BBA Thesis (Sax)
BBA Thesis (Sax)
BBA Thesis (Sax)
BY
JIMCAALE ABDI MUHUMED
SUPERVISED BY
August 2018
1
DECLARATION
2
APPROVAL
3
Dedication
This thesis is dedicated to all of my family who have supported all the way since
the beginning
of my studies.
Also, this thesis is dedicated to my mother and father and sisters, brother and best
teachers,
4
ACKNOWLEDGENT
We would like to thank ((my almighty ALLAH)) then all those who helped in one
way or another during the preparation of my thesis, After that we would like to
especially thank for our parents whose are key of our education, we will like to
thank first my mother’s FADUMO ALI HIRSI ALLAAH MERCY ON HER and
fathers JIMCAALE ABDI MUXUMED ALLAAH MERCY HIM and who are
part of our family life and our education at all. Secondly would like to thank our
GUULED MAXAMED JIBRIIL AND AHMED ABDI JAMA
However, we would like to gratefully thanks to all our Teachers and all our class
mates for their kind Friendship and kindness during long period of the university
whom gave us encouragement during our project preparation
Especial Acknowledgement:
Jimcaale Abdi Muhumed :Firs I would like to thank Allah who allowed me and
makes me possible the completion of this study Allah facilitated me to do this task.
Second thanks to my dear parents, especially my loved Dad, sister and brothers
those were helping me starting from my birth day up to now, and I cannot repay
their gratitude until I am alive
I would also like to thank and show my appreciation to all my friends who
supported me all the way ever since at the time I joined the University of Hargeisa,
thanks from the bottom of my heart. Moreover, we would like to express my
deepest appreciation to everyone who contributed to this research and made this
research possible by providing information, facilities, and encouragement during
the period of the research.
Last but not the least; special thanks should be given to every person who helped
us as the way to conclude our studies and this research paper as well.
Finally, word alone cannot express the thanks but we owe to everybody who given
us hand for our research by saying them May Allah Bless you for his mercies and
paradise
5
Table of Contents
Chapter one
Abstract
6
Chapter two
Literature review
Chapter three
Methodology
7
3.6.1 questionnaire . . . . . . . . ... . . . . . . . . . . . . . . . . .. . . .. . .. . . 25
CHAPTERFOUR
Research analysis and discussions
Table 10 showing single important factor did the company consider before
choosing the CAS . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .. .. . . . . .31
CHAPTER FIVE
Conclusions and Recommendations
5.1 introduction………………………………………………….. . . . .38
Reference………………………………………………………….. . . 40
Questionare. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .41
9
Chapter one
of financial information that relates to its business activities. It also has numerous processes;
some simple, others complex and burdensome. But as the business grows, acquires new
customers, enters new markets and keeps pace with constant changes in information technology,
companies need to maintain highly accurate and up-to-date accounting, inventory and statutory
records. With a substantial increase in the volume of accounting transactions and increase in
exposure of information to errors due to complexity of these accounting systems, there was a
need for a system which could store and process accounting data with increased speed, storage,
and processing capacity. This led to the development and introduction of accounting software
packages.
transactions within functional modules such as accounts payable, accounts receivable, payroll,
and trial balance. Thus, these software packages allow the whole accounting system to be run on
accounting software. It is one of the database-oriented applications wherein the transaction data
is stored in well- organized database. The user operates on such database using the required
10
interface and also takes the required reports by suitable transformations of stored data into
information. Therefore, the fundamentals of computerised accounting include all the basic
streamline all the business processes, cost-effectively and easily and helps presents the true
Due to the rapid change in technology, many small businesses prefer to track monetary
transactions with computerized software than keep track of all financial activity manually
through the use of a physical ledger. The advancementsu in information technology have
eventually led to the introduction of Computerised Accounting Systems to help produce relevant
and faithful representative financial reports for both management and external users for decision
making.
use of current technological advances. Not only has it revolutionized the traditional paper
methods of accounting, but it has also created new types of accounting applications for business.
Companies now create entire accounting information systems that integrate all business
operations, including external suppliers and vendors. Computerized accounting systems have
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1.2 Statement of the Problem
The promlem has small business in gabiley most use a manual accounting system and this
System is old so that, this is the main problem need to make solve, and the world is developing
day after a day this is the main problem need to make solve, and the world is developing, our
busines show To solve this problem, we have to create a computerized acounting system that is
easier and secure than data collection and is a new way to make your business profitable and a
modern way of using and making it easier for your business to develop economic growth. wana
to make a change to develop work performance.
the researcher would answer how small business in gabiley success of profitability computerized
accounting system
The major purpose of this study is to examine how the adoption of information technology
affects computerized accounting system to profitability small business in gabiley
To determine the relationship between the application of the manual accounting system
and the computerized accounting system in the small business
To determine the effects of computerized accounting system on the profitability of the
small business in gabiley
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To examine the impact of using computer to keep accounting records.
The focus of this study shall cover the effects computerized accounting system of the
profitability in small business of gabiley. The study lasted for a period of three months,
This study focused on effects computerized accounting system of profitability small business in
gabiley somaliland,This study is conduct in city of Somaliland especially in gabiley city. Where
most meecaad construction company company were operates in the gabiley city of Somaliland.
Geographically in gabiley region which locates northern parts of Somaliland. Therefore this
research deeply focused on effects computerized accounting system and profitability small
business in meecaad constraction company,
The researcher will embark on the research paper within the current year of 2018 with a limited
time of three sequence months from april to june 2018.
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1.7 Significance of Study
The end of this study the information provided helps in contributing knowledge in the
department of CAS of profitability and how success small businessin mecaad constraction
company. It helps the public especially the business managers to appreciate the need for effects
CAS of profitability small business to achieve targeted of business success.
Future researchers that may be interested in the same or related topic are likely to benefit from
the findings by borrowing a leaf in form of related literature.
This is so because the study will add on the existing body of knowledge as far as internal control
of business in businesses is concerned. It helps to build on the researchers’ knowledge and
understanding of the study variables. It also help the researchers to gain more skills of
conducting research and this will be important to the researchers while in office or pursuing
further studies. It also helps the study to appreciate the concept of profitability small business
how to success, the study findings will help to identify and highlight the weaknesses in effects of
computerized accounting system of profitability small business of mecaad constructoin company
and how influences business success and other business organization in gabiley
1.8 Limitation of the Study
this study has several limitations as does any other study,but some of those limitations
might have a tangible impact on the result of the study.this study aims to discover the
impact effects of computerized accounting system of profitability small busniess on gabiley
14
Chapter two
Literature review
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .
2.1 introduction
The use of Accounting Information Systems (AIS) is a widely researched topic. While there
is much research on the impact of Accounting Information Systems (AIS) in general; there is
little research specifically on Computerized Accounting Systems (CAS) and its impact on
many corporate bodies including SMEs. For example, in Australia, the Yellow Pages (1997)
reported that 76% of the small businesses surveyed had at least one computer and 75% of
small businesses concluded that the main software application package used was accountin g
(Burgess 1997 and Wenzler 1996). To investigate the impact of Computerized Accounting
Systems (CAS) on financial reporting, it would be reasonable to first review the more
comprehensive literature on CAS and financial reporting. This literature review, therefore,
begins with a discussion of the brief history of accounting, manual accounting systems and
then review studies specifically focused on Computerized Accounting Systems and financial
reporting. It will also take into account the history and financi al reporting requirement
of rural banks.
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2.2 ACCOUNTING
Accounting is not only the oldest but also the most stable of the management disciplines. In
spite of its stability and continuity, accounting has seen major changes during the past
century. It would be surprising if a century from now, accounting is the same as today.
Although we cannot look so far ahead, we can analyze the current conditions for clues about
Owners, managers, investors and other interested parties need financial information for decision
making.
and summarizing in a significant manner and in terms of money, transactions and events
which are, in part at least, of financial nature, and communicating, analysing and interpreting
According to Sunder (1997) a business organization can be seen as a set of contracts among
auditors, government, among others. Each party in the contract agrees to contribute resources.
For example, employees and managers contribute skills, shareholders and creditors contribute
capital, vendors provide machinery and materials, and customers provide cash.
functions in an organization.
16
The first requirement of control is to devise a system of measuring the contributions made by
each agent. It should also determine the amount of incentive due them, and monitor the
distribution of inducements so that each agent receives his due, no more and no less.
In addition, accounting helps compare the contributions made and the incentives received by
information to various factor markets to keep them liquid and find replacements for
participants who leave. Finally, accounting makes some information available in the form of
common knowledge or public disclosure to help reduce conflict among participants at the
In its second function, the accounting system measures, records, and controls the outflow of
resources from the organization. Payroll and benefit accounts for employees, shipping to
customers, accounts payable to suppliers, and tax accounts measure the outflow of resources
In its third function, the accounting system compares the data on resource inflows and
outflows to determine who has fulfilled his contract and to what degree. The accounting
system prepares comparative reports on resource inflows and outflows related to various
individuals in the organization. These statements are used to evaluate and adjust the contracts
In a fourth function, accounting helps assemble and maintain the contract set by finding the
appropriate participants in the factor markets for labour, managers, customers, suppliers, and
investors among others. All these PEOPLE must be convinced that participating in such an
17
enterprise is in their own best interests. Pro forma financial statements, business plans, and
budgets prepared by the organisation before the enterprise starts functioning help agents
assess the costs and benefits of participating in the proposed enterprise in various roles. When
contractual slots fall vacant, they must be filled from the factor markets (Sunder 1997).
auditors, government, among others. Each party in the contract agrees to contribute resources.
For example, employees and managers contribute skills, shareholders and creditors contribute
capital, vendors provide machinery and materials, and customers provide cash.
functions in an organization.
The first requirement of control is to devise a system of measuring the contributions made by
each agent. It should also determine the amount of incentive due them, and monitor the
distribution of inducements so that each agent receives his due, no more and no less.
In addition, accounting helps compare the contributions made and the incentives received by
information to various factor markets to keep them liquid and find replacements for
participants who leave. Finally, accounting makes some information available in the form of
common knowledge or public disclosure to help reduce conflict among participants at the
18
In its second function, the accounting system measures, records, and controls the outflow of
resources from the organization. Payroll and benefit accounts for employees, shipping to
customers, accounts payable to suppliers, and tax accounts measure the outflow of resources
In its third function, the accounting system compares the data on resource inflows and
outflows to determine who has fulfilled his contract and to what degree. The accounting
system prepares comparative reports on resource inflows and outflows related to various
individuals in the organization. These statements are used to evaluate and adjust the contracts
In a fourth function, accounting helps assemble and maintain the contract set by finding the
appropriate participants in the factor markets for labour, managers, customers, suppliers, and
investors among others. All these PEOPLE must be convinced that participating in such an
enterprise is in their own best interests. Pro forma financial statements, business plans, and
budgets prepared by the organisation before the enterprise starts functioning help agents
assess the costs and benefits of participating in the proposed enterprise in various roles. When
contractual slots fall vacant, they must be filled from the factor markets (Sunder 1997).
19
2.4.1 time saving and cost
Using a Computerized Accounting Systems saves companies time and money. The use of a
computer makes inputting accounting information simple. Transactions are entered into the
system and the system processes and posts transactions accordingly. Computerized
Accounting Systems reduce staff time preparing accounts and reduce audit expenses as
records are neat, up-to-date and accurate. Better use is made of resources and time; cash flow
should improve through better debt collection and inventory control. More importantly, the
system helps present financial reports on time to aid in the economic decision making process
of external users.
is entered into the system, it makes finding the information easy. Employees can look up any
financial information whenever it is needed. There is less room for errors as only one
accounting entry is needed for each transaction rather than two (or three) for a manual
system. The accounting records are automatically updated and so account balances (e.g.
Storing the data for the business is very vital. When the information is entered to the computer it
is easy to get information. Companies perform backups on the system regularly to avoid
losing any information. The introduction of Computerized Accounting Systems provides the
20
2.5 challenges of computerized system
realiability of the system, in here gabiley most of the business use a manual because it is not
recognized
The general purpose of financial reporting is provide financial information about reporting entity
that is usifull to present and potential entity investors, lenders and other creditors in decions
The decions involve buying, selling or holding equity and dept instrument and providing or
Hence the technology is progressing development day after a day, the companies of gabiley
especially meecaad construction company and beder company uses computerized system, in
order to prepare financial
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2.6.2 importance of financial reporting
The importance of financial reporting cannot be over emphasized. It is required by each and
every stakeholder for multiple reasons & purposes. The following points highlights why
In helps and organization to comply with various statues and regulatory requirements.
The organizations are required to file financial statements to ROC, Government
Agencies. In case of listed companies, quarterly as well as annual results are required to
be filed to stock exchanges and published.
It facilitates statutory audit. The Statutory auditors are required to audit the financial
statements
of an organization to express their opinion.
Financial Reports forms backbone for financial planning, analysis, bench marking and
decision making. These are used for above purposes by various stakeholders.
Financial reporting helps organizations to raise capital both domestic as well as
overseas.
On the basis of financials, the public in large can analyze the performance of the
organization as well as of its managemen
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Chapter three
Methodology
3.0. introduction
This chapter seeks to discuss the population and sample size, the techniques used for
sampling and data collection, the various data collection instruments as well as the
Procedures used in measuring and analyzing the data. This chapter there fore seeks to describe
The research study on focus on the effects of computerised accounting system and profitability
small business in gabiley
The reason is to increase the reliability. In this research consist five chapters
Chapter one is a introduction that summarizes background of the study, problem statement,
Chapter two: literature review is talk about what has been said in previous researchers in this
topic.
Chapter three research methods: in this chapter will be answer topic {effect of computerized
system to small business} this will be looking research methods and methodology
Chapter four is related chapter three and discuss the development of the research
23
the chapter five and the final section, the researcher shall provide explanations on the research
The salovent’s formula to king find out the minimum sample size
N
N= ❑
1+ N ( e 2 ) Where N =simle ¿ ¿ ¿
N = population of the study
1= constant
N= 23
1+23(0.O5)2
N= 23
1+23 (0.0025)
N= 23
1+0.0575
N= 23 = 21 respondents
1.0575
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3.5 sampling procedure
Respondents were grouped into stratas consisting of the top level, functional level and
operational level and purposive sampling was conducted in each strata to get relevant
information for the study without any bias.
Purposive sampling is where sampling elements were selected by the researcher because of the
unique roles they were to play in providing the necessary information for the study. Through
selection of respondents from different departments, the sample was obtained, and the sample
provided the necessary data for the purpose of the study.
3.6.Data collection
Primary data was collected through the use of questionnaires and in-depth interviews.
Secondary data was also sourced through publications, company’s annual report and the use
of the internet
3.6.1 questionnaire
The questioner were taken the following personal for their respective responses.
25
In terms of qualitative data, references and comparisons were made to existing and past
Information. We also applied our personal judgment in the analysis where we deemed it very
necessary.
obstacles
CHAPTERFOUR
4.1 introduction
In the previous chapter, the research design, the sample of the study, the data collection
techniques, the method of data analysis and the statistical procedure of the research were
discussed. The focus of the research was on areas that the researchers consider very
critical in the effects
analysis made, factors considered before choosing accounting software and the non –
26
4.2 characteristics of respondents
The demographic characteristics on respondents in this section include gender, age, education
Male 15 60
Female 10 40
Total 25 100
From Table 1 above, it’s indicated that 60% of the respondents were male, while 40% were
Female. This implies there more male employees than female employees in gabiley companies.
Below 20years 1 4
20-30 years 9 36
31-40year 10 40
Above 50 years 5 20
Total 25 100
From Table 2 above, its indicated that the biggest numbers of respondents were in the age
bracket of between of 31-40 represented by 40% of the total respondents. 36% were in the age
bracket of 20-30 years, below 20 years 4% and 20% above 50 years this implies that gabiley
27
small business employs mature employees who are experienced
Degree
Master
20% Secondary
Diploma
48%
From Table 3 above it’s indicated that the categories of degree level of education, respondent
were 12% of the total respondents. 12% were diploma holders, 48% A level, 24% Primary
level.
1-2 years 12 48
3-4 years 10 40
Above 5 years 1 4
Total 25 100
From Table 4 above its indicated that Majority of the employees has worked between 1-2 years
representing 48% of the total respondents. 40% of the employees have worked between 3-4
28
years, 8% less than 1year and above 5 years 4%
Married 13 52
Single 12 48
Divorced -- --
Widowed -- --
Total 25 100
From Table 5 above its indicated 52% were married, while 48% were single and none of the
respondent was divorced or widowed. This implies there more married than single employees in
Drivers 5 20
Security guard 4 16
Accountant 2 8
Cashier 1 4
Sale marketer 6 24
Secretary 1 4
Receptionists 1 4
Messengers 1 4
TOTAL 25 100
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Source primary data
From Table 6 above, its indicated that 16% were store keepers, 20% Drivers, 16% security
massager. This implies there more professional employees than low staff since majority were
All employees make contribution to the organization according to the duties that are assigned to
them, the organization employ them because of the qualification and skills that they have.
1-5 2 8
6-10 years 5 20
11-15 years 10 40
Total 25 100
From the table 7 above, showing 8% is number of years of the company exists, 20% 6-10 years
Yes 10 40
No 15 60
TOTAL 20 100
30
From the table 8 above, showing that 40% in gabiley’s companies use a computerized system
Initial cos 7 28
Cost benefit 8 32
Acceptance of workers 5 20
Knowledge of employees 5 20
TOTAL 25 100
From the table 9 above is showing factors considered computerized system of the company 28%
is initial cost , 32% is a cost benefit, 20% is acceptance of workers and 20% is a knowledge of
employees
TABLE 10 showing single important factor did the company consider before choosing the
CAS.
Cost saving 7 28
Easy to use 3 12
Speed 5 20
Storage 10 40
TOTAL 25 100
Source of primary data
From the table 10 above, majority of respondents represented 40% stated that it is the more
important factor is storage and second is cost saving 28%. So that every business want to save
31
his data.
Tally accounting 3 12
Best book 4 16
Quick books 10 40
Peach tree 8 32
Total 25 100
From the table 11 above, majority respondent represented that the most accounting system use
the companies is quick books this implies it is the most approperaite accounting system in
gabiley small business. Respondents tally accounting 12%, best book is 16%, quick books 40%
most companies use this system accounting, and peach tree 32%.
Cost effectiveness 7 28
TOTAL 25 100
From the above table 12 represent the factors informed company’s decision to go for
computerized system. 7 respondents of cost effectiveness is 28%, accurate and timely report is
32
10 respondents 10% and 8 respondent of efficiency and effectiveness is 32%.
This implies accurate and timely report is more than other factors.
Three month 6 24
Total 25 100
From the table 13 above showing the period of closing entry 6 respondents 24% is making in
one month, 5 respondents 20% make with in two month, 6 respondents make fisical period with
in three months represent 24%, and above three months are 8 respondents stated 32%.
This implies above three months is more than other financial reportings
Soft ware 10 40
Maul 15 60
Total 25 100
From the above table 12 represent the which system is easy majority of respondents are 60%
Say manual is easy while 15 respondents are 40%. This implies manual is more than
computerized system{CAS}.
33
15. Which of these computerised accounting systems is in use by the company?
peachtree
Quick 39%
book
60%
Tally
account
1%
34
16. importance of computerized system?
45
40
35
30
25
20
15
10
5
0
financial reporting
5
4
3
2
1
0
35
18. Does your company use computerized accounting system
Yes 9 36
No 14 64
Total 23 100
service
both
5 product
product
4.5
4
3.5
3 both
2.5
2
1.5
1 service
0.5
0
Column3
36
20. What is your competitive edge?
Low cost 12 48
high quality 6 24
Flexibility 7 28
Total. 25 100
Managers 3 12
Consultant 2 8
Employee 15 60
Other 5 20
Total. 25 100
37
CHAPTER 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1 INTRODUCTION
This chapter presents of major findings arising from the data analysis, makes
appropriate recommendations for the effective adoption and management of the effects
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2 Conclusion
The study revealed that because of the numerous benefits that are associated with
Computerised Accounting System more importantly its ability to produce and present
relevant and faithful representative financial reports to end users, gabiley business is
This is going to serve as a platform in which all the small business in the country are going to be
challenges such as; high purchase, installation and maintenance cost, computer failure,
However, the advantages from the use of a Computerised Accounting System far outweigh
the problems and challenges as it has impacted the financial reporting of the small business
positively.
38
5.4 Recommendations
To make hierarchy or job description in order to facilitate the activity of the business.
To employ the students who graduate university because they have knowledge.
To gave good training use computerised accounting system and how to get profitability
small business
$30
Internet charges/bill
$5
Communication cost
$78
Total
References
39
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .
ABS (Australian Bureau of Statistics), (2000), Catalogue 8129.0 Business Use of
on
deSaintis, J., A brief history of Accounting: From prehistoric to the Information Age
Beaver, William H. (1978) "Current Trends in Corporate Disclosure", Journal of
Accountancy, V.147: http://www.capitalideasonline.com/articles/index.php?id=2224
Gorton, M., (1999): “Use of financial management techniques in the UK-based small
Systems: pp 61-80
Head, B., (2000), “Small Business Should Log On and Write Off,” Business
Review.
Questionnaire
40
QUESTIONNAIRE
INTRODUCTION
system to the profitability small business in gabiley. The study is in partial fulfillment of the
academic
requirements for Award of degree of Bachelor degree . The questionnaire is purely for
Academic purpose and the information provided shall be treated with utmost confidentiality. I
kindly request you to spare a few minutes and fill this questionnaire as genuinely as possible.
Thank you
4. Your experience?
1.less than one year ( )
2.1—2 year ( )
3.3—4 year ( )
4.5 yrs above ( )
5.non ( )
COMPANY’S PROFILE Please choose the correct box by ticking the extent you agree in
reference to the statements
Name of Company:__________________________________________
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SECTION B: PROFILE OF THE COMPANY
6.respondent occupation?
Messengers ( )
Yes ( ) No ( )
10. single important factor did the company consider before choosing the CAS.?
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Tally accounting ( ) Best book ( ) Quick books ( ) Peach tree ( )
With in one month ( ) With in two month ( ) Three month ( ) Above three mont ( )
time saving and cost ( ) storage and speed ( ) organizing and accuracy ( )
Yes ( ) No ( )
43
44