CHAPTER TWO

INTRODUCTION

1.1 Background of the study

Any business, whether it is a major or small proprietorship, a for-profit or non-

profit entity, has accounting as its foundation. Today, accounting occupies a
significant position in the corporate world and is crucial to the efficient operation
of any company. Accounting requires a wide range of tasks, from easy to complex
and even time-consuming. Businesses must stay up with ongoing information
technology advancements in order to maintain exceptionally accurate and current
financial, statutory records, and inventories (Igbaria,e tal.,1997).

Many small firms complete their bookkeeping manually and are happy with the
results. Due to accounting software's significantly lower cost, other people might
think about using a computerized system. As information technologies have
developed, manual accounting approaches have progressively been insufficient for
decision-making (Martin,Brecht.2013). Therefore, public and private sector
businesses as well as the banking industry view computerization as a necessary
tool for assuring effective and efficient information flow in the recording,
processing, and analysis of financial data in both developing and developed
countries. Management information must be updated often and continuously due to
the always shifting corporate environment. Accounting is not the only aspect of
nature that is changing; businesses and how they operate are also adapting to the
shifting preferences and tastes of their clients. To keep up with these changes,
several technologies, such accounting software, have been developed.
To satisfy the increased demand for current and correct data, accounting software,
which combines accounting and information technology, was created
(Wickramsainghe,et al.,2017).

Accounting software processes and records accounting operations in functional

modules including payroll, trial balance, accounts payable, and accounts
receivable. The Computerized Accounting System is the consequence of various
software packages making it possible to run the full accounting system on a
computer (Ware, 2019).

Computerized accounting typically uses spreadsheets and specialized accounting

software to monitor a client's or a business's financial activities. Examples include
blockchain technology, new books, Xero, Sage, and Quick Book. With
computerized accounting, the company will have improved visibility into ongoing
business processes and access to fundamental accounting data. Computerization
reduces transaction time, which raises the caliber of financial reporting. For
instance, timely, precise, and trustworthy data can be produced (Alfred, 2014).
Without the aid of technology, such as computerized accounting, it might be more
challenging for organizations to make wise business decisions (Sametal.2012).

In order to replace the manual accounting process, organizations are now

implementing accounting software that can coordinate all business transactions,
particularly when it comes to reporting financial statements to the many users of
accounting information.

1.2 A description of the issue

A significant disadvantage of the manual accounting system is how long it takes to
handle client information. In order to do their banking transactions, customers
waste important time standing in long lines at the bank. There is also a
considerable labor cost in terms of salaries and other expenses.

Transactions involving SME are challenging, time-consuming, and uncomfortable

due to the manual accounting system, and maintaining manual accounts is onerous
and time-consuming. The drawbacks of utilizing a manual accounting system are
as follows.
This study fills a research void by focusing on how computerized accounting
affects small and medium-sized business process performance in Nigeria. The
Nigerian economy's SME sector is a crucial one. SMEs contribute a far greater
percentage of GDP than is currently seen in Nigeria in nations with the same levels
of development as Nigeria (Banj,2020). Therefore, the goal of this study is to
determine whether computerized accounting has improved SME earnings and,
consequently, their performance. Small and medium-sized businesses (SMEs) in
Nigeria have generated almost 48% of the country's GDP over the past five years,
according to the Nigeria Bureau of Statistics. They make up around 50% of
industrial jobs and almost 90% of manufacturing-related businesses, with a
combined population of about 17.4 million. Despite this contribution, SME face
numerous obstacles, such as a lack of managerial abilities, a lack of suitable
legislation to safeguard small businesses from the competition from multinational
corporations and imported goods, a lack of funding, or difficulty receiving a soft
credit. As companies need more information, whether financial or non-financial, to
deal with a higher scale of uncertainties in the competitive market and require at a
processing capacity and system to improve to suit their information needs (Van de
Ven & Drazin, 1984), adoption of accounting software becomes a critical factor in
determining the survival and success of an organization. Due to the widespread
adoption of computerized accounting, it is now quicker and more productive to
prepare and produce financial data. Despite its benefits, employing computerized
accounting has certain downsides. A lack of power supply, theft of software,
untrained staff, and theft of data from software are a few examples. This study
investigates whether enhanced performance and higher profits have resulted from
computerized accounting.

1.3 Objectives of the study

The broad objective of this research work is to examine the impact of
computerized accounting system in a firm’s business process performance. The
specific objectives of this research work include the following;

1. To determine the impact of computerized accounting on the firm's profitability.

2. To determine the influence of a computerized accounting system on budget ary
control in order to improve performance.
3. To assess the difficulties of a computerized accounting systems and their impact
on a company's financial performance.

1.4 Research Questions

1. To what extent does computerized accounting have an impact on a company's

profitability?

2. What impact does computerized accounting have on budgetary control in

attempt to improve a company's performance?
3. What impact do the challenges of a computerized accounting system have on the
firm's performance?

1.5 Hypotheses

The following null hypotheses (Ho) were developed to guide the study;
1. Ho: Computerized Accounting does not affect on the profitability of the
firm.

2. Ho: Computerized Accounting has no impact on budget ary control so as

to increase the firm’s performance.

3. Ho: The challenges of computerized accounting do not affect the

performance of the firm

1.6 Significance Of the study

This study examines how computerized accounting systems affect a firm's

development, revealing several previously unknown concerns and elements that
are pertinent to the study. The following groups will gain from this research

Management: Whether it's a company, a non-profit, a government entity, or a

corporation, management is the administrative branch of the organization. This
study will be very helpful to management since it will make suggestions for
potential financial accounting programs that management can employ to support
business growth.

Academics: The main objective of this study is to significantly contribute to the

body of accounting literature. The unknown, disagreements, and divergent points
of view never cease to exist in academics. Therefore, as a contribution to this field
of study in accounting, findings and recommendations will be added to the body of
literature for future reference; however, localizing this research work to Nigeria is
very important in this study, improving the body of knowledge of the majority of
academia.

Government: The study is helpful to the government since its conclusions can aid it
in formulating laws that may support or discourage the use of computerized
accounting systems in enterprises, particularly in those areas that have an impact
on taxation.

SMEs: Since this study will focus especially on SMEs, it will unquestionably
benefit them. The research will assist SMEs in deciding whether or not to
implement computerized accounting systems across their numerous firms.

1.7 Scope/Limitation of the study

In particular, SMEs are used as examples in this study to highlight the effects of
computerized accounting systems on business process performance. The study
won't examine large corporations or governmental entities; instead, it will solely
examine how CAS has affected select SMEs. In the paper, dependability, speed,
and efficiency of CAS in enterprises are discussed.

1.8 Definition of terms

Accounting: Accounting is the practice of maintaining track of a company's affairs,

records, and files through the methodical development and analysis of information
for users and non-users alike.
The fundamental idea: The underlying qualitative and quantitative data that
support a company's, security's, or currency's financial or economic health, as well
as a sits eventual financial assessment, are known as fundamental principles. 2021
(Scott&Majaski)

A business is defined as an organization or enterprising body that engages in

commercial, industrial, or professional activities. Businesses can be for-profit
companies or organizations that are committed to charitable causes or other social
causes. (2020,Hayes&James)

Technology, often known as the manipulation and change of the human

environment, is the application of scientific knowledge to the practical aims of
human life. 2021 (Zeidan & Augustyn)

Financial data: Information concerning a company's financial situation is broken

down into smaller informational units or groupings. Internal management analyzes
the data to assess business performance and decide whether to adjust tactics and
strategies (Grimsley,2016).

Computerized Accounting System (CAS)

 CHAPTER TWO

LITERATURE REVIEW

2.1 CONCEPTUAL FRAMEWORK

What is a system?

A system, as described by the free online dictionary, is a collection of

interconnected items or components that together constitute a complicated whole.
A system is, in essence, a cohesive whole made up of related components that
perform well together. A system is a collection of pieces that interact or depend on
one another to form a mechanism, a network, or other collective entity. It can also
refer to a methodical or coordinated collection of elements such as facts, ideas, or
other components.

Any group of connected components that come together to form an organized

whole with a single goal is what Hartzell (2006) defines as a system. Examples
include the central nervous system of a single person and the family and kingship
structures of a society. According to Stallings (2010), a computer system, like any
system, is made up of a collection of interconnected parts. The system is best
described in terms of its organizational structure, how parts are interrelated, and
how well each part works together.

2.1.1 ELECTRONICAL ACCOUNTING

Utilizing computers and related technologies, computerized accounting systems are
used to collect, record, store, process, and disseminate financial data to
stakeholders.

Computerized accounting systems are computer programs that may be accessed

remotely via the Internet, a network server, or a company's PC.

Having a clear, transparent, and trustworthy method to track financial transactions

is the goal of computerized accounting.

To meet the needs of small firms, numerous software developers have created a
range of computerized accounting systems or accounting software, some of which
are commercially distributed and others are open-source programs.

Some accounting systems can be offered through the cloud, enabling SMEs to take
advantage of computerized accounting solutions without having to host any
software or storage in their own offices. For some SMEs, the setup and use of
accounting software has proven to be difficult.

The following are some benefits of computerized accounting:

Work speed: Using a computerized accounting system enables firms to quickly and
accurately compile and print documents like invoices, purchase orders, and payroll,
which helps businesses save time.

Computerization: Computerized systems efficiently carry out ordinary tasks,

automatically and timely updating records. Software applications perform all
calculations automatically, which lowers errors and boosts productivity.
Increased Accuracy: Businesses no longer need to manually examine their
accounts every time new data is entered because computerized accounting systems
make sure that all entered data is computed correctly. Included are revenue,
expenses, transactional information, account reconciliation, period end
adjustments, stock, and VAT.

Accounting processes are integrated with all other company processes: The field of
accounting does not exist in isolation. It is connected to other commercial
operations like sales, purchases, banking, and taxation. In computerized
accounting, all the related processes can be handled with just one data entry.

when organizations adopt a computerized system to expedite their accounting and

bookkeeping procedures, they can save money on resources. the basis of the study
already mentioned that cas is significantly less expensive than manual accounting
methods. because many computerized accounting systems are available for a
modest monthly membership fee, it will result in financial savings.

storage: a computer is capable of quickly transferring data from storage to

memory, processing it, and then re-storing it for later use. huge volumes of data are
stored on many computers, and this data is always available for processing.

today, the majority of computers have the ability to often connect with one another.
the few information processing cycle operations — input, process, output, and
storage – that are possible for computers with this capacity.

2.1.2 computerized accounting systems

there are two main types of computerized accounting systems: low-end systems
and high-end systems.
1. basic accounting methods

general ledger, accounts receivable, accounts payable, inventory, and payroll are
all included in these accounting systems' comprehensive accounting solutions.
large databases or frequent daily usage are not intended for these programs. they
are not designed for client-server environments, but they can be used there to some
extent. one write plus, for instance, will only function in a client-server or network
context when users are working on projects for various businesses. popular low-
end accounting programs include peachtree for windows and the one write plus dos
package.

2. expensive accounting software

high-end accounting systems use the client server partially or entirely.

These software packages are designed to be used in mid-sized businesses and are
capable of handling large databases, with high daily volume.In addition, some of
these packages provide full-fledged manufacturing modules, something the low-
end systems can never provide.

2.1.3 ACCOUNTING SOFTWARE PACKAGES

According to free Marriam online, accounting software programs are computer

programs that keep track of an organization's regular financial activities. Over the
past several decades, it has significantly enhanced the productivity of back offices.
The size of a firm's operations, the users, and various divisions or sectors within a
corporation all influence the types of accounting software packages used in
business. Depending on how much the company is ready to spend on the
accounting software, there are a number of solutions that may be tailored for them.
Quick Books is one of the accounting software programs. bundles of ERP software
from Peach Tree Sage (Enterprise Resources Systems).

I. QUICK BOOKS ACCOUNTING

Small businesses and sole proprietorship may use simple accounting software
programs like Quick Books or basic computers programs like Microsoft word or
Excel. These programs are in expensive and often basis solutions for billing,
paying vendors and recording sales. Quick Books is an easy to use load and click
style of software that allows individuals to quickly set up their business by
answering of few, ledgers and invoicing modules are provided for business owners
to use in their daily operations.

II PEACH TREE ACCOUNTING (SAGE’S SOFTWARE PACKAGES)

Mid-size business software solutions have greater features for several users.
Depending on the number of users utilizing the program and the size of the
organization, companies can choose from a variety of models. The customization
possibilities help restrict the purchase of pointless modules despite the higher cost.
Software products from Sage can be server- or web-based, enabling users to access
corporate data from many places.

II. ENTERPRISE RESOURCES SYSTEMS (ERPS)

Large businesses may choose ERPs as their preferred accounting software

packages if they have numerous operational departments or locations. Oracle,
PeopleSoft, Sage, and SAP AG are the most popular ERPs providers, offering
 customizable packages that can take several weeks to completely integrate in a
business.

2.1.4 APPLICATION OF COMPUTER IN ACCOUNTING SYSTEM

Accounting software and maintaining accounting records for huge companies are
some examples of computer applications in accounting. Suppose you are an
accountant for a major international corporation. what you see in how it operates.
Worldwide, there are millions of clients. Is it feasible to manually record
everything? It will not be practical. As a result, computers will make it simple to
maintain limitless accounting records without worrying about forgetting anything.

Automation of all financial records: Financial accounts are automatically created

by computer software, and computerized accounting helps to integrate all financial
records, from receipts to statements of financial condition.

Accounting records shown graphically: Accounting results may be represented

graphically on a computer. The sale trends are displayed in graphs, cherts, and
diagrams.

Not just the sales patterns, but everything in the accounting division may be
viewed graphically. It will be lot simpler and easier to understand than merely
reading manual financial results.

We all know that employee salaries are the most expensive business expense, so
separate payroll accounting is an option. It must therefore be independently
documented. Computers can be useful here.
Simple account updating: If any issues arise, we can quickly correct them.
Everything will be fixed on its own. In manual accounting, it is not practical. The
updated accounting reports can be sent more quickly using a variety of techniques.
An automated reminder system, for instance, might send the client the most recent
debtor balance.

Wikipedia, a free online encyclopedia, lists a few computer applications in

accounting systems.

Word processing program, database, and spread sheet

Word processing program. It is a piece of software that aids in the processing of

text. Processing comprises adding, removing, altering, and moving words,
paragraphs, and other elements. A word processor's ability to combine names and
addresses with standard text to make it appear as though the letter is personalized,
even in the case of a circular letter, is an example of word processing. Word
processing is the preparation of types of scripts using computing facilities for the
storage and manipulation of text.

2. Data source It consists of straightforward data collecting on a certain issue. You

can manipulate the data in the desired form using a database file. Therefore, a
database enables us to work with facts and figures to store and manipulate data in
any desired way, for example, by enabling the preparation of a trial balance,
trading and profit and loss accounts, a list of debtors and creditors, purchase and
sales forecasts, etc. from the same basic information.
3. spreadsheet: one of the software tools that has expanded the usefulness of
computers for accounting tasks is the spreadsheet. you can use spreadsheet apps to
create both horizontal and vertical columns on a large piece of paper. you can
change the height and width of each column as necessary.

2.1.5 distinction between manual and computerized accounting system

According to the free online Marriam, it has the following differences.

Speed is the primary distinction between a manual and a computerized system.

Accounting software handles data processing and report generation significantly
more quickly than manual systems. Software programs perform calculations
automatically, reducing errors and boosting productivity. Once data has been
entered, a computerized system allows you to make reports by just clicking a
button.

Cost is another factor that separates manual from digital systems. Paper and pencil
manual accounting is far less expensive than a computerized system, which needs a
computer, software, training, and program maintenance. With the cost of printers,
paper, ink, and other vendors, costs can quickly mount up.

Back-up The simplicity of backup for a computerized system is a third distinction

between manual and computerized systems.
All transactions can be saved and backed up in case of fire or other mishap. You
cannot do this with paper records, unless you make copies of all pages – long and
inefficient process.

2.1.6 PROBLEMS AND CONTROLS OF COMPUTERIZED

ACCOUNTING SYSTEM

Free online Marriam claims that the issues with computerized accounting systems
have their own unique set of issues, such as the requirement for protection against
data loss due to power outages or other reasons, as well as the threat of data theft
by hackers.

Who has access to the information, particularly consumer information, is another

issue with computer fraud? Management can be held personally responsible for the
loss of data that has been correctly entered into the system if there is a security
breach and data is taken. Data entry errors can cause an entire collection of data to
be lost. Reducing the amount of electricity used and waste produced by computers
is known as "green computing." Strategies that support green computing include
recycling, regulating manufacturing process, extending the life of computers, and
immediately donating or properly disposing of replaced computers.

2.1.7 IMPACT OF COMPUTERIZED ACCOUNTING ON A FIRM'S

PROFITABILITY

According to Gartner 2021, when we discuss portability in business, we mean a

measurement of an organization's profit in proportion to costs. In comparison to a
less efficient firm, which must spend more to produce the same profit, more
efficient organizations will realize more profit as a percentage of each expense.
Profitability is the term used in accounting to describe a scenario where a company
is making a profit. One of the metrics that can be used to determine a company's
valuation is profitability, which is typically expressed as a multiple of its annual
amount of portability. The net profit ratio and earnings-per-share ratio are used to
gauge profitability. While the profits per share ratio displays profit on a per-share
basis, the net profit ratio compares after-tax profit to revenues.

Given all said, it is critical that firms use computerized accounting, especially in
our contemporary day. This is because computerized accounting makes it possible
to quickly and accurately produce data that can be relied upon. With the aid of
computerized accounting, information such as sales receipts, vouchers,
depreciation costs, gross and net profits, taxable income, and more are accurately
delivered (due to the fact that it minimizes the chance of error).

This information are given to the organizational management to make informed

decisions and thereby allowing then to carefully decide on strategies to employ so
as to minimize cost and at the same time maximize profit.

2.1.8 COMPUTERIZED ACCOUNTING SYSTEM AND BUDGETARY

CONTROL

Budgeting control is described by CIMA as "the establishment of budgets relating

to the responsibilities of executives to the requirements of a policy, and the
continuous comparison of actual cost with budgeted result, either to secure by
individual action the objective of that policy or to provide a basis for its revision."
Simply put, budgetary control refers to controlling a company's income and
expenses. In actuality, it is routinely comparing actual revenue or spending to
anticipated income or expenditure to see whether corrective action is necessary or
not (University of Cambridge, 2020). Accountants are interested in profit
forecasting to determine the best way to provide accounting information to their
beneficiaries and support economic decision makers (Foerster et al., 2016).
Budgeting is the practice of predicting future profits. Budgetary control is one of
the instruments used in management to keep things under control. It serves as a
benchmark against which real performance is measured and evaluated.

According to the definitions given above, budgetary control primarily focuses on

the following: planning, controlling, coordinating, and communicating financial
records. The organization's plans are followed thanks to the budgetary control that
ensures this.

Computerized accounting systems can enhance an organization's financial and

managerial capabilities by enhancing the management of cash, debt, and liabilities,
utilizing historical data to provide better budget modelling processes, lowering
transaction costs, gaining effective control over finances, and budget execution.

Computerized accounting systems enhance the accuracy, responsibility, and

transparency of financial reporting. These technologies also make it more likely to
be uncovered, which deters corruption and fraud. The detection of excessive
payments, fraud, and theft is made possible by a number of features (such as
automated identification of exceptions to normal operations, patterns of suspicious
activity, automated cross-referencing of personal identification numbers for fraud,
automated cross-referencing of asset inventories with equipment purchases,
automated cash disbursement rules, identification of ghost workers, etc.).

Because the recording and comparison of the actual and budgeted financial
outcomes take place within the computerized accounting system, computerized
accounting aids management in implementing budgetary control. Then information
and reports on any variances gotten from the system are given to management for
effective decision making thereby increasing performance within the firm.

2.1.9 SMALL AND MEDIUM ENTERPRISE (SME)

What do SMEs do?

Small and medium-sized enterprises (SMEs) or small and medium-sized

businesses (SMBs) are companies with staff and income below a specified
threshold, according to Wikipedia. Depending on the nation and the person
defining the terms, small-business, microbusiness, and medium-sized business
definitions vary. Micro Small and Medium Enterprises (MSMEs) in Nigeria are
typically defined as businesses with up to 250 employees. with medium

The following are the definitions of small businesses: -

• Micro businesses: between 1 and 9 employees

• Small Businesses: those with 10 to 49 employees.

• Medium-sized businesses: those with 50 to 249 employees.

SMEs are independent, non-subsidiary companies or organizations that employ

fewer people. Businesses that maintain revenues, assets, or a particular number of
employees below a certain level are known as small and mid-size companies
(SMEs). This number varies between nations. (Mekwunye, 2018).

2.1 10 CHALLENGES ASSOCIATED WITH THE USE OF

COMPUTERIZED ACCOUNTING
1. Program manipulation: A hacker, competitor, or rival may alter, erase, or modify
one or more programs belonging to a corporation, rendering the entire software
useless. One can access the CAS of an organization and play about with it using
computer viruses.

2. Software theft: The most frequent offense involving computers. Software

purchased by a business may be copied by an employee and installed on his own
computer. To prevent unauthorized usage of hardware and software, precautions
and controls might be used.

3. High Training Cost: Operating a computer is not easy. A computer user needs to
be knowledgeable and skilled. Understanding accounting software is also
necessary.

4. program manipulation: a hacker, competitor, or rival may alter, erase, or modify

one or more programs belonging to a corporation, rendering the entire software
useless. one can access the cas of an organization and play about with it using
computer viruses.

5. software theft: the most frequent offense involving computers. software

purchased by a business may be copied by an employee and installed on his own
computer. to prevent unauthorized usage of hardware and software, precautions
and controls might be used.

6. high training cost: operating a computer is not easy. a computer user needs to be
knowledgeable and skilled. understanding accounting software is also necessary.

2.2 THEORETICAL REVIEW

2.2.1 System theory

Every organization is made up of a number of interconnected systems or
subsystems, according to the systems theory of management. Each part of the
overall system interacts with the others and depends on them to function properly.
The unified single system of the organization is made up of these subsystems. For
instance, a company is a system that can contain sub-systems for marketing,
production, accounting, finance, and other things. Because of this, it is
recommended that the various sub-systems be studied in relation to one another
rather than individually.

In order to accomplish the goals and objectives of the organization, the

computerized accounting system collaborates harmoniously with other systems
within the company. In this regard, it may be said that in order to improve
performance, CAS will need to collaborate with other organizational resources,
particularly man and machine. The system theory demonstrates that improvements
in business performance can only occur when all of an organization's systems work
in harmony, and CAS is one of those systems.

2.2.2. Resource-Based View Theory

In 1991, Barney created the resource-based view hypothesis. According to

Barney's (1991) resource-based perspective, sustainable advantage comes from
doing things better, from producing superior abilities and resources. A strategy for
evaluating potential elements that could be employed to provide business
organizations a competitive edge is provided by the resource-based view. The
ability of certain resources to produce a sustained competitive advantage is not a
property shared by all resources, which is a crucial conclusion from the resource-
based approach (Ganyam et al., 2019). The resource-based paradigm has three
levels: capability, competence, and skills. 2016 (Cragg et al). (Cragg et al.).
Technical, managerial, and general management skill sets are only a few of the
many skill sets that are related to competence and skills. The management of
resources by enterprises is referred to as capability.

Computerized accounting systems are another tool at a firm's disposal. Therefore,

the firm will use its capability, competency, and skill sets for increased
organizational performance in order to handle the computerized accounting system
appropriately and adequately.

2.2.3. Modern management theory

People go to work for a variety of reasons, including to achieve their goals for
happiness, contentment, and lifestyles, in accordance with the modern management
philosophy. This notion can be used by managers to create programs that will
assist employees meet their needs and develop their skills over the long run. The
complexity of people is acknowledged by contemporary management philosophy.
Their needs change over time, and the organization can build a variety of abilities
and skills in them through on-the-job training and other initiatives. To make
decisions without being influenced by emotions, management can also use
quantitative techniques including statistical, cost, revenue, and return-on-
investment (ROI) assessments.

In light of this, it may be claimed that contemporary management theory prioritizes

employees' job happiness. Therefore, Computerized accounting systems which are
faster and less strenuous to operate can be adopted by organizations as a means of
improving employees work lifestyles. At the same time, employees get to improve
on there skills whenever CAS is adopted by an organization.
2.2.4 Technology Acceptance theory

The Technology Acceptance Theory in information systems outlines how humans

come to accept and use technology. This strategy suggests perceived usefulness
and perceived usability as two distinctive components (Admire, 2019). According
to Mbogo (2017), TAT has demonstrated to be a successful theoretical model for
aiding in the comprehension and defense of use behavior in the development of
information systems. Numerous empirical studies have tested it, and the tolls used
with the model have shown to be of excellent quality and produce results that are
reliable in terms of statistics.

One of the drawbacks of TAT is that it cannot fully explain user behavior. They
also consider additional factors, such as perceived accessibility, perceived
affordability, perceived satisfaction, and perceived support, to examine the success
factors related to the use of CAS (Admire, 2019). This hypothesis states that a
computerized accounting system will be implemented once it is user-friendly and
essential to the operations of the firm.

2.2.5 Contingency Theory

In 1964, Fiedler introduced the contingency theory as a theory of managerial

leadership. According to Fiedler (1964), the contingency hypothesis holds that
there is no one best way to lead and that a leadership strategy that works well in
one situation could not work well in another.

According to contingency theory, the computerized accounting system should

consider the organizational structure and environment of the company when
making specific decisions. 2016 (Douglas and Dean). If we apply this to the topic,
we can say that in order for an organization to improve, the management should
focus more on CAS than utilizing a manual accounting system, as well as using the
best software for their operations.

2.2.6 Scientific Management

Through the use of controlled experiments, Frederick Taylor (1856–1915)

increased worker productivity in the late 19th century. The results of these studies
led him to the conclusion that the scientific method, rather than judgment or
discretion, is the best way to measure efficiency in the workplace.

Scientific management promotes standardization, specialization, aptitude-based

assignment, rigorous training, and tight supervision. These procedures are the only
way a business can achieve productivity and efficiency. Often at the expense of the
workers' humanity, this management theory seeks the best way to complete a task.
From this, it can be concluded that CAS is a scientific technique that requires
guidance and extensive training to learn. With the training and skills acquired from
the use of CAS, it can be said without any doubt that the organizational
performance will surely improve.

2.3 EMPIRICAL REVIEW

Simon and co. (2020) The effect of computerized accounting systems on the
accuracy of financial reports in Ghana's banking industry has been studied.
Therefore, the goal of this study is to assess the effect of computerized accounting
systems on the integrity of Ghanaian banks' financial reporting. The survey
approach served as the data collection tool. All banks that are listed on the Ghana
Stock Exchange made up the study population. The study was conducted using a
quantitative research methodology, and version 21 of the Statistical Package for
Social Sciences (SPSS) was used to handle the data. A unit increase in an
automated computerized accounting system will result in a 0.50 increment in the
quality of bank financial reports, according to study findings, which set all other
autonomous factors at zero. The implication of this study is that, for banks to have
quality financial reports efforts must be made to invest in computerized
accountings systems so as to improve the speed, practicality, accuracy and
relevance of the financial reports of their operations.

In 2014, Atakanbi conducted study on computerized accounting in small and

contemporary businesses. In the Sunyani Municipality, the study looked at how
computerized accounting affected SMEs there. The particular goals were to
identify the types of accounting systems used by SMEs, to assess how much
computerized accounting is used by SMEs in their operations, and to look into the
advantages and disadvantages of using computerized accounting systems. The
research design was used in the study. Both quantitative and qualitative analyses of
the data collected were performed. To lessen the likelihood of study restrictions,
the researcher used random and purposeful sampling approaches. The statistical
package for social science (SPSS) and the excel spreadsheet program were used to
analyze the primary data that had been obtained. The investigation discovered that
Sunyani's accounting system is manual because so many labor firms do not use
CAS. The study also found that CAS has a favorable effect on how SMEs operate.
Finally, it was shown that SNEs had difficulties adopting and implementing CAS.
Based on his research, the researcher came to the conclusion that SMEs' incapacity
to use CAS in their routine accounting procedures has a detrimental impact on how
well those businesses perform. The National Board for Small Scale Industries
(NBSSI) should work with other charitable NGOs to establish training
organizations to provide basic ICT training skills and development programs to
SMEs operators at affordable costs, according to the researcher's recommendation
for better decision-making and improved performance of SMEs. They will learn
fundamental ICT skills as a result, enabling them to maintain business records.

Baranidharan (2018) studied how small businesses in Thanjavur District used

computers for accounting. The goal of the study was to determine how the
adoption of CAS was impacted by infrastructure availability. According to the
study, cost, resource accessibility, and human resource competency should be
prioritized in that order. For society to effectively implement CAS, there aren't
enough computers or other supporting infrastructure. The basic ICT resources that
are available are mostly used for administrative tasks and a small number of
accounting operations.

The study comes to the further conclusion that small business human resources
lack the computer literacy necessary to apply CAS. This is primarily due to the
lack of emphasis on ICT skills in their hiring process. The study demonstrates that
managers are aware of the advantages of computerized accounting systems, and as
a result, they will be willing to use these systems once they are installed in order to
benefit from accounting information systems, provided that there is funding
available to build out ICT infrastructure and provide managers with the necessary
training.

Using empirical data from a randomized experiment in Nigeria, Oladipupo et al.

(2013) conducted study on computer-based accounting systems in small and
medium-sized businesses. Through a structured survey targeted at finance
and accounting executives of the businesses that are largely in charge of
processing business transactions, they carried out an empirical analysis. To
 further explain the level of CBAS use by Nigerian SMEs, this information
was sought. A wide range of industries were represented among the
respondents, including manufacturing, agriculture, mining, tourism, IT
services, healthcare, wholesale and retail commerce, and general services.
Our research revealed that the usage of CBAS by Nigerian SMEs is highly
significant because all companies operating in all industries evaluated use
one sort of accounting software or another. This was accomplished through a
mix of cross tabulation and logistical regression analysis. This result implies
that professional accountants must work to constantly improve their abilities
in order to be relevant in the profession.

Mustapha (2018) conducted research on how small and medium-sized businesses

in Maiduguri Metropolis perceived the impact of computerized accounting systems
on their operational efficacy. The study only made use of primary data. Out of a
total of 334 respondents, 182 were sampled and given questionnaires. 124 of the
182 questionnaires in the sample size were correctly and validly returned for data
analysis. Three categories made up the sampled respondents: fully automated (FA),
partially automated (PA), and not automated (NA) (FA). Using descriptive analysis
and a test of an established hypothesis, SPSS 20.0 was used to evaluate the data.
Analysis of Variance was used to test the hypothesis (ANOVA). The results
showed that the test revealed significant differences (P 0.05). According to the
study, managing receivables accounts was operationally effective. The report
suggests that SMEs adopt CBAS for improved performance, improved company
operations, and increased competitiveness.

The Adoption of Computerized Accounting System in Small and Medium

Enterprises in Melaka, Malaysia, was conducted by Mohd et al. in 2019. The goal
of this study project was to look at SME use of CAS and to determine the factors
influencing its acceptance among SMEs in Melaka. An investigation of the CEO
Innovativeness Factors Scale, Perceive Usefulness Factors Scale, Perceive Ease of
Use Factors Scale, and Business Competitiveness was conducted using a series of
questionnaires.

The CEOs of SMEs in Melaka's Melaka Tengah, Alor Gajah, and Jasin districts
made up the sample, which was chosen. Descriptive statistics, linear regression
analysis, Pearson Correlation analysis, and Analysis of Variance were used to code
and analyze the collected data (ANOVA). This study shows that SMEs in Melaka
have a high acceptance rate for CAS. Results from the analysis also demonstrated
the importance of the independent factors and demonstrated how they relate to the
dependent variable, which in turn influences how SMEs in Melaka use CAS. The
results show a negative correlation between CEO innovativeness, perceived
simplicity of use, and business competitiveness with CAS adoption. Only
perceived utility is significantly positively connected with CAS adoption,
according to the findings. Therefore, it can be concluded that the usefulness of
CAS is what drives its acceptance among SMEs in Melaka. The results show that
business location and kind have an impact on CAS adoption. The adopter is
unaffected by size (paid up capital, sales turnover, and personnel count). The
findings also show that CEO knowledge of ICT, accounting, and CAS influenced
the CEO who answered to implement CAS in their company.

P.G. Munasinghe (2017) conducted study on the variables that affect how
computerized accounting systems are used in small and medium-sized businesses.
This study's main focus was on the use of computerized accounting systems
(CASs) and how to determine the variables that affect CAS usage in SMEs.
In the study, 100 SMEs in the North Central Province provided empirical data,
which was then further analyzed using bivariate and factor analysis. In the
literature, the following factors were noted: cost, business size, infrastructure,
government assistance, management support, external environment, and perceived
usability. The study's findings showed that 40% of SMEs used CASs to maintain
accounting records. Only the parameters of business size, business cost, and
external environment have a substantial impact on the use of CASs; demographic
variables do not have a significant impact. Therefore, development organizations
should lower the cost of CAS software development by offering a choice of
solutions to SMEs, and adoption of new technologies might be promoted by
increasing SMEs' understanding of the competitive advantages of CASs.

Do Small and Medium Enterprises Optimally Utilize Computerized Accounting

Systems Internal Controls? was the topic of research by Itang (2020). The goal of
this study was to create a measurement tool that could be used consistently to
evaluate the quality and efficacy of computerized accounting systems (CAS) based
on systems theory, in terms of its structural traits or functional elements. Internal
controls, automated data processing, relational databases, automated reporting, and
augmenting technology components were recognized by the researcher as the five
structural characteristics (components or subsystems) of CAS.

A 25-item index that serves as the assessment tool was created as a result of the
operationalization of these structural properties. To verify content validity, a
review of earlier research was used to create the 25-item index. 384 active
members of the Institute of Chartered Accountants of Nigeria (ICAN) were given
the CAS measurement tool via an online survey, and 234 useful responses were
gathered and evaluated to test the measurement instrument's validity and reliability.
The internal and external reliability of the CAS assessment were evaluated by the
researcher using the Cronbach's alpha test of consistency and test-retest statistics,
respectively. The construct validity of the CAS measurement was evaluated using
the exploratory factor analysis. The study's findings indicate that the proposed
CAS measurement tool has high levels of internal and external reliability, as well
as good content and construct validity. Therefore, it is anticipated that using the
instrument to evaluate computerized accounting systems will produce accurate and
trustworthy results. The study is important because it offers a novel way to
evaluate the quality of accounting information systems by looking at their
structural traits rather than qualitative traits like perceived benefits and system
usability. It is advised to conduct more research to confirm the accuracy and
validity of the CAS measuring tool used in this study.

Nizam et al. (2018) looked into and examined the effect of accounting software on
the success of Malaysian businesses.

The paper analyzes and investigates how employing AIS affects the effectiveness
of the firm. It is anticipated that the findings of this study will assist the firm's
owners and managers in realizing the value of employing Accounting Information
System (AIS) obtained by Accounting Software to accomplish performance. The
adoption of AIS was influenced by a number of criteria, including effectiveness,
dependability, usability, data quality, and accuracy, which had an impact on
company performance. Modern research and the findings of this study demonstrate
that the AIS attributes that accounting information possesses, such as effectiveness,
dependability, usability, data quality, and correctness, have a substantial impact on
the use of AIS and a firm's success. Previous studies have demonstrated how
important it is for businesses to utilize AIS to not only improve the competency
and efficiency of their company operations but also to secure the survival and
sustainability of their operations in an environment where competition is on the
rise. This study is one of the few that can provide insight into how AIS usage
impacts business performance. The authors of this study suggest that AIS usage
dimensions are crucial for enhancing commercial organizations' success.

Computerized vs. Non-computerized Accounting System of Small and Medium

Enterprises in Lipa City, Philippines: A Comparative Analysis was the subject of
research by Alex John in 2015. The goal of the study is to evaluate how well small
and medium-sized enterprises use accounting systems.

This study used a descriptive or survey research design, asking the 128 respondents
to complete an adopted questionnaire. According to the study's findings, the
majority of SME's have been utilizing their accounting system for six to ten years.
Similarly, when using a computerized accounting system, the respondents prefer to
complete their task efficiently while also improving both the quality and quantity
of their labor. While the respondents said they can complete their work accurately
using the manual accounting system, they also indicated that setting up a
computerized accounting system is still more convenient. Users of the manual
accounting method complain most about how time-consuming it is.

2.4 SUMMARY OF RELATED WORK

Simon et al(2020) .'s study looked at how computerized accounting systems

affected the reliability of financial reports in Ghana's banking industry. The study
concentrated on how CAS affected banks' financial reporting.

Researchers Oladipo et al. (2013), Mohd et al. (2019), Itang (2020), and Alex John
(2015) examined how computerized accounting systems were used and adopted in
small and medium-sized businesses. The difficulties SMEs had in adopting
computerized accounting systems were the researchers' main concern.
Baranidharan (2018) conducted research on the computerized accounting
procedures used by Thanjavur's small businesses. The study concentrated on the
accessibility of infrastructures for CAS adoption. Mustapha (2018), P.G.
Munasinghe (2014), and Atakanbi (2017) Both Nizam et al. (2018) and their
research looked at how accounting software affects a company's success. They
focused solely on how accounting software features affected how well the firm
performed in other nations.

The gaps include concentrating on SMEs' adoption of computerized accounting

systems, concentrating on the accessibility of ICT facilities for running CAS,
concentrating only on the effects of accounting software features on the
performance of the company across different nations, and concentrating primarily
on SMEs. The primary objective of this study is to investigate how computerized
accounting impacts SME business process performance in Nigeria.
 CHAPTER THREE

METHODOLOGY

3.1 Research Design

The phrase "research design" refers to the overarching strategy and analytical
approach you have chosen to combine the many study components in a coherent
and logical manner, so ensuring a thorough examination of the research subject. A
survey study design was ultimately decided upon. In order to provide a quantitative
or numerical description of trends, attitudes, or opinions within that population, a
survey research design analyzes a sample of that community.

3.2 Sources of Data

Two different methods of data collecting were employed by the researcher. The
two types of data collection are primary and secondary. The researcher's long-term
data collection efforts in an effort to address a particular problem constitute the
primary data. A questionnaire served as the primary data source for this study's
objectives. A questionnaire is a research tool that consists of a collection of
inquiries intended to gather data from respondents (McLeod, 2018). There are
presented potential questionnaire answers. The respondents must complete the
options of their choosing. There can only be one choice for each response category.

3.3 Population of Research Instrument

A significant group of people or objects that are the focus of a scientific

investigation is known as a research population. The term "population" describes
the complete collection of people who reside in a specific place. The case study of
this analysis is Hardis and Dormedas Limited. Producing and selling cosmetics is
the focus of this modest to medium-sized company. Eighty employees work for the
company in total. The population of the business is made up of every employee.

3.4 Sample Size and Sampling Techniques

A sample is a collection of individuals, things, or things drawn from a larger

population for measurement (Mugo 2021). Since the sample includes both
management employees and members of the account and finance department, the
sample size is 12.

Department Population Percentage

Account and Finance 8 67 %

Management 4 33%

Total 12 100%

3.5 Instrument's Validity

Before making the required adjustments and suggestions that will be put into place
before to data collection, the project supervisor will undertake face and content
validity checks on the questionnaire and ensure that it effectively answers the
study's objectives.
3.6 Instrument Reliability
The questionnaire will be distributed to a chosen sample of individuals in order to
validate the research design and assess the instrument's validity. After that, a
review of the duplicate surveys will be conducted. The objective is to ensure that
the instrument will generate trustworthy data when used for the appropriate study.
Enugu City, the state capital of Enugu, hosted the pilot study.
3.7 Data Analysis Technique
Tables were used to illustrate the data and simple statistical methods were used to
analyze the percentage. The hypotheses formulated were tested using chi-square.
Formula for simple percentage: Observed frequency x 100
Total frequency 1
The Formula for Chi-square is given below:
X2 = Σ (Fo-Fe) 2
Fe
Where: x2 = Chi-square
Fo = observed frequency
Fe = expected data

Decision Rule: Reject null hypothesis when the computed value of Chi-square is
greater than the critical value of Chi-square, otherwise the null hypothesis should
be accepted.