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THE IMPACT OF COMPUTERIZATION OF ACCOUNTING FUNCTIONS ON ORGANIZATION PRODUCTIVITY Case Study of Beta Glass Plc
This project is focused on the impact of computerization of accounting function as related to organisational productivity using Beta Glass Plc – A manufacturing company - as a case study.
Essentially, the study aim is to provide a simplified, but thorough approach to understanding of computer utilization as a tool for enhancing effectiveness and efficiency in accounting functions and improvement in the overall organisational productivity.
It acknowledges the fact that we are in computer age, and for the fact that volume of activities in our various organisation has being on increase which manual data processing operation cannot cope with.
Hence, the need for more efficient and effective means of data processing is required, which the advent of computer squarely fit in to address.
TABLE OF CONTENTS
Table of Contents v
1.0 Introduction 1
1.1 Problem Statement 2
1.2 Objective of the Study 3
1.3 Relevance of the Study 4
1.4 Research Hypothesis 6
1.5 Scope and Limitation 7
1.6 Definition of Terms 8
2.0 Introduction 11
2.1 The Company Beta Glass Plc 11
2.2 Conceptual Framework 11
2.3 Computer and the Documents 31
2.4 The manual Book-keeping Compared with EDP System 38
2.5 Internal Control Computerization 41
2.6 Effect of Computerization of Accounting Function
on Beta Glass Plc, Productivity 45
3.0 Introduction 48
3.1 Nature and Sources of Data 48
3.2 Research Population/Sampling Plan 49
3.3 Sampling Procedure and Administration of Data Collection 50
3.4 Data Collection Instruments 51
3.5 Choice of Data Analysis 53
3.6 Constraints in Data Collection. 54
Analysis of Data and Interpretation
4.0 Introduction 56
4.1 Content of the Questionnaire 56
4.2 Simple Parentage data Analysis Techniques 56
5.0 Summary, Conclusion and Recommendation 74
5.1 Summary 75
5.2 Conclusion 75
5.3 Recommendation 77
Technology development in many countries is evolving, different scientific ideas, one of which is the invention and use of computer for information processing system in both private and public organisational environments including governmental establishments.
The recent increase in demand and usage of computer testifies that we are in computer age. The modern day business atmosphere requires any organization intending to compete effectively and efficiently to optimize its objective, to have its system vis-à-vis its integral components computerized. Hence, the need for computerizing the accounting system which form a part of these components with the functions of recording, classifying, summarizing financial transactions and interpreting the result thereof to various users, as well as establishing internal control system to safeguard and protect the assets of the business is quiet obvious.
The ability of computer is to receive input (raw data) process and transform it to useful and desirable output (information) has gained credibility in various aspect or human endeavour. Therefore, computerization of accounting function has post as an
indispensable tool by which organizational productivity could be enhanced. This is achieved by eliminating the cumbersome manual processing and time wastage associated with manual method of accounting process.
The computer is of great benefit to everyone. They save time and drudgery. They enlighten and educate. The list of uses and advantages of computer seem endless, yet they are not devoid of some shortcoming ranging from health and environment problem as a result of toxic dumps emanating from their production to retardation effect on human thinking faculty, making many genius dummy.
In all, when the advantages and disadvantages are compared one could conclude that, the use of computer is justify.
1.1 PROBLEM STATEMENT
It is generally agreed that output is a, function of input, The efficiency of any system depends largely on the method of operation and approach adopted. So considering the potential benefits of computerization and its expanded advantages over manual operation, one can raise a question if computerization or operation has impact on the efficiency which task are carried out. That is, does computerization has impact on the organizational functions, precisely accounting function?
In addition to the above stated points, development wireless communication software so that mobile computer can transform itself to have computer or office computer. There is commercial software available which will transform a home computer into an office computer or vice-versa.
A familiar but unemphasized fact is that strong manipulation of the four Maxwell’s equation is what allowed to predict electromagnetic waves. From this we can summaries that proper use of language can be a powerful tool to gain information and knowledge about nature.
1.2 OBJECTIVE OF THE STUDY
The objective of this study can conveniently be classified into two, primarily to fulfil the requirement of the award of Higher National Diploma (HND) Certificate in Yaba College of Technology while its secondary objective is to contribute to scientific knowledge. The project will be much informate as to understanding of computer utilization as a tool in enhancing efficiency and effective practice of accounting functions to improve organizational productivity.
Maintain reliable, up to date technology infrastructure and position support organisations to meet changing service demands. Function as a strategic arm of technology to support strategic goal an business plans.
1.3 RELEVANCE OF THE STUDY
The main significance of the study is to enlighten the companies on benefits associated with proper computerization of their accounting system. Also, assist those companies that have already computerized their system in order to improve their efficiency in the accounting system of such organization. The importance of having the accounting activities of an organization computerized are numerous and for the limit of this study could be briefly discuss as follows:
1.3.1 Cost Benefit
The objective of any business organization is to maximize profit, which could be easily done through cost minimization. The use of computer has helped a lot in minimizing and/or eliminate completely some cost which are peculiar to manual process of accounting. Such cost as labour cost which are reduced drastically as many personnel are not required when computer operations are adopted. The cost associated with use of ledger as a means of entries and recording transactions may also be eliminated and so on. Thus, the aggregate of these reductions in cost boost the profitability and increases shareholder fund.
1.3.2 Social Inspiration of Employee
Computer usage is the order of the day. Everybody is yearning to be computer literate. Having’ the employees trained and allowed to use computer gives them a sense of belonging, and they find themselves fit into the social norm. This will go an extra mile in motivating them and perform their normal duty effectively and in efficient manner. In addition, computer eliminates fatigue, save time and drudgery and make user learn more about their job requirement as information are easily derivable.
1.3.3 Information Processing
Information processing is common to both manual and computer base system of accounting, but when the process of these two methods are compared, obviously the computer‑base system enhance quick and. easier information processing system. In addition, it eliminates errors associated with manual processing due to human defect.
1.3.4 System Control
Computerization of accounting activities give room, for establishing difference type of control on the accounting entries and principle such control are the application or procedural control and the system control. The former is developed to ensure completeness, accuracy correctness and validity of input, while the latter ensure that the activities on the system development are authorized, approved and amended if necessary.
1.3.5 Centralization of Activities
Computerization also brings about integration of the operations and accounting system so as to achieve better cohesion in registration of data and in reporting.
1.3.6 Flow of Information
Information is easily disseminated in computer base system and delay in flow of information is highly avoided. Therefore promoting prompt and easy exchange of information within the accounting department as well as to and from connected department.
1.3.7 Utilization or Capacity
Optimal utilization of available capacity is achievable through the application of distributed data processing technique, hence ensuring efficient use of facilities.
1.4 RESEARCH QUESTION AND HYPOTHESIS
For the purpose of this research, the following hypothesis will be tested.
H0: Computerization of accounting function improves organisations productivity.
HA: Computerization of accounting function does not improve organisations productivity.
H0: Introduction of computer increased efficiency in the accounting activities of an organisation.
HA: Introduction of computer does not increase efficiency in the accounting activities of an organisation.
1.5 SCOPE AND LIMITATION
This study is intended to know the impact of computerization of accounting functions on organisational productivity. The study covers procedure taking in developing a system, the control and precautions to the system, the various methods to be adopted and how best to handle computer to ensure efficiency and effective achievement of organizational goal.
The major constraints of this project work are none availability of sufficient time and material resources required for a more in‑dept research. However, inspite of all these constraints, an attempt has been, made to maximize the available resources to come out with tangible findings and befitting recommendation.
1.6 DEFINITION OF TERMS
The need of this section of the project is to enable the users of the work to understand certain technical terms which need to be defined and thereby appreciating the value of the whole exercise. The terms associated with this work are numerous hence effort was made to define some technical ones here and those not defined were being defined as the course arises:
i. Computer: This is an electronics device, which on receipt of input is capable of processing it (input) according to a preset instructions and making the result (output) available when required.
ii. Instruction: An instruction is a statement, which defines a basic operation to be performed, identifies the address of the data to be processed, the location of the data affected by the operation and the input or output device to be used.
iii. Computer Program: It is a sequence of simple instructions or statements into which a given problem is reduced and that which is in a form the computer can understand i.e. in programming language.
iv. Computer Operator: This is a person who is responsible for both loading and unloading the input and output devices and for monitoring the computer during operation.
v. Programmer: This is a person responsible in writing those set of institutions of which computer acts to perform or solve a problem.
vi. Data: These are raw facts about the organisation or individuals that can be processed to obtain useful information.
vii. Information: Refers to processed data useful for making organisational decisions
viii. Mini‑Computer: This is medium in size and memory. It hold considerable amount of data which are less than that of mainframe and supports more than one terminal between 20‑35 terminals within a large extent on a normal environment.
ix. Micro Computer: These are personal computer (PC) which are usually single user system. They are suitable for small organization and individual profession. They are portable and handy to operate anywhere.
x. Mainframe: They are physically large system with corresponding large memory capacity. They usually have a wide variety of attachable peripheral (i.e. input/output devices). Mainframe computer may be constructed as a single integral devices or a group of machine, remotely connected but functioning as a set
xi. Hardware: This refers to the physical units ‘or machines, which make, up computer configuration namely, The Central Processing Unit (CPU) and the Peripheral Units or Electrical Gargets.
xii. Software: This refers to the programs, which are processed by the hardware,
xiii. On-Line: This is a situation whereby input/output devices are connected directly to the computer memory under the control of the Central Processing Unit (CPU) bringing about a direct communication between the computer and its various users.
xiv. Off-Line: This is n situation where input/Output devices are not directly connected to the computer memory. The communication under this model is usually indirect.