SOLUSI UNIVERSITY
FACTORS THAT ARE AFFECTING THE ACCEPTANCE OF ACCOUNTING NFORMATION SYTEMS IN SMALL TO MEDIUM ENTERPRISES (SME). A CASE OF GOKWE CENTER CENTRAL BUSINESS DISTRICT.
A RESEARCH PROPOSAL PRESENTED IN PARTIAL FULFILMENT OF THE
REQUIREMENT FOR THE DEGREE IN ACCOUNTING(BBA)
BY
RUSERE TARIRO M
MAY 2018
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background of the study …………………………………………………………………………………………………..
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Statement of the Problem………………………………………………………………………………………………………
Research Questions……………………………………………………………………………………………………………………
Purpose of the study…………………………………………………………………………………………………………………
Significance of the study……………………………………………………………………………………………………………
Hypothesis of the study……………………………………………………………………………………………………………
Conceptual Framework…………………………………………………………………………………………………………..
Limitation of the Study …………………………………………………………………………………………………………..
Delimitation of the study……………………………………………………………………………………………………….
Definations of terms……………………………………………………………………………………………………………..
Abbreviations……………………………………………………………………………………………………………………….
Organization of the study………………………………………………………………………………………………………..
CHAPTER TWO: LITERATURE REVIEW CHAPTER 1
INTRODUCTION
Background of the Study
AISs is defined as a computer-based system that processes financial information and supports decision tasks in the context of coordination and control of organizational activities (Nicolaou,2000).
In this new era of technological advancement, the role of accounting information systems (AISs) such as Sage, Tally, Pastel, SAP, Smart stream, Great planes have a high importance in managing an organisation and implementing internal control systems. AISs allows a company to manage its business with potential benefits of improved process flow, reduced inventories, better data analysis, better customer service, and improved profit margins (Fan and Fang, 2006). Considering the benefits mentioned above, it is easy to see why AISs are accepted to be one of the most significant developments in the world and also the most accepted standard business software.
However despite all the benefits associated with the use of AIS, SMEs in Zimbabwe are still disinclined to adopt this technology. Micro, Small and Medium enterprises are defined as entities that employ up to 75 people subject to both maximum total annual turnover and maximum gross value of assets excluding immovable property (Small Enterprise Development Corporation Act Chapter 24:12).
Information technology that a few years ago was within reach of only large companies can now be employed by SMEs, thereby increasing their competitive advantage (Malone, 2001 and Porter ,2003). Competitive advantage is gained through efficient processing of customer orders thereby improving customer satisfaction. More so AISs provide an opportunity for business to improve their efficiency and effectiveness in decision making thereby allowing firms to gain competitive advantage.
Furthermore AISs, cover the fullest range of organisational activities and processes and are adopted with the aim of achieving substantial cost savings as well as improved access to tried and tested solutions as they also provide an opportunity to update procedures and align them with perceived examples of “best practice” (Pollock and Cornford, 2004). In that regard AISs encompasses a set of business applications used to carry out common business functions such as accounting, human resources management, stock management. The fundamental nature of a comprehensive AIS is to computerise business processes and most importantly, to produce real-time data (Nah et al., 2001; Themistocleous et al., 2001).
Beke J, (2010) suggested that there is an improvement in accounting quality and decision making associated with using AISs. Quality decisions occur since AISs ensures easy access to information records that are properly kept.. Beke (2010) further argued that AISs tended to have standardized forms of data analysis as provided by the information system which is in support of Pollock and Cornford, (2004) who argued that AISs also provide an opportunity to update procedures and align them with perceived examples of best practice.
Although usual information systems offer managers services in transaction processing, reporting and provide information for decision-making purposes, these functions appear insufficient in the new business environment where automation, effectiveness and efficiency in operations, coupled with real-time data are considered important factors for business success (Al-Mashari, 2001; Themistocleous et al., 2001). Accounting Information systems are capable of producing real-time information for management to respond to, thus improving control and strategic decision-making (Spathis and Constantinides, 2003). Real time information is necessitated by the fact that AISs provide fairly easy access to all the data as and when it is needed as the data will be stored in a single computer data base, where the user just searches for the required information. In support of this Booth et al., (2000) said that AISs have proved to be quite effective in transaction processing but less effective in reporting and decision support. In contrast, the soundness of a decision is enhanced by well documented valid information that is obtained from AISs and thus this coupled with the expertise of an individual will guarantee sound decisions.
In support of Booth et al (2000), Granlund and Malmi (2002) further argued that a common organisation-wide information structure and integrated information system could produce significant benefits for global organisations. It has been found that AISs provide general benefits in terms of increased transaction processing efficiency, more accessible information of a higher quality and greater support for adhoc reporting. Evidence from a survey on companies who have adopted AISs and their impact on management accounting practice confirms a number of such benefits (Spathis and Constantinides, 2002). The most highly-rated perceived benefits involve increased flexibility in information generation, improved quality of reports, increased integration of accounts applications and improved decisions based on timely and reliable accounting information. More specifically, AISs are expected to: reduce costs by improving efficiency through computerisation; and enhance decision-making by providing accurate and updated organisation-wide information; both of which should then lead to improved company performance (Poston and Grabski, 2001).
Instrumentation
For the purpose of this study the researcher made use of questionnaires and personal interviews as they were used by Buonanno et al (2005), in their study „Factors affecting ERP system adoption: A comparative analysis between SMEs and large companies. The questionare was designed to collect information from the AICs users fro small to medium entersprises. The instrument was created by the researcher and its questions were derived from the conceptual framework.
Statement of the Problem
The development of SMEs has never gained so much attention in Zimbabwe before. Presently, the challenges and difficulties of adopting information technology become the bottleneck of the development of SMEs in Zimbabwe (SMEs Development Policy 2002). This is due to the fact that most AISs available on the market are beyond the reach of many SMEs in Zimbabwe, due to resource scarcity caused by lack of financial assistance. Wang (2004) further asserts that many SMEs either do not have sufficient resources or are not willing to commit a huge fraction of their resources due to the long implementation times and high fees associated with AISs More so, lack of organisational preparation of SMEs, caused by the low extent of formalization of people?s roles and responsibilities that is expressed by with their continuous re-shuffle and consequently it becomes difficult to adopt AISs ( Motwani et al., 2002) . Also most AISs vendors provide complex information systems that are beyond the needs of SMEs coupled with the limited expertise in information technology and the opportunity to adopt a processoriented view of the business tends to influence, AISs adoption by SMEs (Levy and Powell, 2000).
Research Questions
To what extent do managerial awareness affect the acceptance Accounting Information Systems in SMEs ?
Does firm’s size affect the acceptance of Accounting Information Systems in SMEs
Does firm’s performance affect the acceptance of Accounting Information Systems in SMEs
Is cost of implementing Accounting Information Systems affect the its acceptance in SMEs
Do AIS coordination affect its acceptance in SMEs
To what extent do AIS effectiveness affect its acceptance in SMEs
Hypothesis
Ho cost do not affect the acceptance of AIS in SMEs
H
Purpose of the Study
The purpose of the study is to determine the factors that affect the acceptance of AIS by SMEs in Gokwe Center. The factors include cost of implementation, AIS effectiveness, firm’s size, firm’s performance, managerial awareness and AIs coordination.
Significance of the study
Conceptual Framework
FACTORS
Implementing cost
Managerial Awareness
Firm’s performance
Firm’s Size
AIS coordination
AIS effectiveness
Assumptions
