input source and also as a control
measure in the information system.
Storage: It serves as the repository of relatively permanent data maintained over an
extended period of time.
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2.5 Empirical studies on Computerized Accounting System
The influence of computerized accounting systems on the organisational performance has
been discussed thoroughly, with the increment in computerized accounting system; there are
several studies which have discussed this topic in details. Examples of the studies are below;
2.5.1 Adoption of computerised accounting
According to Anael (2017), the impact of computerised accounting system usage on
organisational performance in Tanzania was assessed with a focus on the local government
authorities (LGAs). The study suggested that in order to achieve better efficiency, the
government would provide appropriate training to accounting workers to improve knowledge
about the accounting system.
A study by Okoye and Oghoghomeh (2011) was conducted to investigate the impact of the
computerized accounting system on external audit functions, the study's findings revealed
that while the auditor’s computer knowledge makes a difference in its effective audit of a
computerized accounting system, some factors serve as a limitation of its effectiveness.
Another Munisi study (2013) also assessed the impact of the computerized accounting system
in ensuring effective financial control in Tanzanian local government authorities. This was a
case study carried out in council of Musoma district. After a comprehensive data analysis, the
research results revealed that computer accounting system has a significant impact in the
overall financial control in Musoma district council. In light of these results, the author
recommended that there should be a system of administrators so as to monitor and restrict
unauthorized personnel from accessing the accounting system.
Another research by Sam, Hoshimo and Tahir (2012) conducted a study on the adoption of
Computerized Accounting Systems (CAS) in small and medium-sized enterprises (SMEs) in
Malaysia, and found that the adoption of computerized accounting systems among SMEs is
strong. The study results also showed that the SMEs 'CEOs' innovativeness is contributing to
the use of CAS.
Bahati (2014) examined the effect that computerized accounting has on payroll accounting
efficiency. This was a case study performed at the Authorities for Municipal Sanitation and
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Sewage (UWASA). The results indicated that in accounting practices, the adoption of the
computer accounting system has both positive and negative impacts. To further expand the
overall discussion of empirical studies, the following studies provide a comprehensive
analysis of the empirical studies on local government authorities.
According to Chan and Kelvin (2010) institute that 52% of LGAs in Malaysia used
accounting software that has already being used while only 9 per cent mass produced on the
outside acquired software packages. This occurs due have lack of skilled people on
information technology. The researchers give out his opinion about the combination of
LGAs on using both experts and business knowledge. Usually, the LGAs one of the public
institutions versed to do their business but they professionals on how use accounting
software.
According to Powell and Xiao (2006), major UK businesses have been surveyed and
observed to look into the variety of information management technology used in LGAs to
plan their transactions. Most metrics display the level of computerization software known as
CAS in use, implemented, workstation to the ratio of the employees and their years. Some
businesses have ample knowledge of CAS to be about 94%.
Under Powel and Xiao's (2006), it was said that this finding indicates that the reach of
computerized use is greater for big business than for those medium-sized companies. Certain
results in other researchers have argued that all companies have simplicity of CAS
determinants according to their size. The establishment of Hunton and Flowers (2007) was
discovered by (Thong 2009), in which the business amount was assumed to be negatively
correlated with the level of CAS used in accounting documents. The expansion attribute of
the organization to lower resources and the availability of risk barriers as cost of CAS
decreased where some of the organizations of all sizes benefited from CAS development. The
medium-sized companies can be developed from the founding of different small business
firms. As the subject of trade indicated Managers who control the assets of the business have
limited liabilities.
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2.5.2 Other Factors that Determine the Adoption of CAS in LGAs
Arrivals of official lead to the cost reduction of microcomputers, consumers use
computerization to accomplish their mission, contribute significantly organization has put
CAS on useful in recent years.
The argument of Weber (2011) is to facilitate the management function to motivate their
employees about the adoption of computer system concerned with the accounting system. To
increase business efficiency and effectively and availability of information on time obtained
from establishment of computerized accounting system which help to increase benefits in
business enterprises.
DeLone, 2010. Lack of time is another obstacle facing the establishment of computerized
accounting system in the organization. As stated by Chenhall (2006), observation of the
automated accounting systems is costly. Henry (2007) pinpoints that there was a shortage of
professionals on CAS stated by Bretch and Martin (2006).
Gray (2011) elaborated that self-efficacy of computer known as findings of individual`s
competence in computer in use. The business organisations that have CEOs (usually the
company owner) undertake computer workshops and are responsible for bringing into
practice machine self – efficacy.
On the other hand, the directors can hinder any valuable CAS improvement through
aggression or impassiveness towards CAS. While CAS adoption is to be expected in
SME where the Directors find the CAS enthusiasm and experience, the problem is what exact
CAS expertise are necessary? However, Chanell and Kelvin (2010) made additional
description on the knowledge required to develop CAS. Under this knowledge provide
facility that fixes more technical in difficult networked environmental and how business
purposes will be integrated to meet firm’s objectives.
As another specialist in research Herman (2006) contended that business clients were vital
motivated to make execution of CAS to beat their arrivals .The position of Public Practice
Accountants is distinctive and extremely exceptional, its capacity is demonstrated
investigation of accounting system concepts like GAAP, make more elucidation and strong
counsel to their customers dispersing the measure of contracting opted among various clients.
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2.5.3 Impact of CAS in LGAs
McBride (2000) pinpoints that software used in computer produce all types of financial
management information quickly such as financial plan and variation. For decision making
data dispensation and make analysis done in accuracy in time with more perfect hence
availability of neat information that meet managers requirements (Wood 1999).
Indira (2008) defined the progress of business performance as the result of accounting
software which is highly integrated with the application used to transform business functions
into performance enhancing features that tackle inventory control, accounting concepts and
financial reporting. Mc Rae (1998) insisted that it helps the availability of faster information
and decision done quickly in the company.
To obtained quality financial reporting the professional accountants should use computerized
in order to make the accurate reports. Carol (2002) state the office competence increased by
computerized general ledger, payroll, and other accounting tasks in business organization.
The credibility of CAS in backups and speed provided made availability of up to date account
balances in time for management decision making. In saving time hence to obtain a financial
report which has more reliable and neat information (Lewis, 1999).
Research by Daoud and Triki (2013) finds that most people who use their organization's
computerized accounting information system are very proactive in promoting business
performance in the firms. The goal of this research was to discover more about the impact of
using computerized information in the preparation of accounting information relevant in an
ERP environment that generates business performance. Under this performance, the
researcher discovered that there is competence which has a positive impact on the
development of the company in order to improve business performance.
Like other authors, Abdallah (2012) conducted a research which gave more clarification
about the impact of using accounting information system on provision of quality report
prepared annually. In LGAs the study found that there is existence of forces after the
operation on accounting information system used on providing quality of financial report.
Most of these the researcher recommended that most of professional should focus to improve
the devices function on accounts department, provide training to LGAs staff.
Breen (2003) conducted a study to examine small businesses whether there is any disturbance
that prevents small businesses from migrating by the use of computerized accounting. This
survey was performed by two SME groups. The study found progress in providing
knowledge of barriers that obstruct the organization's use of a CAS.
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2.6 Determinants of Quality Financial Reports on Organizational Performance
2.6.1 Computerized Accounting Systems
Computerized accounting software handles the software used to process the accounts
information system work. These are designed to take advantage of a variety of benefits such
as routine accounting data size, time spent, quick data analysis, statements and briefs on
financial accuracy. Powerful and secure flow of information enhancing the company's ability
to meet corporate and business strategy goals (Manson, Sherer and McCartney, 2001). This
in turn help the company to increase the prospects goodwill of the firm`s survival (Platt and
Platt, 2012). This can be evaluated by the procedures used in recording transactions in the
software, and its mechanism was used (Keating and Frumkin (2003).
2.6.2 Computerized Accounting System Security
As the organisation is becoming increasingly depend on Computerized accounting system in
the execution of their project to make company work efficiently, they face several threats that
are compromised in their method. Those risks are available in the form of computer fraud,
computer attacks (viruses’ attacks like Trojan) and security breach (Grabski and Marsh,
1994). And money related reports are done consequently (Grabski and Marsh, 1994).
2.6.3 Transparency
Transparency and accountability means making internal and external financial statements
available by those who are not financial experts who want to be able to read and understand
the financial reports. By making them readily accessible, they mean being open to those who
want to check and want to know your financial records.
These two leadership qualities are also characterized by holding dialogues on your budget
process and other important vision and mission used to define events with the policy board,
constituents and beneficiaries. These public events help them to have assurance that what
your strategic plan wants to do is in accordance with what is needed in the operating of the
firm’s objectives. According to Boice (2004), accountability refers to liability for financial
reports or operational transparency requiring demonstration of how the organization is being
denoted and how the organization is achieving its goals effectively and efficiently.
Transparency can be measured through openness, honesty and trustworthiness.
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2.6.4 Leadership
Leadership is the process that helps to accomplish a certain specific activity in which one
person can recruit and provide assistance and support the fellow workers or group. The
importance of leadership is to shape the backbone that will help make strategy for
improvement in the company. The leader's function is to promote account book preparation
and the development of quality financial reports which begin with creating and maintaining a
personal and organizational focus on the needs of internal and external needs or users.
According to Keating and Frumkins (2003), give more clarification that leadership has three
scores as follows: Independence board / management committee, Effectiveness board /
management committee and Effectiveness of NGO Management. Sloan (2001) said the
financial report is the first source of autonomous and true communication about company
manager’s performance.
2.7 AIS and Business Performance
Dibrell, Davis and Craig (2008) suggest that business performance can be further improved
in quality through the incorporation of either a product or process-oriented innovation
strategy with IT / IS investment. Studies have shown that the implementation of accounting
information systems in Malaysia, Spain, Finland, Pakistan and Iran improves the results,
productivity and efficiency of the business, but in malaysia (Norfarah, 2017) there is little
research conducted on the impact of computerized accounting system on business
performance of firms.
2.8 Literature review underpinning study
This research is aimed to highlight the impact of computerized accounting system usage on
an organizational performance in Zambia There are similar studies that have been conducted
in order to highlight the link between computerized accounting system and performance of
public companies. Currently there are several examples of ICT elements that exist in the
International Accounting Education Standard Board’s Conceptual Framework and Education
standards.
The first phase of the literature review conducted by Jaqueline et al. 2017 revealed that there
are various technological advancements that have emanated in recent years such as bitcoin
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and block chain, cloud computing, AI, drone technology and smart phones. It also suggests
exciting opportunities for the accounting profession that have recently arisen from
technological advancements such as new roles in forensic auditing, conducting audits with
drone technology, managing financial transactions with bitcoin and block chain, engaging
with stakeholders and clients through social media, and using big data to aid in analysis and
interpretation (Jacqueline et al., 2017).
Cloud computing is the practice of using a network of remote servers hosted on the internet
to store, handle and process data, rather than on a local server or device, which has had huge
consequences for the way businesses do business (Dunbar, 2017). The major benefit for
companies is that cloud computing provides the functionality of existing IT services (Marston
et al, 2010), with no need for specific desktop computers, software, infrastructure costs and
local networks. It also offers companies a chance to access external functionality that would
otherwise be unfeasible for the company. Cloud computing is changing all industries and has
tremendous implications for the accounting industry (Riddell, 2015).
Sledgianowski, Gomaa and Tan (2017) illustrate how big data is and information systems
could be integrated into accounting courses including Introductory accounting, financial
accounting, management accounts, cost accounting, financial interim accounting, audit, AIS
and taxation.
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2.9 Conceptual Framework
Independent Variables Dependent Variable
Level of awareness on CAS Access to Use
A conceptual framework explains the relationship between five (5) independent
variables, and one (1) dependent Variable (Mugenda and Mugenda, 2003). In this
study the independent variables shows the Impact of Computerized Accounting
System Usage, meanwhile Organization Performance stands as dependent variable
as illustrated above in figure 2.
2.10 Hypothesis
Ho: Usage of computerized accounting system has no impact on organization performance.
Hi: Usage of computerized accounting system has positive impact on organization
performance.
ORGANISATION
PERFORMANCE
Marital Status
Qualification Of Staff
Level of awareness and
experience with CAS
Other Use
Training
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3.0 Methodology and design
This chapter discussed about how the data were collected and how were analysed. Sub-
sections covered are study area; research design; study population; sampling; data collection;
analytical technique; model specification; and ethical consideration.
3.1 Research Approach
In this study, quantitative research approach model that can be used by managers to help
address specific situations or problems. Frequently, quantitative methods involve collecting
information (or using information collected by others) and manipulating the information
using mathematics and statistics.
This approach will be used 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 to qualitative method since there’s an unaware of essential variables to analyse
and the sensitivity of data collection relating to the social settings.
Using this method allows the researcher to streamline research problem to restricted variables
and supports to understand the result of analyst (Creswell, 2009). This type of research is
more objective and reliable as the researcher cannot interpret the facts of the research based
on biased opinion.
3.2 Research Design
The study makes use of descriptive survey research design. The descriptive survey research
refers to as scientific method where by data is gathered without altering the setting and this
includes surveys and investigations of various forms, targeting to get evidence that reveals
prevailing phenomenon (Mugenda, 2003).
3.3 Research Strategy
A case study approach and interview strategy was used to collect information in standardised
from groups of people, articles, research paper, journals, books, company website, annual
report and authentic sources was used to collect secondary data and information.
3.4 Sampling frame
The target frame that was used in this research was random selection of people in Lusaka
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3.5 Sample size and sampling techniques
The determination of sample size was drawn from a population. The sampling techniques that
were used in this research are probability sampling; simple random sampling techniques
enabled them to conclude the findings back to the larger population.
3.5.1 Sample Size
The sample for the study is made up of fifty (50) LGAs workers dealing with accounting in
Lusaka province, they were selected through a non-proportional quota sampling which is the
non-probabilistic analogue of stratified random sampling methods normally used to guarantee
that smaller groups are sufficiently represented (Mugenda, 2003).
3.5.2 Sample Techniques
Kothari (2006) stated that sampling is the collection of some parts that used to present the all
respondents based on judgment or suggestion, In other words it is a process of deriving
sample from the population. There are different types of sampling but for this research a
purposive sampling method was used. The respondents from LGAs were selected in Lusaka
province involved in accounting.
3.6 Operationalization of Research Variables.
For the operationalization of this research, the independent variable and dependent variable
was described based on the context of the research
3.7 Data collection techniques
This study essentially collected primary data using questionnaires and secondary data using
books, articles, publishers, magazine, and processed reports associated with many issues dealt
with this case. The questionnaire was divided into two sections. Section “A” was about
computerized accounting system and section “B” dealt with computerized accounting system
security. The sampling technique used in this research was random probability sampling
method which is usually popular among researchers as this technique eliminates prejudices
by allowing the results to exceed depending on the sampling population. On the contrary,
respondents are selected by researcher in non-probability sampling method may have impact
on validity of the results
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3.8 Data analysis methods
Data analysis involves the process of inspecting, cleansing, transforming, interpreting and
modelling data with the goal of discovering useful information to support the hypothesis
underlying each question (Judd & McClelland, 1989) depending on nature of the sampling,
measurement and data collecting method.
Quantitative analysis for questionnaire was performed using Statistical program Excel
editing and analysing all sorts of data due to its effectiveness in managing data with wide
range of options, generate better results and is specifically designed to analyse statistical data
(Green and Salkind, 2010).
To determine the objective of this research, statistical procedures will be conducted using
Excel to measure accuracy of the data.
3.9 Data Validity and Reliability
A questionnaire’s validity refers to the extent to which it tests what it says it is meaning
(megenda and mugenda, 2003).
In testing validity, the researcher prepared questionnaires and presented them to the
supervisor for suggestion on the relevance, clarity and suitability of the information. The
supervisor made some suggestions which were incorporated into final draft.
In order to determine the reliability of the research instruments, the researcher administered
questionnaires and tested those using different respondents, after which the researcher made
the required adjustments to provide relevant data for questionnaires
3.10 Ethical Considerations.
The study strives to avoid any form of harm to respondents by observing the ethical rules.
This is in line with Mugenda and Mugenda (2003) who stated that researchers should avoid
physical or psychological harm to the participants. The information obtained from the
respondents in the process of the whole research was kept confidential.
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4.0 DATA ANALYSIS AND PRESENTATION
This chapter presents the analysis and discusses the results as per the methodology explained
in chapter three.
4.1 Overview
Respondents Profile analysis
The study area was done in Lusaka whereby members of staff of LGAs specialised in
Accountings in Lusaka province were surveyed. The study consisted of 30 respondents from
LGAs operating in Lusaka out of 50 respondents that were planned and the response rate was
86 per cent.
Table 4. 1: Responsive Rate
Response Rate Frequency Percentage (%)
Responsive
Non Responsive
30
20
86
14
Total 50 100%
Source: Field Data (2020)
Figure 4. 1 : Responsive Rate
Source: Table 4.1 Responsive Rate (2020)
86%
14%
Responsive
Non responsive
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4.1.1 SECTION A: BACKGROUND OF RESPONDENTS
The findings in Table 4.2 indicate that, from the number of total respondents which was 30,
(63% n=19) were male while (37% n=11) were female.
Table 4. 2: Gender of respondents
Gender rate Frequency Percentage (%)
Male
Female
19
11
63
37
Total 30 100%
Source: Field Data (2020)
Figure 4. 2: Gender of respondents
Source: Table 4.2: Gender of respondents (2020)
63%
37%
male
female
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Marital Status
The issue of marital status of workers involved in financial management in an organization
especially on computerized accounting was investigated. The number of marital status is 14
implying that 46% of respondents are married. Married workers are faced with a lot of tasks
ranging from taking care of the family and therefore expected to contribute less to
organization performance compared to the unmarried. Though this may not always be the
case.
Table 4. 3: Marital Status
Marital Rate Frequency Percentage (%)
Single
Married
Widow
Separated
Divorced
8
14
2
3
3
27
46
7
10
10
Total 30 100%
Source: Field Data (2020)
Figure 4. 3: Marital Status
Source: Table 4.3: Marital Status (2020)
27%
46%
7%
10%
10%
Single
Married
Widow
Separated
Divorced
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Age of respondents
Age is important to this study since age affect performance of a worker. Age is linked to
experience and creativity.
Table 4. 4: Age of Responders
Age Frequency Percentage (%)
20 – 29
30-39
40-49
50 and above
5
15
7
3
17
50
23
10
Total 30 100%
Source: Field Data (2020)
Figure 4. 4: Age of Responders
Source: Table 4.4: Age of Responders (2020)
17%
50%
23%
10%
20- 29
30-39
40-49
50 and above
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Academic Qualification
The use of computerized accounting systems requires someone with computer knowledge
and accounting knowledge. The question of which level of education is most desired for
workers involved in financial management to bring high organization performance.
Table 4. 5: Academic Qualification
Academic Rate Frequency Percentage
Primary
Secondary
Certificate
Tertiary
Diploma
Degree
Post Graduate
0
0
0
1
2
24
3
0
0
0
3
7
80
10
Total 30 100%
Source: Field Data (2020)
Figure 4. 5: Academic Qualification
Source: Table 4.5: Academic Qualification (2020)
0%0%
0%
3%7%
80%
10%
Primary
Secondary
Certificate
Tertiary
Diploma
Degree
Post graduate
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Years of Working
The issue of experience of workers involved in financial management in an organization
especially on computerized accounting was investigated. The findings in Table 4.6 and figure
4.6 below indicate that, from the number of total respondents which was 30.
Table 4. 6: Work Experience
Number in years Frequency Percentage (%)
0 - 5
5 -10
10 - 15
15 and above
7
13
3
2
28
52
12
8
Total 30 100%
Source: Field Data (2020)
Figure 4. 6: Work Experience
Source: Table 4.6: Work Experience (2020)
28%
52%
12%
8%
0-5
5-10.
10-15.
15 and above
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Awareness is as important as experience. Being aware of the CAS is a step towards good
performance. About 90% of workers are aware of the Computerized Accounting System. The
issue of who access the computer installed with accounting software in an organization is of
important due to security reasons. About 97% of respondents said that their institutions allow
only authorized personnel to use the computer installed with the software and about 60% of
respondents claimed that the computers installed with accounting software were also used for
other purposes.
The researcher went further to know when the organization was established and the results
indicated that, about 93% of workers said the organization was established in 1913 and 7% of
workers were not sure.
4.1.2 Results Study
This section provides findings regarding the three (3) objectives of this study which are as
follows:
1. To assess the challenges those are encountered with the use of computerized accounting
systems in the organization.
The results indicate that, about 43% reported that computerized accounting system requires
training to staff which is a challenge, about 27% reported that computerized accounting
system caused loss of data, 20% are challenged with the associated additional costs, and
about 10% claimed it has resulted into wrong data entry
Table 4. 7: Challenges Encountered
Details Frequency Percentage %
Training to staff
Loss of Data
Additional cost
Wrong Data entry
13
8
6
3
43
27
20
10
Total 30 100%
Source: Field Data (2020)
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Figure 4. 7: Challenges Encountered
Source: Table 4.7: Challenges Encountered (2020)
The researcher asked if there are any measures taken to solve these challenges. The results
indicate, about 72 per cent of respondent reported that the organization is taking measures to
overcome these challenges. About 82% claim that simplification of CAS will improve
organization performance. Since the challenges encountered are related to the choice of the
computerized accounting software, the researcher investigated the factors that are considered
in choosing the accounting software. The results show that about 60% per cent of respondents
claimed cost of training is considered in choosing accounting software, about 23% claimed
initial cost of installation, and about 17% considered the acceptance by users.
2. To assess the level of usage of computerized accounting system in the organization.
The researcher found that, all respondents in the LGAs surveyed in Lusaka Province use
Computerized Accounting System. It was further found that about 77% of respondents
use Pastel in accounting system in organization, 23 per cent use Excel, and the remaining
0% per cent use Epicor.
43%
27%
20%
10%
Training to staff
Loss of Data
Additional cost
Wrong Data entry
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Table 4. 8: Level of Usage
Detail Frequency Percentage %
Pastel
Excel
EPCOR
23
7
0
77
23
0
Total 30 100%
Source: Field Data (2020)
Figure 4. 8: Level of Usage
Source: Table 4.8: Level of Usage (2020)
The researcher asked the frequency of use of these programs. The results show that, about
53% of respondents use the computerized accounting system daily, 27% use often, and the
remaining 20% use few times.
It was also found that about 87% of respondents acknowledge that CAS improves accounting
records. About 77% of respondents attend training programs on how to operate CAS, and
about 67% stated that these trainings take place annually.
Trainings are given to equip workers with the updates in CAS usage.
77%
0%
23%
Pastel
Epcor
Ms excel
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It was also found that about 97% of respondents reported that only authorized users are
allowed to use the accounting software and about 60% reported that the computer installed
with accounting software are used for other purposes.
3. To assess the organization performing with respect to adoption of computerized
accounting system
The respondents were asked to state if the usage of computerized accounting system
increases organization performance. The results indicated that about 87% of respondents
agreed that CAS increase organization performance and 13% of respondent did not agree.
Table 4. 9: Organization Performance
Valid Frequency Percentage (%)
Yes
No
26
4
87
13
Total 30 100%
Source: Field Data (2020)
Figure 4. 9: Organization Performance
Source: Table 4.9: organization performance (2020)
87%
13%
Yes
No
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The researcher further requested for the respondents to rate the organization performance
from 1 – 10. The following were the results.
Table 4. 10: Rating
Details Frequency Percentage %
1
2
3
4
5
6
7
8
9
10
0
0
0
3
11
7
4
3
2
0
0
0
0
10
37
23
13
10
7
0
Total 30 100%
Source: Field Data (2020)
Figure 4. 10: Rating
Source: Table 4.10: Rating (2020)
0, 0% 0, 0% 0, 0%
3, 10%
11, 37%
7, 23%
3, 10%
4, 13%
2, 7%
0, 0%
1
2
3
4
5
6
7
8
9
10
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It was also found that about 86% of respondents acknowledge that CAS improves accounting
records. About 77% of respondents attend training programs on how to operate CAS, and
about 67% confessed that these trainings take place annually.
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5.0 Discussion and Interpretation of findings
This chapter discusses and interprets the findings with regards to the research problem, study
objectives and literature review. The type of CAS used in an organization is a concern of this
study. As explained earlier that the majority use Pastel followed by Excel.
This study aimed at assessing the impact of computerized accounting system usage on
organization performance in Zambia with special focus in local government authorities
(LGA`s) in Lusaka Province. The study used mainly primary data from 30 respondents
selected using purposive sampling techniques.
Under the descriptive analysis the study found that, all respondents surveyed in the
LGAs use Computerized Accounting System. It was found that about 43% reported that
computerized accounting system training to staff which is a challenge, the reason might be
due to lack of time to undertake training (Proudlock et al., 1999) and the costs that come with
the training (Head, 2000). About 27% indicated that computerized accounting system caused
loss of data, 20% are challenged the additional costs, and about 10% reported that it resulted
into wrong data entry. The Researcher asked if there are any measures taken to solve these
challenges. The results indicated, about 62% of respondent reported that the organization is
taking measures to overcome these challenges. About 82% claim that simplification of CAS
will improve organization performance.
The researcher asked the frequency of use of these programs. The results show that, about
53% of respondents use the computerized accounting system daily, 27% use often, and the
remaining 20% use few times.
For security reasons about 97% of respondents said that their institutions allow only
authorized personnel to use the computer installed with the software and about 60% of
respondents claimed that the computers installed with accounting software were also used for
other purposes.
The organizations that organise training programmes to their workers perform higher than
those who ignore this practice. There is a difference in the performance between the
organization that arrange trainings for their workers in computerized accounting and those
who do not.
The organizations that allow only authorized employees to access computers installed with
accounting software and used for accounting perform higher than those who allow every
employee to access computers with accounting software.
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Also, it was found that organizations that use computer for accounting purpose only have
higher performance compared to those who allow even other uses. Organizations that use a
specialised computer for only accounting purpose are ahead in performance than those who
use the computer for many purposes.
The finding that computerized accounting system necessitates training to staff which is a
challenge calls for the central government support in training workers regularly.
The researcher found results that indicate that Marital Status, Qualification of Staff,
Experience and Awareness, Training and Other Use are significant factors influencing
organisation performance in LGAs in Lusaka. The explanation is below
Marital Status: The issue of marital status of workers involved in an organisation especially
on computerised accounting system was investigated in relation to organisation performance,
compared to those who are single or otherwise married employees involved in accounting
were found to be associated with low organisational performance the reason might be
because married people are concerned with many issues concerning family.
Qualification of Staff: The use of computerised accounting systems for instance requires
someone with computer knowledge and accounting knowledge. The question of which level
of education is most desired for workers involved in financial management to bring high
organisation performance is addressed under this study. The first observation is that,
organisation performance is positively associated with years of schooling.
Experience and awareness: This study goes beyond by presenting also the desired years of
experience for the worker to bring maximum performance in an organisation. As experience
of increases so does the performance of an organisation goes up. Being aware of the subject
matter is a step towards good performance. This study investigated how workers who are
aware of the Computerised Accounting System differ from those who are unaware in relation
to organisation performance. As expected the study confirms that awareness is positively
associated with organisation performance. Workers who are fully aware of the Computerised
Accounting System report higher organisation performance than those who are unaware.
Other Use: Another important investigation was on how many uses the computer installed
with accounting software saves. The way the computer is used influences the organization’s
performance and this can be related to reasons of security. It has been found that companies
52 | P a g e
using computers for accounting purposes have only higher performance compared to those
that do have other uses.
If the computer is being used for many purposes, computer viruses can easily attack it or just
become slower in operations due to the excessive of programs when many software fight for
the random access memory.
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6.0 Conclusions and Recommendations
6.1 Introduction
This chapter looks at the conclusion on the study, the implications and recommendations of
study which will be useful to Local Government Authority, as well as aid research on future
studies on the subject matter.
6.2 Conclusion
This study aimed at assessing the impact of computerized accounting system usage on
organization performance in Zambia with special focus in local government authorities
(LGA`s) in Lusaka Province. Specifically, this study intended to assess the level of usage of
computerized accounting system, assess organization performance and assess the challenges
encountered with the use of computerized accounting systems.
The study used mainly primary data from 30 respondents selected using purposive sampling
techniques.
All respondents surveyed in the LGAs use Computerized Accounting System. It was found
that about 43% reported that computerized accounting system requires training to staff which
is a challenge, the reason might be due to lack of time to undertake training and the costs that
come with the training . About 27% indicated that computerized accounting system caused
loss of data, 20% are challenged the additional costs, and about 10% reported that it resulted
into wrong data entry. The Researcher asked if there are any measures taken to solve these
challenges. The results indicated, about 62% of respondent reported that the organization is
taking measures to overcome these challenges. About 82% claim that simplification of CAS
will improve organization performance.
The finding that computerized accounting system necessitates training to staff which is a
challenge calls for the central government support in training workers regularly.
The researcher found results that indicate that Marital Status, Qualification of Staff,
Experience and Awareness, Training and Other Use are significant factors influencing
organisation performance in LGAs in Lusaka.
The outcomes of the study showed that computerized accounting systems have positive
impact on the performance of an organization. Computerized accounting systems in
accounting provide organized data management, and reduce on the turnaround time of an
organization.
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The outcomes of the study showed that computerized accounting systems have positive
impact on the performance of an organization. Computerized accounting systems in
accounting provide organized data management, and reduce on the turnaround time of an
organization.
6.3 Implication
The information produced by assessing the impact of computerized accounting system usage
on organization performance, could be utilised to propose future exploration points or help
different specialists to choose actions that might be suitable for a specific subject zone of
examination study.
The finding that computerized accounting system necessitates training to staff which is a
challenge calls for the central government support in training workers regularly.
6.4 Recommendations
Following the presentation of the research findings as presented in chapter four, here are the
recommendations made by the study;
Training should be a continuous process to keep workers updated with new
technology so as to keep the organization performance growing.
Organizations should be keeping up to date with their workers on all the happenings
in information technology that touch accounting practices.
Youth employment should be considered and as get more experienced, high
organization performance is realised.
Government have to set policies, strategies and programs that will enable majority of
people get education. Education is a key to performance. The use of computerized
accounting systems for instance requires someone with computer knowledge and
accounting knowledge.
Security issues should be kept in touch with regard to CAS to avoid threat in an
organization.
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6.5 Limitation of the study
The most critical limitation of this study was the process of accepting the research to be done
at the Local Government As it was not easy, time schedule for the study, and unwillingness
of some part of respondents on questionnaires and interviews during data collection processes
regarding, assessing the impact of computerized accounting system usage on organization
performance in LGAs Lusaka Province.
6.6 Suggestions for further study
This study assessed the effect of computerized accounting system usage on organizational
performance in Zambia with special focus in local government authorities (LGA`s) in Lusaka
Province. A similar study may be conducted to focus with other Provinces.
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APPENDICES
Appendix I
Research Survey Questionnaire Dear respondent,
This questionnaire is designed for academic Assessing the Impact of computerised
Accounting System usage on organisation performance. LGA`S in Lusaka Province in
Zambia
Please do not write your name in the Questionnaire
SECTIION A
Tick where applicable
1. Please indicate your gender: Male [ ]
Female [ ]
2. Please indicate your marital status: Single [ ]
Married [ ]
Widowed [ ]
Separated [ ]
Divorced [ ]
3. Please indicate your age ………………..years.
4. Please indicate your academic Qualification the box below
1 2 3 4 5 6 7
Primary Secondary Certificate Tertiary/
Vocational
Training
eg.
TEVET
Diploma Advance
diploma/
Degree
Post
Graduate
(PGDs,
Masters,
PhDs,
Prof. etc)
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5. For how long have you been working in local government ………………….years.
Dear Respondent, the researcher is a student of Cavendish University, pursuing Bachelor of
Accountancy (BAC). The questionnaire was designed for academic purposes and for partial
fulfilment of the award of a Degree in Accounting. It is through your response that the work
can be completed well. Therefore, any information will be handled with maximum
confidentiality. Please spare a few minutes of your time to answer the following questions,
they mostly involve ticking a response in the space provided and a few filling in.
TITLE: Assessing the effect of using of Computerised Accounting System on
Organisational Performance in Zambia: Case Study on LGAs in Lusaka Province.
SECTION A
Computerised Accounting System
1. When was the organisation established?
1-5 years ago [ ]
6-10 years ago [ ]
More than 10 years [ ]
2. Does the organisation use computerised accounting system in its operations?
Yes [ ]
No [ ]
3. If yes move to question 8
4. If no, how does the organisation capture its operations, especially in the preparation of
financial statements?
Manually [ ]
Microsoft tool [ ]
Other specify [ ]
5. Has your organisation ever considered using Computerised Accounting Systems
(CAS)?
Yes [ ]
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No [ ]
6. Which factors prevented or are preventing your adoption of Computerised
Accounting Systems (CAS)?
Initial Capital [ ]
Employees expertise in IT [ ]
Security features [ ]
7. Benefits of the Manual Accounting systems
Excellent Very Good Good
Timely Information [ ] [ ] [ ]
Cost of Savings [ ] [ ] [ ]
Effective Communication [ ] [ ] [ ]
Security of Information [ ] [ ] [ ]
8. Which of these computerised accounting systems is in use by the organisation?
Pastel [ ]
EPCOR [ ]
Ms excel [ ]
9. Please rate the performance of the organisation from 1-10.
10. When did the LGA computerised accounting system Used effectively?
1-5 years ago [ ]
6-10 years ago [ ]
More than 10 years [ ]
11. What computerised accounting software package is used in the LGA?
EXCEL [ ]
EPICOR [ ]
Pastel [ ]
12. What factors are considered in choosing the above accounting software?
Initial cost of installation [ ]
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Cost of training [ ]
Acceptance by users [ ]
13. To what extent does the organisation use the accounting software package selected
above?
Great extent [ ]
Moderate extent [ ]
Some extent [ ]
Question 14 – 16
Use a scale of 1-5 where
1 = Strongly Agree
2 = Agree
3 = Neutral
4 = Disagree
5 = Strongly Disagree
14. How does your organisation assess the level of computerised accounting system
usage on organisation performance?
Improvement of staff on CAS [ ]
Availability of quality report [ ]
Financial statements [ ]
15. To what extent do you agree that your choice of computerised accounting system
evaluate the performance of the organisation by the following factor?
The need to facilitate financial Management [ ]
The positive impact of CA on LGAs Performance [ ]
The need to improve quality of reports [ ]
16. To what extent do you agree to the relationship between computerised accounting
system and organisation performance?
Improvement of performance of accounting records [ ]
Time and costing saving in processing books of Accounts [ ]
Management relationship in adoption of CAS [ ]
17. In case your organisation is using manual accounting system which factors prevented
or is preventing your adoption of computerised accounting systems (CAS)?
Initial Capital [ ]
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Maintenance cost [ ]
SECTION B
COMPUTERISED ACCOUNTING SYTSEMS SECURITY
18. Are training programs organised for the accounting staff on how to operate these
software packages?
Yes [ ]
No [ ]
19. If Yes, How often does this training take place?
Monthly [ ]
Quarterly [ ]
Semi-annually [ ]
Yearly [ ]
Other please specify……………………………………………………….
20. Who has access to the use of the accounting software?
Only the authorised users [ ]
All the organisation’s staff [ ]
Others please specify…………………………………………..
21. Is the computer on which the accounting software installed used for any other
purposes apart from processing accounting data?
Yes [ ]
No [ ]
Thank you for your time
God Bless You!
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Appendix II
Interview Questions
1. Which accounting system does your organisation use?
2. What is your level of awareness on computerised accounting system usage?
3. What is your level of experience on computerised accounting system?
4. How many times do you use computerised accounting system?
5. Has the computerised accounting system adoption helped in improvement of organisation
performance?
6. Has the adoption of computerised accounting system helped to improve the accuracy of
accounting records in organisation?
7. How has the cost saving and time in organisation performance contributed by
computerised accounting?
8. Has loss of data obtained through theft, fire, human error caused by adoption of
computerised accounting system?
9. Is there any measures taken by your organisation to overcome challenges faced by
adoption of computerised accounting system for organisation performance?
10. Does the use of computerized accounting systems need extra training for staff members?
11. Has computerised accounting system usage resulted to availability of wrong date entry?
12. Has the use of computerised accounting system contributed to additional cost?
13. Has computerised accounting system usage have necessitate additional to staff member to
have training?
14. Are the measures mentioned above helping your organisation to overcome the
challenges?
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Appendix II
Tables Used in Descriptive Analysis
Gender of respondents
Gender rate Frequency Percentage (%)
Male
Female
19
11
63
37
Total 30 100%
Marital Status
Marital Rate Frequency Percentage (%)
Single
Married
Widow
Separated
Divorced
8
14
2
3
3
27
46
7
10
10
Total 30 100%
Age of Responders
Age Frequency Percentage (%)
20 – 29
30-39
40-49
50 and above
5
15
7
3
17
50
23
10
Total 30 100%
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Academic Qualification
Education Frequency Percentage (%)
Primary
Secondary
Certificate
Tertiary
Diploma
Degree
Post graduate
0
0
0
1
2
24
3
0
0
0
3
7
80
10
Total 30 100%
Work Experience
Number in years Frequency Percentage (%)
0 - 5
5 -10
10 - 15
15 and above
7
13
3
2
28
52
12
8
Total 30 100%
Establishment of organisation
Number in years Frequency Percentage (%)
1 - 5
6 -10
More than 10 years
0
0
30
0
0
100
Total 30 100%
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Use computerised accounting system in its operations
Valid Frequency Percentage (%)
Yes
No
27
3
90
10
Total 30 100%
Level of Usage
Detail Frequency Percentage %
Pastel
Excel
EPCOR
23
7
0
77
23
0
Total 30 100%
Times Used CAS
Detail Frequency Percentage %
Daily
Often
Few Times
16
8
6
53
27
20
Total 30 100%
70 | P a g e
Rating the Performance
Details Frequency Percentage %
1
2
3
4
5
6
7
8
9
10
0
0
0
3
11
7
4
3
2
0
0
0
0
10
37
23
13
10
7
0
Total 30 100%
Factors considered in choosing the accounting software
Detail Frequency Percentage %
Cost of training
Initial cost of installation
Acceptance by users
18
7
5
60
23
17
Total 30 100%
The extent to which the organisation use the accounting software
Detail Frequency Percentage %
Great extent
Moderate extent
Some extent
8
17
5
27
56
17
Total 30 100%
71 | P a g e
Training programs on how to operate the Software Packages
Detail Frequency Percentage %
Yes
No
23
7
77
23
Total 30 100%
How often does this training take place?
Detail Frequency Percentage %
Monthly
Quarterly
Semi-Annually
Yearly
Other
0
0
7
20
3
0
0
23
67
10
Total 30 100%
Who has access to the use of the accounting software?
Detail Frequency Percentage %
Only the authorised users
All the organisation’s staff
Others please specify
29
1
0
97
3
0
Total 30 100%
Is the computer on which the accounting software installed used for any other
purposes?
Detail Frequency Percentage %
Yes
No
18
12
60
40
Total 30 100%
72 | P a g e
Awareness of Computerised Accounting System
Awareness Frequency Percentage (%)
Not Aware
Aware
3
27
10
90
Total 30 100%
Challenges Encountered
Details Frequency Percentage %
Training to staff
Loss of Data
Additional cost
Wrong Data entry
13
8
6
3
43
27
20
10
Total 30 100%
Does the usage of CAS increases organization performance?
Valid Frequency Percentage (%)
Yes
No
26
4
87
13
Total 30 100%