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ACCOUNTING INFORMATION SYSTEM AND MANAGEMENT DECISION
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European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. business decision making is predicated on AIS AIS is a set up or system that is primarily. concerned with financial data gathering from internal and external sources analyzing. processing interpreting and communicating the result information for use within the. organization so that management can make more effective and efficient plan decisions and. control operations, Planning decision making and control operations according to Priyia and Longnathan 2016. are challenges constantly confronted by management in running the affairs of the organization. especially knowing that resources are relatively scarce and limited So the need for good AIS. must be made available for proper and accurate decision making In making a sound decision. the management needs valuable and accurate information from its accountant The accountant. is at the services of the management by providing them with the necessary information they. need for decision making In recent times it was observed that cases of mismanagement fraud. and irregularities prevail in the organization, Green Wood and Hinings 2012 opined that there is evidence that reveal the influence of. accounting information in decision making process It emphasizes the importance of a holistic. context and which led to the integration of other institutional influence and multiple logics. The essence of using AIS is to enable managers make wise decision AIS is also used to setup. system of internal control to increase efficiency and prevent fraud in companies AIS aid in. profit making budgeting and cost control In a company it is the duty of the management. accountant to see that his company keeps good records and prepare proper financial. regulations Management accountants also need to keep up with the latest development in the. use of computers and in computer system design Accountants provide many special reports. for management s decision making This function requires the gathering of both historical and. projected data, Limited numbers of studies avails in international management research have focus on the role. utilization of AIS play in the holistic context of decision making strategies processes and. preferences Based on the above it was necessary to research on the following research. questions how does AIS control fraud and mismanagement How effective is AIS in. management decision making Therefore in order to answer the above questions the study. purposes at examining how effective and efficient management apply AIS in making business. decisions Specifically the research attempt to identify how AIS controls fraud and. mismanagement and determine how effective AIS is to decision making Furthermore the. hypotheses for the study were stated in null form They were. Ho Accounting Information System does not control fraud mismanagement. Ho Accounting Information System does not influence decision making. LITERATE REVIEW, Literature abounds on related topic of interest that is some scholarly works that have been.
done on AIS and organization decision making are review in this section Elvisa and Erkan. 2015 were of the opinion that role of AIS is crucial in managing an organization in order to. implement an effective and efficient internal control system within the organization to achieve. organizational goal It is impetus to quarry the important of AIS on management decision. ISSN 2053 4086 Print ISSN 2053 4094 Online, European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. making concerns the fit of AIS with organizational requirements for information. communication and control According to Wexiodisk 2006 accounting tools are information. provider that guides decision They further said accounting is a measurement and. communication system to provide economic and social information about an identifiable entity. to permit users to make informed judgments and decisions leading to an optimum allocation. of resources and the accomplishment of the organizations objectives Hafij Jamil and syeda. 2014 affirmed that there is a significant relationship between AIS and strategic decision. making Elvisa and Erkan 2015 concluded that AIS system play a very significant role in. the process of decision making especially today when technology is constantly changing. When the information provided by AIS serves widely the requirements of the system users. then AIS system can be said to be effective However the question of its efficiency is a. different topic entirely Effective information system ought to systematically provide. information that has prospective effects on decision making process. Generally speaking accounting information can be classified into two categories namely. Financial accounting,Managerial accounting, Financial accounting Financial accounting include information disseminated to parties that. are not part of the enterprises proper stockholders creditors customers suppliers regulatory. commissioners financial analysts and trade associates although the information is also of. interest to the company s officers and managers Such information relates to the financial. position liquidity that is ability to convert to cash and profitability of an enterprise Rose. Managerial accounting Managerial accounting deals with cost profits volume relationships. efficiency and productivity planning control prize decisions capital budgeting and similar. matters This information is not generally disseminated outside the company Whereas the. general purpose financial statements of financial accounting are assembled to meet basic. information needs of most external users managerial accounting provides a wide variety of. specialized report for division managers department heads project directors section. supervisors and other managers Rose 2004, AIS should include aspects such as flexibility and companies ability to adopt to change The. context of the flexibility does not appear in any of the accounting definition because the. definitions were developed during stable periods The environment has changed and. uncertainty has increased,The Concept of Accounting Information System.
AIS may be defined as financial information regarding the economic activities of an. organization or unit to users Information made up of what is accepted as accounting today. would not have been recognized as such 50 years ago changing social attitudes combined. with development in information technology quantitative methods and behavioral sciences. has radically affected the environment in which accounting operates today Priya and. longnathan 2016 opined that there exists a strong relationship between the use of. organization AIS and managerial efficiency which is as a result of changing in information. technology,ISSN 2053 4086 Print ISSN 2053 4094 Online. European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. AIS are financial position statements and other reports supplied by the accountant of an. organization which shows the true and fair financial position of the economic activities of the. organization AIS includes the balance sheet profit and loss account and cash flow statements. Balance Sheet This is the statement of financial position that lists the accounting period it. provides a measure of the capital invested by the owners in a company or business It is also. made up of four main section fixed asset current asset capital and liability This. classification simplifies financial analysis of business. Trading Profit and Loss Account It shows the profitability of the business it also show the. amount of economic activities that took place during the preceding accounting period and. profit derivable from such economic activities It shows the gross profit as well as the net profit. of the organization within the accounting period, Cash Flow Statement is a statement that shows the cash movement in transaction engaged. in by the firm for a particular period usually one year The cash flow statement was introduced. to replace the fund flow statement in 1998 to make it easier for users of financial statement to. relate cash availability and profit over a given period. The balance sheet profit and loss account and cash flow statement together constitutes the. financial statement of an organization, Emphatically all these information need to be compiled by a system before they are made. available for users consumption The system that made this available is AIS Management. Information System MIS provides information which is needed to manage an organization. efficiently and effectively MIS involves three primary resources people technology and. information system which are distinct from other information system in that they are used to. analyze operational activities in an organization AIS is characterize by relevance. understandability reliability comparability and timeliness of the information provided. Without which the purpose of the system is defeated. METHODOLOGY, The study was carried out in Oyo State Nigeria 56 registered manufacturing industries were.
randomly selected Data were sourced from primary source data collected via questionnaire. and personal interviews were analyzed using simple table with the percentage magnitude or. perception of people who subscribed to a particular opinion The method was adopted due to. its relative simplicity and capacity to accommodate large data Each hypothesis was analyzed. using percentage frequency the chi square X2 statistics. ISSN 2053 4086 Print ISSN 2053 4094 Online, European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. RESULT AND FINDINGS, Table 1 Analysis showing if Accounting Information System controls fraud and. mismanagement Statistics,accav Mm Fp,N Valid 56 56 56. Missing 0 0 0,Mean 1 1964 2 1964 2 3571,Std Deviation 40089 1 06889 1 10254.
Skewness 1 571 981 842,Std Error of Skewness 319 319 319. Source Researcher s field survey 2017, Table 2 Accounting Information System availability and importance. S N QUESTIONS SA A UD D SD TOTAL,1 AIS is available 45 80 4 11 19 6 56 100. 2 Mismanagement control is aided 14 25 28 50 5 8 9 7 12 5 1 1 79 56 100. 3 The prevention of fraud is owed 11 19 6 27 48 2 8 14 3 7 12 5 3 5 4 56 100. largely to AIS availability, Note The figures in bracket indicate the percentage while figures not in bracket indicate. Source Researcher s field survey 2017, Also 80 4 of the respondents strongly agree that AIS is operational in the organization.
19 6 agree to the question This indicates that AIS is operational in the organization Also. 25 00 of the respondents strongly agreed that mismanagement control is aided by AIS. 50 00 agreed 8 9 were undecided 12 50 disagreed and 3 6 strongly disagreed This. indicates that mismanagement control is aided by AIS Also 19 6 of the respondents strongly. agreed that The prevention of fraud is owed largely to AIS availability 48 2 agreed 14 3. were undecided 12 50 disagreed and 5 4 strongly disagreed This indicates that the. prevention of fraud is owed largely to AIS availability. Table 3 Chi Square Tests for Accounting Information System control. mismanagement,Value df Asymp Sig 2 sided,Pearson Chi Square 48 398 a 4 000. Likelihood Ratio 48 756 4 000,Linear by Linear,38 973 1 000. Association,N of Valid Cases 56, a 6 cells 60 0 have expected count less than 5 The minimum expected count is 39. Source Researcher s computation 2017,ISSN 2053 4086 Print ISSN 2053 4094 Online. European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org.
Table 4 Chi Square Tests for Accounting Information System aid fraud prevention. Value Df Asymp Sig 2 sided,Pearson Chi Square 50 457 a 4 000. Likelihood Ratio 49 458 4 000,Linear by Linear,37 493 1 000. Association,N of Valid Cases 56, a 5 cells 50 0 have expected count less than 5 The minimum expected count is 59. Source Researcher s computation 2017, Golden rule The rule state that when the critical p value is higher than the level of significant. accept the null hypothesis and reject the alternate hypothesis Since the critical p value in table. 3 and table 4 is 0 000 which is lower than the level of significant 0 05 then the null hypothesis. which was that AIS controls fraud and mismanagement is rejected while the alternate. hypothesis which was that AIS controls fraud and mismanagement was accepted P 0 000. 0 05 It was inferred that AIS controls fraud and mismanagement in the organization. understudy, Table5 Effect Accounting Information System on decision making in manufacturing.
industries,S N Effects SA A U D SD TOTAL, 1 AIS is effective in decision making in 14 26 5 7 5 56. manufacturing sector organization 25 00 50 00 8 93 12 50 8 93 100. 2 AIS reports relevant financial 20 22 5 7 2 56, information regarding the economic 35 71 39 29 8 93 12 50 3 57 100. activities of an organization or unit, 3 The quality of AIS is relevant to an 31 8 5 11 1 56. organization performance 55 36 14 29 8 93 1 79 10 71 100. 4 The application of decision making on 36 10 6 2 2 56. matters that relate to an organization is 69 64 8 93 10 71 3 57 3 57 100. made easy by its AIS, 5 AIS plays a vital role in manufacturing 19 21 9 3 4 56. industries 33 93 37 50 14 29 5 36 7 14 100, 6 Manufacturing industries find it difficult 14 26 5 7 5 56.
to survive without the use of AIS 25 00 46 43 8 93 12 50 8 93 100. 7 AIS is effective in manufacturing 14 28 5 7 2 56. industry s decision making 25 00 50 00 8 93 12 50 3 57 100. 8 AIS aids adequate allocation of 45 11 56,resources 80 36 19 64 100. Note The figures in bracket indicate the percentage while figures not in bracket indicate. Source Researcher s field survey 2017,ISSN 2053 4086 Print ISSN 2053 4094 Online. European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. The analysis on Table 5 shows 25 00 of the respondents strongly agreed that AIS is effective. in decision making in manufacturing industries 50 00 agreed 8 93 were undecided. 12 50 disagreed and 8 93 strongly disagreed This indicates that AIS is effective in decision. making in manufacturing industries Also 35 71 of the respondents strongly agreed that AIS. reports relevant financial information regarding the economic activities of an organization or. unit 39 29 agreed 8 93 were undecided 12 50 disagreed and 3 57 strongly disagreed. This indicates that AIS reports relevant financial information regarding the economic activities. of an organization or unit Also 55 36 of the respondents strongly agreed that the quality of. AIS is relevant to an organization performance 14 29 agreed 8 93 were undecided 1 79. disagreed and 10 71 strongly disagreed This indicates that the quality of AIS is relevant to. an organization performance This finding collaborate with the work of Clinton Matuszewski. Tidrick 2011, Also 69 64 of the respondents strongly agreed that The application of decision making on. matters that relate to an organization is made easy by its AIS 8 93 agreed 10 71 were. undecided 3 57 disagreed and 3 57 strongly disagreed This indicates that application of. decision making on matters that relate to an organization is made easy by its AIS Also 33 93. of the respondents strongly agreed that AIS plays a vital role in manufacturing industries. 37 50 agreed 14 29 were undecided 5 36 disagreed and 7 14 strongly disagreed This. indicates that AIS plays a vital role in manufacturing industries and this is in line with the. findings of Elvisa and Erkan 2015, Also 25 00 of the respondents strongly agreed that manufacturing industries find it difficult.
to survive without the use of AIS 46 43 agreed 8 93 were undecided 12 50 disagreed. and 8 93 strongly disagreed This indicates that manufacturing industries find it difficult to. survive without the use of AIS Also 25 00 of the respondents strongly agreed that AIS is. effective in manufacturing industries decision making 50 00 agreed 8 93 were undecided. 12 50 disagreed and 3 57 strongly disagreed This indicates that AIS is effective in. manufacturing industries decision making Also 80 36 of the respondents strongly agreed. that AIS aids adequate allocation of resources 19 64 agreed This indicates that AIS aids. adequate allocation of resources, Table 6 Chi Square Tests for Accounting Information System Influence on Management. Decision Making,Value Df Asymp Sig 2 sided,Pearson Chi Square 49 398 9 4 000. Likelihood Ratio 48 756 4 000,Linear by Linear,39 973 1 000. Association,N of Valid Cases 56, a 6 cells 60 0 have expected count less than 5 The minimum expected count is 39. Source Researcher s computation 2017, Since the critical p value in table 6 is 0 000 which is lower than the level of significant 0 05.
then the null hypothesis which was that AIS does not influence management decision making. is rejected while the alternate hypothesis which was that AIS influence management decision. ISSN 2053 4086 Print ISSN 2053 4094 Online, European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. making accepted P 0 000 0 05 It was inferred that AIS is effective in decision making in. manufacturing industries This findings is in line with the work of Melissa Bushman 2007. which opined that organization use both financial and non financial information to aid business. decision making,DISCUSSION, Results of the study revealed that the use of AIS improves decision making in manufacturing. industries which is in line with Wexiodisk 2006 that AIS guides decision making It can then. be conveniently concluded that there exist a strong relationship between the use of. organizations AIS and managerial efficiency which collaborate Longnathan 2016 that there. exist strong relationship between AIS and management decision making There is also a high. level of awareness pertaining to the role of AIS This awareness is not limited to senior and. management staff alone but also cut across intermediate and junior staff whose operations are. also governed by the AIS It is evident that the AIS factor looms large among factors which. contribute to the overall corporate efficiency, From the results of the findings the following emerged AIS could be used to control fraud and. mismanagement without AIS decision made will be of less quality Manufacturing industries. relies heavily on AIS for decision making AIS is effective in decision making in manufacturing. industries this conformed to Elvissa and Erkan 2015 although the study introduced fraud. prevention,CONCLUSION, The study revealed that AIS performs a crucial role on management decisions and organization.
performances which has been shown to be a major force in decision making This is achieved. by implementing the best fundamental concept of accounting suitable for each company The. selected industries used as case study made the researcher to understand that for any company. to be successful it should endeavor to make use of AIS because accounting itself is a language. of business and before venturing into any business one must understand the language of such. business so as to know the right method to achieve the stated goals and objectives. Studies have shown that successful utilization of AIS requires a fit between three factors First. a fit must be achieved with dominant view in the origination or perception of the situation. Second the accounting system must fit when problems are normally solved i e the technology. of the organization Finally the AIS must fit with the culture i e the norms and value system. that characterizes the organization,RECOMMENDATIONS. Efforts should be made to measure the effects of currently employed accounting concept on. management decision making Apart from employing qualified accountants to handle the. processing of management accounting information management should from time to time. conduct an in service training for accountants to enhance their activities that is supplying. accurate information for management use Managers should have elementary knowledge of. ISSN 2053 4086 Print ISSN 2053 4094 Online, European Journal of Accounting Auditing and Finance Research. Vol 5 No 11 pp 66 74 December 2017, Published by European Centre for Research Training and Development UK www eajournals org. accounting generally to enable them understand the information for quick use They should be. trained from time to time on how to apply AIS to decision making. REFERENCES, Clinton B D Matuszewski L Tidrick D 2011 Escaping Professional Dominance. Elvisa and Erkan 2015 impact of accounting information system on decision making. European researcher 2015 volume 96 Is 7 page 460 469. Green Wood and Hinnings 2012 Role of enterprise system in radical organisational change. Hafij Jamil and syeda 2014 Role of accounting information in strategic decision making in. manufacturing industries Global journal of management and business research online. ISSN 2249 4588,Melissa B 2007 Overview of Management Accounting.
New York NY Thomas Reuters RIA Group,online article. Priya and Longnathan 2016 Impact of accounting information for management dsecision. making internationaljurnal of applied research 2 5 page 171 174. Rosie 2004 Management accounting V Grunner and Jahr printing and publishing. Wexiodisk 2006 The Impact of Accounting Information on Management sdecision Making. Process Vaxjo,ISSN 2053 4086 Print ISSN 2053 4094 Online.


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