COMPUTERISED ACCOUNTING SYSTEMS ANS AN AID TO EFFICIENT MANAGEMENT OF AN ORGANIZATION

CHAPTER ONE

1.5 INTRODUCTION

Accounting has long been an organizational function especially with the advent of non owner managers who need to update what is happening in the organization. Maintaining, preparation and presentation of accounts is crucial for business success as well as organization for effective decision making whether it is a nonprofit making organization or profit making because they have to report to the stakeholders of the organization through good organizational management. However there was inefficient as an aid for efficient  management of an organization due to loss of records, delay in preparation of records and its associated problems. This study focused on establishing the influence of computerized accounting systems as an aid for efficient management of an organization.

1.6 Background

In Uganda, before the introduction of computerized system of accounting, the manual systems were inaccurate and inconsistent for many organization needs especially reporting of financial information. This is because the system was associated with errors since data was collected, analysed, journalized and a trial balance and balance sheet prepared (Meigs, 1986).

Though most organization have not being doing well in as an aid for efficient management of an organization and accounting records, reports from a comparative survey conducted by Indira (2008) Uganda inclusive indicate that firms have greatly improved on the ways of reporting their financial statements. Computerized accounting system is defined as the application of the computer based software used to input, process, store, and output accounting information. This application is in support of the ever advancing technology that enables firms to use computer programs to perform tasks that were previously done manually.

A computerized accounting system therefore involves the computerization of accounting information systems which is established inorder 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.

However many organizations are not enjoying the benefit of computerization of accounting system as they have continued to be inaccurate due to increased number of interruptions due to system failure or breakdown and untimeliness with its reliability left in question(as per European Union Audit Report by National Audit Organization 6 may 2003)

According to Pandey (1998), Financial reporting to the company’s stakeholders for instance the government, public, donors is a statutory obligation for every organization.

Saleemi (1981) defined as an aid for efficient  management of an organization as the process of supplying financial information which is reliable, accurate and complete to the various stakeholders for making economic decisions. This is always inform of financial statements such as statement of comprehensive income, statement of financial position and cash flow statement and other financial annually reports which provide an overview of the company’s current financial strength.

1.7 Statement of the Problem

According to the Accountant of a, b, c Transports, despite the existence of a well established computerized accounting system instances of delay, inaccurate reporting, misposting and wrong balances have continued to occur. Given that computerized accounting systems are put in place, such instances are not expected to occur and hence the researcher is therefore prompted to carry out an investigation on the effectiveness of the system used by National Water.

1.8 Purpose of the Study

To find out the influences of computerized accounting system as an aid for efficient management of an organization.

1.9 Objectives of the Study

i.                    To establish the accounting systems being used.

ii.                  To establish the benefits of computerized accounting system being used.

iii.                To establish the appropriate strategies for improving computerized accounting system

Research Questions

I.                    What accounting system 1s being used?

II.                 What are the benefits of computerized accounting system being used?

III.               What appropriate strategies can the firm use to improve on timely as an aid for efficient  management of an organization?

1.8 Scope of the Study

1.6.3 Geographical Scope

The research was carried out in a, b, c Transports. This was due to availability and convinces of obtaining data about the topic of the study.

1.6.4 Content /Variable Scope

The research was based on two variables these are computerized accounting systems which comprise of definitions, components of computerized accounting software and benefits and limitation of computerized system as an aid for efficient  management of an organization which also comprises of definitions of good organizational management, benefits and effectiveness of accounting system used at a, b, c Transports.

16.3 Time Scope

The study was based on good organizational management and accounting system for the period covering 2009-2010 due to the limited time required to complete the research.

1.9 Significance of the Study

i.             The study will enable management to understand the significance of preparing quality and reliable good organizational management.

ii.             The study will point out weakness in the accounting system which management needs to address.

1.5

iii.             Other researchers will use the report as literature review in order to improve on their research topic in another period