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TIMA-ADE OF UNIVERSITY

The effects of computerized accounting system


to the profitability small business in gabiley

BY
JIMCAALE ABDI MUHUMED

SUPERVISED BY

MR GULEID MOHAMED JIBRIIL

PROPOSAL RESEARCH REPORT SUBMITTED TO TIMA-


ADDE UNIVERSITY
IN PARTIAL FULLFILMENT OF THE AWARD OF THE
DEGREE
OF BACHELOR OF BUSINESS ADMINSTRATION .

August 2018
1
DECLARATION

I here by declare that research report entitled “ THE EFFECT OF


COMPUTERIZED ACCOUNTING SYSTEM TO THE PROFITABILITY
SMALL BUSINESS IN GABILEY” (case study of gabiley )is entirely my
original work
except where acknowledged and that it has never been submitted before
to any other university
or any other institution of higher learning for the award of a Degree.
SIGNATURE……………………………………
DATE……………………………… . . . . . . . . . .
JIMCAALE CABDI MUXUMED
(Researcher)

2
APPROVAL

This research report entitled “EFFECT OF COMPUTERIZED


ACCOUNTING SYSTEM ” has been submitted
for examination with my approval as the candidate’s University
supervisor
Signature…………………………
……………………………..
MR.GULED MOHAMED JIBRIIL DATE
(Supervisor)

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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,

At last, this thesis is dedicated to all my teachers specially my supervisor

guuleed maxamed jibriil

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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

1.1 background of the study……………………………………………..10

1.2 Statement of the problem…………………………………………….12

1.3 Purpose of the study………………………………………………. . .12

1.4 Objectives of the Study……………………………………….. . . . . .12

1.4.1 Specific objective . . . ..... ................... ............. . . . . . . . . . . . . . ...12

1.5 Research Questions.............................................................................13

1.6 Scope of Study……………………………………………….. . . . . . 13

1.6.1 Geographical Scope.…………………………… ……………… . 13

1.6.2 Theoretical Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


1.6.3 Time scope . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

1.7 Significance of Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

1.8 Limitation of the Study .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

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Chapter two

Literature review

2.1 introduction …….………………….... . . . . . . . . . . . . . . . . . . 15

2.2 ACCOUNTING ….....…………………..... . . . . .. . . . . . . . . .16

2.3 role/functions of accounting . . . . . . . … .………………… . 18

2.4 importance of computerized system . . . . . . . . . . . . . . . . . … .19

2.4.1 time saving and cost . . . . . . . .…………………………… .20

2.4.2 organizing and accuracy . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2.4.3 storage and speed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2.5 challenges of computerized system . . . . . . . . . . . . . . . . . . . . .21

2.6 financial reporting . . . . . . . .... . . . . . . . . . . . . . . . . . . . . . . . 21

2.6.1 financial reporting gabiley small business . . . . . . . . . . . . . 21

2.6.2 importance of financial reporting . . . . . . . . . . . . . . . . . . . . 22

Chapter three

Methodology

3.0. introduction …………………………………………………23

3.1 Research area……………………………………………… . .23

3.2 research desing……………………………………………… 23

3.3 Target population. . . . . . . . . . ……………………………… 24

3.4 sampling size. . . . . . . . . . . . . ……………………………… 24

3.5 sampling procedure……… .……………………………. … 25

3.6.Data collection …………………………………………. . . .25

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3.6.1 questionnaire . . . . . . . . ... . . . . . . . . . . . . . . . . .. . . .. . .. . . 25

3.6.2 conducting the interview . . . . . . . . . . . .. . . . . ....... . . . . . . 25

3.7. Data analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

3.8. limitations of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

CHAPTERFOUR
Research analysis and discussions

4.1 introduction………………………………………………… . .26

4.2 characteristics of respondents……………………………….. .27

Table 1 Showing Respondent gender . . . . . . . . . . . . . . . . . . . . . . . 27

Table 2 Showing Respondents age . . . . . . . . . . . . . . . . . . . . . . . . . 27

Table 3 educational level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Table 4 Showing Number of years worked . . . . . . . . . . . . . . . . . . .28

Table 5 Showing Respondent marital status . . . . . . . . . . . . . . . . . . 29

Table 6 showing respondent occupation . . . . . . . . . . . . . . . . . . . . . .29

Table 7 Showing when the company established . . . . . . . . . . . . . .30

Table 8 showing the company use computerized . . . . . . . . . . . . . . .30

Table 9 showing foctors considered computerized system . . . . . . . 31

Table 10 showing single important factor did the company consider before
choosing the CAS . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .. .. . . . . .31

Table 11 showing kind of computerized accounting systems in use by the


Company . . . . . . . . .. . .. . . . .. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .32

Table 12 showing cost benefit analysis . . . . . . . . . . . . . . . . . . . . . . . 32

Table 13 showing company financial reporting period . . . . . . . . . . . 33


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Table 14 showing prepairing closing entry which one is easy . . . . . 33

Table 15 Which of these computerised accounting systems is in use by the


company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .34

Table 16 importance of computerized system . . .. . . . . . . . . . . . . . . . .35

Table 17 financial reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..35

Table 18 Does your company use computerized accounting system ..36

Table .19 What does the company sell . . . . . . . . . . . . . . . . . . . . . . . . ..36

Table 20 What is your competitive edge . . . . . . . . . . . . . . . . . . . . . . . .37

Table 21 The job title of the respondents . . . . . . . . . . . . . . . . . . . . . . . .37

CHAPTER FIVE
Conclusions and Recommendations
5.1 introduction………………………………………………….. . . . .38

5.2 conclusion…………………………………………………….. . . .38

5.4 recommendation………………………………………………. . ..39

5.4Appendix A: Budget of the research study . . . . . . . . . . . . . .. . . .39

Reference………………………………………………………….. . . 40

Questionare. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .41

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Chapter one

1.1 Background of the Study


Accounting takes an important role in operating an organization. Every business must keep track

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.

Accounting Software is a class of computer programs that perform accounting operations.

Accounting Software is an application software that records and processes accounting

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

a computer hence the name Computerised Accounting System.

A computerized accounting system records accounting transactions using a computer and

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

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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

requirements of any database-oriented application in computers. It helps simplify, integrate, and

streamline all the business processes, cost-effectively and easily and helps presents the true

picture of all the business undertakings to users of financial reports.

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.

Somaliland Computerized accounting tends to involve dedicated accounting software and

digital spreadsheets to keep track of a business or client's financial transactions. It is a beneficial

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

replaced manual-based accounting in virtually all businesses and organizations, providing

accountants, managers, employees and stockholder’s access to vital accounting information at

the touch of a button.

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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.

Computerised Accounting Systems became the ‘engine of growth’ in business organisations. It


there fore involves the computerization of accounting information systems which is established
in order to facilitate decision making. These are associated with a numbers of benefits like speed
of carrying out routine transactions, timeliness, quick analysis, accuracy and reporting.

the researcher would answer how small business in gabiley success of profitability computerized
accounting system

1.3 Purpose of the study


The main purpose of the present study was to examine the effects computerized accounting
system of profitability small business in gabiley. The secondary purpose was to investigate the
impact of small businesses on the economic development, by identifying and understanding the
best ways that small businesses can be successful

1.4 Objectives of the Study

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

1.4.1 Specific objective

 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.

1.5 Research Questions

This study addresses the following questions:

 What are barriers to successful effects CAS profitability small business?


 what are the effects of using computers to accounting system?
 How the effect CAS the small business in gabiley?
 what extent does the application effects of computerized accounting system impacted on
the profitability of the small business in gabiley

1.6 Scope of Study

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,

1.6.1 Geographical Scope

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,

1.6.2 Theoretical Scope

It is evident that the effects CAS of


profitability small business problem has generated substantial attention in the recent past. Bajari
and Tadelis (2001) asserted that the primary focus of literature touching on effects CAS and
profitability problem has been on the low profit sector

1.6.3 Time scope

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

 The research intended to generate understanding on the role of eefects


computerised accounting sysytem profitability small business
 My research findings will provide data literature for other organizations and
academicians.
 Findings of my research will benefit the students,business owners,and how to
success
 The research came up with ways to enable institutional small business develop the
markets to get profit

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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

financial reporting. Computerized Accounting Systems (CAS), however, is widely used in

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

these used accounting software. Burgess (1997) in a review of IT adoption by Australian

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

what to expect in the next decade or two (Sunder 1999).

Accounting provides financial information about a business or a not-for-profit organisation.

Owners, managers, investors and other interested parties need financial information for decision

making.

Financial accounting is the art of systematically identifying, measuring, recording, classifying

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

the results there of (Woode &Sangster, 2008)

2.3 role/functions of accounting

According to Sunder (1997) a business organization can be seen as a set of contracts among

various participants: employees, shareholders, customers, vendors, managers, creditors,

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.

Accounting therefore plays four main

functions in an organization.

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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

each participant and distributing this information. Furthermore, accounting distributes

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

time they renegotiate their contracts (Sunder 1997).

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

to the government (Sunder 1997).

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

of these individuals (Sunder 1997).

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).

2.3 role/functions of accounting


According to Sunder (1997) a business organization can be seen as a set of contracts among

various participants: employees, shareholders, customers, vendors, managers, creditors,

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.

Accounting therefore plays four main

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

each participant and distributing this information. Furthermore, accounting distributes

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

time they renegotiate their contracts (Sunder 1997).

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

to the government (Sunder 1997).

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

of these individuals (Sunder 1997).

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).

2.4 importance of computerized system

Computerized system is very important for business organization in various ways.

At the of time saving and financial information for the business.

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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.

2.4.2 organizing and accuracy

A Computerized Accounting System enables businesses to stay organized. When information

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.

customer accounts) will always be up-to-date.

2.4.3 storage and speed

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

ability to see the real-time state of the company’s financial position.

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2.5 challenges of computerized system

Numerous of benefits of computerized system there is al so challenges. This include the

realiability of the system, in here gabiley most of the business use a manual because it is not

recognized

2.6 financial reporting

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

about providing resources to the entity.

The decions involve buying, selling or holding equity and dept instrument and providing or

selling loans and other forms of credit

This financial report generally consists of:

Statement of financial position at the end of the period

Statement of comprehensive income for the period

Statement of cash flows for the period

2.6.1 financial reporting gabiley small business

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

statement for the end of the year December 31.

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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

financial reporting framework is important –

  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

how the whole research was conducted

3.1 Research area


This study was conducted in gabiley.

The research study on focus on the effects of computerised accounting system and profitability
small business in gabiley

3.2 research desing


The research strategy adopted by the researchers is the multiple case study approach.

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,

objective of the study, singnificance and scope of the study

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

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the chapter five and the final section, the researcher shall provide explanations on the research

implication. In this section well-founded recommendations will also be included questionnaire

3.3 Target population

This research is focused 60 small business of the population in gabiley district.

3.4 sampling size


These were selected using purposive sampling method where respondents were chosen
depending on their ability to provide the required information for the study. A sample of 23
respondents were considered from small business gabiley. 17 questionnaires were issued to the
top level, 3 to the functional level and 5 to the operational level.

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

E= marginal error (0.05)

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.

a. The general managers of three small business

b. Head of finance and accounting deparment of the tree small business

3.6.2 conducting the interview


The personnel of the various departments were asked follow-up questions on the
questionnaire to clarify some issues and also to obtain any other information useful to
the research that was not captured by the questionnaire.

3.7. Data analysis


Considering the nature of the data that was collected, it was very appropriate to use

Both quantitative and qualitative approaches to analyze the data.

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.

3.8. limitations of the study


If there is a work involved there is a challenges meet during research, this include the following

obstacles

 Time: research needs more to bring an effective information.


 Finances: is the first thing that enable to make effective research.
 The last one is: some people didn’t give you a enough information.

CHAPTERFOUR

Research analysis and discussions

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

Computerised Accounting System to profitability small business in gabiley(CAS). These areas


include: the need for CAS, the costbenefit

analysis made, factors considered before choosing accounting software and the non –

financial benefits and problems associated with the use of CAS.

26
4.2 characteristics of respondents
The demographic characteristics on respondents in this section include gender, age, education

levels, number of year’s worked and marital status

Table 1 Showing Respondent gender

Gender Frequency Percent

Male 15 60

Female 10 40

Total 25 100

Source primary data.

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.

Table 2 Showing Respondents age

Age Frequency Percent

Below 20years 1 4

20-30 years 9 36

31-40year 10 40

Above 50 years 5 20

Total 25 100

Source primary data

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

Table 3 Showing Respondents education level

Respodent Education level


8%
24%

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.

Table 4 Showing Number of years worked

Number of years worked Frequenc Percent

Less than 1 year 2 8

1-2 years 12 48

3-4 years 10 40

Above 5 years 1 4

Total 25 100

Source primary data.

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%

This implies that gabiley companies employees 1-2years experience.

Table 5 Showing Respondent marital status

Marital status Frequency Percent

Married 13 52

Single 12 48

Divorced -- --

Widowed -- --

Total 25 100

Source primary data

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

gabiley small business

Table 6 showing respondent occupation

Occupation Frequency Percentage


Storekeepers 4 16

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

29
Source primary data

From Table 6 above, its indicated that 16% were store keepers, 20% Drivers, 16% security

guards, 8% accountant, 4% cashier, 24% sale marketer, 4% secretary, 4% receptionists and 4%

massager. This implies there more professional employees than low staff since majority were

sale marketer representing 24 % of the respondent.

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.

Table 7 Showing when the company established

Years Frequency Percent

1-5 2 8

6-10 years 5 20

11-15 years 10 40

More than years 8 32

Total 25 100

Source primary data

From the table 7 above, showing 8% is number of years of the company exists, 20% 6-10 years

and 11-15 40% and 32% is more than 16 years.

This implies most companies in gabiley are 40%.

Table 8 showing the company use computerized

Category frequency Percent

Yes 10 40

No 15 60

TOTAL 20 100

Source of primary data

30
From the table 8 above, showing that 40% in gabiley’s companies use a computerized system

while 60% is not use computerized system.

This implies most of the companies in gabiley is use manual system.

Table 9 showing foctors considered computerized system

Category Frequency Percent

Initial cos 7 28

Cost benefit 8 32

Acceptance of workers 5 20

Knowledge of employees 5 20

TOTAL 25 100

Source of primary data

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.

Factors Frequency Percent

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.

TABLE 11 showing kind of computerized accounting systems in use by the Company

Category Frequency Percent

Tally accounting 3 12

Best book 4 16

Quick books 10 40

Peach tree 8 32

Total 25 100

Source of primary data

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%.

TABLE 12 showing cost benefit analysis

Major factors informed the company’s decision to go for computerized

accounting system against a manual systems

Category Frequency Percent

Cost effectiveness 7 28

accurate and timely report 10 40

Efficiency and effectiveness 8 32

TOTAL 25 100

Source primary data

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.

TABLE 13 showing company financial reporting period

Category Frequency Percent

With in one month 6 24

With in two month 5 20

Three month 6 24

Above three mont 8 32

Total 25 100

Source primary data

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

TABLE 14 showing prepairing closing entry which one is easy

Category Frequency Percent

Soft ware 10 40

Maul 15 60

Total 25 100

Source primary data

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

time saving and


cost storage and speed
organizing and
accuracy

17. . financial reporting?

financial reporting
5
4
3
2
1
0

35
18. Does your company use computerized accounting system

computerized accounting Frequency Percent


system

Yes 9 36

No 14 64

Total 23 100

19. What does the company sell?

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?

competitive edge Frequency Percent

Low cost 12 48

high quality 6 24

Flexibility 7 28

Total. 25 100

Source primary data.

21. The job title of the respondents

job title Frequency Percent

Managers 3 12

Consultant 2 8

Employee 15 60

Other 5 20

Total. 25 100

37
CHAPTER 5

CONCLUSIONS AND RECOMMENDATIONS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Computerized Accounting Systems to profitability in small business. The study is concluded at

the last section Of this chapter.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

assisting all companies to migrate into a common Computerised Accounting System.

This is going to serve as a platform in which all the small business in the country are going to be

networked to each other to facilitate faster and efficient accounting system.

Undoubtedly, with the adoption of Computerised Accounting Systems, problems and

challenges such as; high purchase, installation and maintenance cost, computer failure,

inadequate information technology expertise and time involving are to be expected.

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 generate the technological change, because it is depend on their future success.

 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 create computerised accounting system

 To gave good training use computerised accounting system and how to get profitability
small business

Appendix A: Budget of the research study

Items in detailed format Amount in dollars


$15
Stationeries

$30
Internet charges/bill

Printing expenses $15

$5
Communication cost

Transportation cost $13

$78
Total

References

39
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .
 ABS (Australian Bureau of Statistics), (2000), Catalogue 8129.0 Business Use of

Information Technology, Australia. Commonwealth of Australia

 Baren, V., (2010), The Importance of a Computerized Accounting System, available

on

 Burgess, S., 1998, Information Technology in Small Business in Australia: A summary

of Recent Studies, Paper presented to the USASBE Conference, Florida; January

15-18.[Available online o http://www.sbaer.uca.edu/Research/1998/USASBE],Assessed

on20th October, 2011

 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

and medium sized enterprises: Empirical research findings”, Journal of financiail

management and analysis, Vol. 12 No. 1, pp 56-64

 Grabski, S., and Marsh, J. (1994), “Integrating Accounting and Manufacturing

Information Systems; an ABC and REA-based approach”, Journal of Information

Systems: pp 61-80

 Greuning, H., V. (2006): International Financial Reporting Standards; A practical

guide,4 thed. The World Bank

 Head, B., (2000), “Small Business Should Log On and Write Off,” Business

Review.

Questionnaire
40
QUESTIONNAIRE

INTRODUCTION

Dear Respondent, Am a student of tima ade University currently undertaking a research on


impact of computerized accounting

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

Background characteristics of the respondent profile

SECTION A: PROFILE OF THE RESPONDENTS

1. Please indicate your gender.


Male ( ) Female ( )

2. Age group in years?

Below 20 ( ) 20-30 ( ) 31-40 ( ) 50- above ( )

3. What is your education level?

Degree ( ) Diploma ( ) Secondery ( ) Primary ( ) None ( )

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:__________________________________________

41
SECTION B: PROFILE OF THE COMPANY

5. Respondent marital status?

Married ( ) Single ( ) Divorced ( ) Widowed ( )

6.respondent occupation?

Storekeepers ( ) Drivers ( ) Security guard ( ) Accountant ( )

Cashier ( ) Sale marketer ( ) Secretary ( ) Receptionists ( )

Messengers ( )

7. when the company established?

1-5 years ( ) 6-10 years ( ) 11-15 years ( ) More than years ( )

SECTION C: QUESTIONS ABOUT COMPUTERIZED ACCOUNTING SYSTEM

8. The company use computerized

Yes ( ) No ( )

9.foctors considered computerized system?

Category ( ) Frequency Percent ( ) Initial cos ( ) Cost benefit ( )

Acceptance of workers ( ) Knowledge of employees ( )

10. single important factor did the company consider before choosing the CAS.?

Cost saving ( ) Easy to use ( ) Speed ( ) Storage ( )

11. kind of computerized accounting systems in use by the Company?

42
Tally accounting ( ) Best book ( ) Quick books ( ) Peach tree ( )

12. cost benefit analysis?

Cost effectiveness ( ) accurate and timely report ( ) Efficiency and effectiveness ( )

13. company financial reporting period?

With in one month ( ) With in two month ( ) Three month ( ) Above three mont ( )

14. prepairing closing entry which one is easy?

Soft ware ( ) Maul ( )

15. Which of these computerised accounting systems is in use by the company?

Peachtree ( ) Quick book ( )

16. importance of computerized system?

time saving and cost ( ) storage and speed ( ) organizing and accuracy ( )

17. . financial reporting?

Statement of financial position at the end of the period ( )

Statement of comprehensive income for the period ( )

Statement of cash flows for the period ( )

18. Does your company use computerized accounting system

Yes ( ) No ( )

19. What does the company sell?

Product ( ) service ( ) both ( )

20. What is your competitive edge?

Low cost ( ) high quality ( ) flexibility ( ) other ( )

21. The job title of the respondents:

Managers ( ) Consultant ( ) Employee ( ) Other ( )

43
44

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