CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Accounting information system has become an important component of successful business and organizations. Borthick and Clara, (1990) supporting the above, stated that accounting information system is vital to all organizations either profit or non-profit oriented. They further opined that there is need for every organization to maintain accounting information system. In the opinion of Wathana, (2004), accounting information system produces more information to ease operations such as planning and control information and performance evaluation. An understanding of Accounting Information System will therefore foster a better understanding of how businesses and organizations are assisted to operate more efficiently and effectively. Accounting information system has to do with any combination of information technology and peoples’ activities that support accounting operations, management and decision making, though in a narrow sense. In a broader sense however, the term accounting information system is used to refer to the interaction between people, processes, data and technology that are used for accounting duties. It is equally in this wise that O’Brien, (2003) asserted that, the term do not only refer to information and communication technology that an organization uses but also to the way in which people interact with this technology in support of business activities and processes.
Furthermore, accounting information system may be understood from the three words that constitute it (Accounting, Information and System). Wilkinson, (1993) identified three components that relate to accounting as; Information System, Language of Business and Source of Financial Information. Secondly, O’Brien identified information as a valuable data processing that provides a basis for making decisions, taking actions and fulfilling legal obligations. Finally, he stressed that a system is an integrated framework within an entity where the framework is focused on a set objectives. Combining the three, Accounting Information System indicates an integrated framework within an entity (such as business entity) that employs physical resources (material, supplies, personnel, equipment, funds) to transform economic data into financial information for conducting the firms’ operations and activities, and providing information concerning the entity to a variety of interested users (O’Brien, 1993). Thomas and Kleiner, (1995) concluded that the combination or interaction between human, technology and techniques knowledge effectively. This research seeks to conduct an empirical analysis of accounting information system in organizations and examine its values in organizational activities and processes.
Leave a Reply
You must be logged in to post a comment.