AN EVOLUTION OF THE IMPACT OF COMPUTERIZATION ON THE ACCOUNTING SYSTEM OF SMALL SCALE BUSINESS ORGANISATION (A CASE STUDY OF MODEL COMPUTERS COMPANY WARRI DELTA STATE)

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ABSTRACT

The development of accounting systems and the computerization of these systems in a small scale business environment is the main theme of this study. The researcher examined the issues involved by understanding the computerized accounting system of model computers company, Warri.

Based on the analysis of data for this study it was discovered that an effective and efficient operating environment is function of a good accounting system other things being equal. Similarity it was discovered that the introduction of computer and the development of accounting packages have revolutionized the accounting system of small scale business organisation.

Therefore the general conclusion drawn from this study is that a computerize accounting system is a basic paradigm for small scale business organisations.

 

LIST OF FIGURES

Fig. 4 – 1     Mcc organisation chart

Fig 5 – 1      Daceasy system interface

Fig 5 – 2      Customer module

Fig 5 – 3      Uendor module

Fig 5 – 4      Product module

Fig 5 – 5      General ledger module

Fig 5 – 7      Fixed asset module

Fig 5 – 8      Purchase order module

Fig 5 – 9      Invoicing module

Fig 5 – 10    Financial module

Fig 5 – 11    Default layout of accounts

Fig 5 – 12    Chart of account

Fig 5 – 13    Model chart of accounts

Fig 5 – 14    Fixed assets list

Fig 5 – 15    Current trail balance

Fig 5 – 16    Current profit and loss financial report

Fig 5 – 17    Period balance sheet

TABLE OF CONTENT

CHAPTER ONE

General Introduction                                                1

• Background of the study 1
• Statement of the problem 3
• Objectives of the study 4
• Significance of the study 5
• The scope of the study           6
• Research limitations 6
• Definition of terms 7

CHAPTER TWO

Review of related literature                                      10

• Introduction 10
• Accounting information system 13
• Computer technology and accounting 19
• Computer application for small business 27

Note                                                                         31

 

CHAPTER THREE

Research methodology                                            34

• Nature of the study 34
• Sources of data 34
• Method of data presentation 35

CHAPTER FOUR

Model – A company presentation                            37

• Historical background                                          37
• Organizational structures 38
• The accounting system of model computers company 42

CHAPTER FIVE

Dave presentation                                                    44

• Basic issues 44
• Daceasy accounting package 52
• Computerization at MCC 54
• Daceasy and basic accounting operations 54

 

CHAPTER SIX

Findings, summary and conclusion and recommendations

• Findings 96
• Summary and conclusion 102
• Recommendations 103

BIBLIOGRAPHY                                                             108

 

CHAPTER ONE

GENERAL INTRODUCTION

• BACKGROUND OF THE STUDY

An accounting system has been described as an integrated frame work within on entity (such as business firm) that employs physical resource (ie material, supplies, personnel, equipment, funds) to transform economical data into financial information for (a) conducting the firms operation and activities and (b) providing information concerning the entity to a variety of interested users.

An accounting system has all the elements or characteristics of a system such as inputs, processes, outputs, controls and feedback. Davis of al write that “system is the anatomy of accounting.” It domain comprises the entire financial dimensions of business operations, including the flow of financial intelligence throughout the organisation and beyond.

The objective of accounting system is to provide an integrated and accumulated information that should assist management in making decisions for the effective and efficient execution of the goals of the organisation. An accounting system should be able to identify, assemble, classify, record, and report an entity’s transactions and to maintain accountability for the related assets and liabilities. In order to accomplish these objectives, the system should have sufficient and appropriate methods and records.

The advents of this computer and the Manufacting of accounting software have revolutionized accounting operation, Davis et al writs that computer system owe much of their acceptance in business to the increased speed and efficiency that they provide for data processing and reporting. They went further to state that computer systems has increased the accuracy, efficiency and timeless of reporting which can be most helpful in improving the decision making activities of management.

Giving the present trend in technology as it affects accounting operations, it would be important to evaluate the impact of computerization the accounting system of small- scale businesses is critical to the success of the information system Nic sulliuan has called for a proper study and analysis before the adoption of computer technology.

Corroboration the view of Sulliuan, Massey 7 walled a caution signal by calling for the need to weigh the benefits and shortcomings inherent in adopting computer technology in the accounting system of small – scale businesses. Although this revolution in accounting practice represents a significant technological shift, the need for evaluating the relevance of computerization cannot be downplayed.

 

• STATEMENT OF THE PROBLEM

The operation of accounting systems in small-scale business organisations is fraught with numerous control problems and ineffectiveness which have, in most cases, produced dysfunctional effects on business operations. Similarly, the enormities of the operational, countervail an strategic problems of computerization have compounded the problem of faulty accounting system in small scale business organisations.                  

As a result, the researcher shall focus on the following research questions in evaluating the accounting systems of the case study:

How effective and what are the control problems confronting the account