THE IMPACT OF ACCOUNTING INFORMATION SYSTEM ON MANUFACTURING COMPANY (A CASE STUDY OF INNOSON NIGERIA PLC, ENUGU - Project Topics & Materials - Gross Archive
THE IMPACT OF ACCOUNTING INFORMATION SYSTEM ON MANUFACTURING COMPANY
(A CASE STUDY OF INNOSON NIGERIA PLC, ENUGU)
1.1 Background of the Study
Innonson Nigeria Limited is an indigenous blue chip company engaged extensively. In the importation, assembly and marketing of automotive components accessories and motorcycles, incorporated in July 1987 the company has grown to become one of the major importers, suppliers and assemblers of motorcycle spare parts to outermost part of West African sub-region and beyond.
Innonson Nigeria Limited started in 1986 as a treating outfit by buying Honda Motorcycle parts and over a period of time was recognized as the major dealer of Honda motorcycle parts of the time. As time progressed, Innonson started importing the motorcycle parts and accessories into the country and having had the vast knowledge and experience. In the motorcycle business sometime in 1994, they entered into joint venture of assembling motorcycle in Nigeria with a Chinese motorcycle manufacture. The assembled motorcycle has manual form and this usually forced the price of assembled motorcycle up and at the end was making little or no profit.
After working extremely hinder to ensure that here factory in Emene Enugu State produce most of there component used in the assemblage of motorcycles, mean while, here are a list of the manufactured by them. Head lamp case, rear fender, gfront Emblem, sde Cover and helmets etc
Accounting according to Dupree and Marder (2010) is the act of collecting, processing, reporting, analyzing, interpreting and projecting financial information. He also defined accounting as a process of identifying measuring and communicating economic information to permit informed judgments and decision by users of the information.
Accounting according to Nwoha (2009), the objective of accounting is to provide information regarding a firm’s transaction and resources, which should be relevant for making economic decision by persons or organization outside the entity. Whether you are paying your phone bills, balancing check books, preparing your income tax return on managing an international corporation, you are working with accounting concepts and Accounting Information system .
Accounting information system is a combination of people, equipment, policies, and procedures that work together to collect data and transform it into useful information. It is a formal mechanism for gathering, organizing and communicating accounting information about an organization’s activities. It is a system that provides people with either data or information relating to an organization's operation to support the activities of employees, owners, customers, and other key people in the organization's environment by effectively supplying information to authorized people in a timely manner. It is a system, an assemblage of various facilities and personnel, providing information to support managerial decision-making process (Khan, 2017). Its main function is to acquire, process, and communicate data that is essential to the operation of the organization. Nevertheless, it is an entity, composed of various inter dependent subsystems, working together to provide timely, reliable, and accurate information for decision making. It is a network established in an organization to provide managers with information that will assist them in decision making. It is a routine and an automatic system used for gathering and communicating data for the ends of assisting and coordinating collective decision in view of the overall objectives of a firm. The successful accounting information system would lead to the success of the organization in achieving its objectives but the unsuccessful information system could lead to the failure of the organization in achieving its goals meaning thereby an inability to grow and survive.
According to Ubesie (2011), Accounting Information system is the data that is organized or prepared for the purpose of manufacturing company . Information means facts or data that have an amazing effect on the receivers and this has a value greater than its cost and potentially evoke response in the manufacturing company . The response could be positive or negative, depending on the effect such data or fact have on the receiver of the information. Organizations are involved in numerous activities in order to achieve certain goals. Therefore, organizations are expected to provide information regarding their activities by way of publishing their financial statement. Therefore, there is every need for accounts concerned to prepare the Accounting Information system for management at periodic intervals. The aim of this is to assist the management in the formulation of major plan and policies of the business. The external information on the other hand comprises of periodic or annual financial statements which are the product of the financial accounting system. The information is meant for the benefit of share holders, potential investors financial analysis, professional consultants, government and the general public. The information is usually contained in the profit and loss account, balance sheet, statement of cash flow, value added statement, annual audit report, etc.
Financial accounting as a system of information has an effect on the management of the business and the effect is, do all businessmen know this? This is the question a researcher would seek to answer. The impact and importance of Accounting Information system on the management of any business cannot be ignored or over looked. Though, the extent of such impact may not be the same for everyday business. Numerous School of Thought believes that no business escape such impact. This study which focus on the impact of Accounting Information system in a manufacturing company.
1.2 Statement of the Problem
Capital expenditure (CAPEX) on information systems (IS) has been on the rise recently in many organizations locally and globally. Operations within different departments in a firm have seen a change from being manual and shifted to being automated with the utilization of computer software. Competition and external conditions have increased the importance of real time information gathering, processing, utilization and storage. Cost reduction can only be a reality when proper analysis is carried out for decision making. Accounting Information system systems is core to the achievement of firms' goals; this means that an organization is as good as its enterprise resource planning (ERP).
Also, Due to financial constraints or lack of effective planning or ignorance, some organizations may not employ the experts needed and this could cause the effect and importance of the Accounting Information system on decision taken not be observed by the organization.
Managers of certain businesses, especially small scale types are devoid of accounting system, which would enable them monitor effectively and efficiently operating expenses and possible revenues. They do not heed to useful hint, communicated by Accounting Information system or lack of it may lead to the non-effective and efficient accomplishment of the firm’s objectives.
Accounting Information system generally constitutes the sole system through which both managers and external users get a clear picture of the organization as a total entity. Some managers fail to appreciate the accountant analysis in respect of financial accounting
1.3 Objective of the Study
The major objective of this work is to examine the impact of Accounting Information system in a manufacturing company. Further the work will help us.
1. To examine how organizational performance relates to efficient and effective use of the Accounting Information system in manufacturing company .
2. To determine the factors that may constrain or promote the effective use of Accounting Information system in manufacturing company .
3. To determine how Accounting Information system aid management in manufacturing company .
1.4 Research Questions
The following research question were drafted from the objective above:
1. Does organizational performance relate to efficient and effective use of the Accounting Information system ?
2. Does the factor promote the effective use of Accounting Information system ?
3. Does Accounting Information system and management in manufacturing company?
1.5 Research Hypotheses
The following hypothesis will guard the work;
H0: Organizational performance does not relate to efficient and effective use of Accounting Information system .
H1: Organizational performance relate to efficient and effective use of Accounting Information system .
H0: Accounting Information system has no factors that promote its effective use in manufacturing company.
H2: Accounting Information system has factors that promote its effective and efficient use in manufacturing company.
H0: Accounting Information system does not aid management in manufacturing company.
H3: Accounting Information system aid management in manufacturing company.
1.6 Significance of the Study
This is also known as importance of the study, this study lies on the relevance to the following target groups.
The study will highly important to the accounting manager, as it aid management of organizations in evaluating their performance and as an assessment mechanism with respect to determine whether they actually take not of Accounting Information system in their accounting preparations; help the management of the organization under study in setting standard for internal evaluation and control of actual performance.
Provision of basics to other researchers: to provide basis for other researchers or research scholars who may wish to carry out further research on the subject matter or other related topics.
Provision of insight: to provide an insight on how business organizations can rely on Accounting Information system for manufacturing company.
1.7 Scope of the Study
The extent of coverage of this research was limited the impact of Accounting Information system in a manufacturing company. As it focused on the Innoson manufacturing company, Enugu
1.8 Limitations of the Study
The main limitation of this work is the time frame and other limitations are stated below:
• Time Constraint: it should be noted the period given is not adequate for a study of this magnitude and also a high demand nature of other academic engagements would affect the quality of this research. For this reason the study has to be limited to some specific areas.
• Availability of Relevant Materials: the problem of getting the relevant textbooks, journals and other materials might pose as a threat to the quality of this research.
• Finance: the non-availability of finance for countless trips to collect data and meet certain obligation as at when due may contribute to the quality of this research work.
• The Problem of Collecting Information: organizations and individuals usually characterized by the fear of diverging sensitive information to outsiders. Hence, the quality of the project may be affected by unavailability of some vital data from the respondents to some extent but total co-operation is being anticipated from our respondents.
1.8 Definition of Terms
• Accounting: According to Oxford Advanced Learner’s Dictionary, the process or work of keeping financial accounts. Accounting is the process of recording, classifying, selection, measuring, interpreting and communicating financial data of an organization to enable users to make assessment and decisions.
• Accountant: An accountant is someone who has prerequisite knowledge of how to keep the records of a company.
• Financial statement: this is also known as financial report. It’s a formal record of the financial activities of a business, person or other entity.
• Statement of cash flows: it is the report on a company’s cash flow activities, particularly its operating, investing and financing activities.
• Value Added Statement: This is a statement showing the net added value of a business firm during a certain period on its total transaction.
• Balance Sheet: This is a statement that shows the financial position of the business at a particular period in a year.
• Accounting Information system : these are the data that are found in the financial statement of an organization.
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