CHAPTER ONE
INTRODUCTION
1.1 Background Of The Study
Accounting
according to Adebiyi, (2010:12) is the measurement, processing and
communication of financial information about economic entities. Accounting,
which has been called the "language of business", measures the
results of an organization's economic activities and conveys this information
to a variety of users including investors, creditors, management, and
regulators (Agbasi, 2008:43).
Anunolam
(2006:88) defined accounting as the systematic and comprehensive recording of
financial transactions pertaining to a business. Accounting also refers to the
process of summarizing, analyzing and reporting these transactions. The
financial statements that summarize a large company's operations, financial
position and cash flows over a particular period are a concise summary of
hundreds of thousands of financial transactions it may have entered into over
this period.
Accounting
is one of the key functions for almost any business; it may be handled by a
bookkeeper and accountant at small firms or by sizeable finance departments
with dozens of employees at larger companies.
Dreytus,
(2009: 12) is of the view that the reports generated by various streams of
accounting, such as cost accounting and management accounting, are invaluable
in helping management make informed decisions. While basic accounting functions
can be handled by a bookkeeper, advanced accounting is handled by qualified
accountants who possess designations such as lCAN (Institute of Chartered
Accountants). All accounting designations are the culmination of years of study
and rigorous examinations, combined with a minimum number of years-of practical
accounting experience.
Electronic
accounting according to Eze, (2010:21) is the application of' online and
internet technologies to the business accounting function. Similar to e-mail
being an electronic version of traditional mail, electronic accounting is
electronic enablement of lawful accounting and traceable accounting processes
which were traditionally manual and paper-based.
Nweze
(2008:56) opined that electronic accounting involves performing regular
accounting functions, accounting research and the accounting training and
education through various computer based /internet based accounting tools
such-as digital tool kits, various internet resources, international web-based
materials institute and company databases which are internet based, web links,
internet based accounting software and electronic financial spreadsheet tools
to provide efficient decision making.
Electronic
accounting improve the corporate performance of organizations by enhancing its
diverse accounting activities such as associated with accounts payable,
accounts receivable, financial reporting and bank and account reconciliations.
The above variables are the dependent variables which this study is meant to
establish a relationship with the independent variable (electronic accounting).
1.2 Statement Of The Problem
Using
electronic accounting system comes with its own set of problems, such as the
need to protect against data loss through power failure or viruses, and the
danger of hackers stealing data. This can alter information on both accounts
payables and receivables of an organization thereby affecting its overall
performance.
Computer
fraud is also a concern and situations where there are no systems of control to
monitor access to accounting information can go to a great extent in affecting
diverse activities of the organization. It could lead to wrong financial
reporting or even poor bank and account reconciliations.
1.3 Objectives Of The Study
The
broad objective of this study is to appraise the effect of electronic accounting.
The
specific objectives include the following:
1. To identify the effect of electronic
accounting on the account receivables-of an organization.
2. To examine the extent to which electronic
accounting have impact on account payables of an organization.
3. To determine how electronic accounting
impacts on financial reporting of an organization.
4. To examine the effect of electronic
accounting on bank and account reconciliations of organizations.
1.4 Research Questions
The
following research questions are stated for this study:
1. Does electronic accounting have significant
effect on the account receivables of an organization?
2. To what extent does electronic accounting
have impact on account payables of an organization?
3. How does electronic accounting impact on
financial reporting of an organization?
4. Does electronic accounting have significant
effect on bank and account reconciliations of organizations?
1.5 Research Hypotheses
The
following hypotheses are formulated for this study:
Hypothesis One
Ho1:
Electronic accounting does not have significant effect on the account
receivables of an organization.
HA1:
Electronic accounting has significant effect on the account receivables of an
organization.
Hypothesis Two
Ho2:
Electronic accounting does not have impact on account payables of an
organization.
HA2:
Electronic accounting has impact on account payables of an organization.
Hypothesis Three
Ho3:
Electronic accounting does not impact on financial reporting of an
organization. .
HA3:
Electronic accounting has impact on financial reporting of an organization.
Hypothesis Four
Ho4:
Electronic accounting does not have significant effect on bank and account
reconciliations of organizations.
HA4:
Electronic accounting has significant effect on bank and account
reconciliations of organizations.
1.6 Significance Of The Study
This
study will be of enormous significance especially to the management and staff
of Abbot Resources Enugu as it will enlighten them on the diverse roles of
electronic accounting in enhancing organizational performance.
The
recommendations of this study will suggest for other firms on the strategies or
diverse electronic accounting tools to promote organizational performance.
The
general public will not just be enlightened on the concept of electronic
accounting but will be made to understand how to apply its tools in their
diverse businesses for enhanced performance. Students and other researchers
will widen their scope from the information contained in this study.
1.7 Scope And Of The Study
This
study covered electronic accounting in the corporate performance of
organizations. It focused on Abbot Resources, Enugu.
1.8 Definition Of Terms
Electronic Accounting:
This is the application of online and internet technologies to the business
accounting function.
Account Payable:
This is an accounting entry that represents an entity's obligation to payoff a
short-term debt to its creditors.
Account Receivables: Money
owed by customers (individuals or corporations) to another entity in exchange
for goods or services that have been delivered or used, but not yet paid for.
Profitability:
This is used primarily to describe any ongoing process is which a good or a service
would produce more benefits than consequences.
Financial Reporting:
This is the process of producing the reports, called statements that disclose
an organization's financial status to management, investors and the government.
Performance: The
accomplishment of a given task measured against present known standards of
accuracy, completeness, cost, and speed.
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