ABSTRACT

The recent advancement in information technology has led to the introduction of smaller, faster, easy to use and less expensive computers thereby making it easier for banks and micro finance institutions to computerize their accounting systems. Most MFI, ADVANS CAMEROUN in particular have 100% computerized accounting systems but some still find it difficult to track down errors and fraud. This could be due to the fact that the accountant or those in charge of the computerized accounting system are not computer literates and so face difficulties in using it. The main objective of this study was to assess the effects of computerized accounting systems on the quality performance of financial reporting in the case of ADVANS CAMEROUN UNION.

The researcher adopted quantitative research design with a population of 32 staffs of ADVANS CAMEROUN Ltd . and a sample size of 20 staffs. Primary data was used and the data collection methods were questionnaires (which included closed ended questionnaires). The data was analyzed using statistical package for social sciences (SPSS), descriptive and inferential statistics. A Pearson correlation test and standard multiple regression was employed to verify the hypotheses of the study.

Finding revealed that the independent variables (Information Technology, Accounting software, System security) have greatly contributed to the variation in quality performance of financial reporting. It can be concluded that computerized accounting systems has a significant effects on the quality performance of financial reporting in the case of ADVANS CAMEROUN. Based on the findings, it is recommended that Advans Cameroun Bafoussam Prentemps should make sure their staff especially those operating the computerized accounting systems have Information Technological skills and in case they lack these skills, workshops should be organized in order to train these staff.

Key words; Computerized Accounting Systems, Quality performance of Financial Reports, Information Technology, Accounting Software and System Security.

CHAPTER ONE INTRODUCTION

During the primitive age, record and notes were stored or kept by human beings in their memory and some were marked on trees or on the ground. As time went on, man developed from this primitive era to a more complex economy where there was a need for systematic record keeping and storage and this led to the manual accounting systems. With this system, important records were kept manually for future use but, it was tedious. Today’s modern technology has brought into use computers, this technology is the application of science to gathering, recording, processing and communicating of business information by means of electronic media. At a more technological era, more work was done in the accounting system and thus there was a great need for accuracy, efficiency and better storage facilities which the manual system could not offer and this led to the introduction of electronic mechanical machines into the accounting system. A systematic technological advancement, however, gradually gave birth to what is known today as computers. The historical development of computer started with Hollerith punched card of 1880, Goerge Alken calculator and Charles Babbage’ creation of the difference engine

A computer is a programmable electronic device designed to accept data, perform prescribed mathematical and logical operations at high speed, and display the results of these operations. The computer can also be defined as a tool or device which is able to accept facts (data) and figure in a prescribed form, apply prescribed processes to data and supply result of the processes in a specified format as a meaningful information Mainframes, desktop and laptop computers, tablets, and smartphones are some of the different types of computers.

By Hartzell (2006). A computer is an electronic device capable of accepting data as input, applying prescribed processes on such data and giving out an output which is called information. Hartzell (2006), defines a computer as an electronic machine for processing information automatically.

Tanembaum (2010) sees computer as a machine that can solve problems for people by carrying out instructions given to it. This advancement in information technology has eventually led to the introduction of computerized accounting in the displacement of the manual accounting system in corporate reporting to help produce relevant and accurate representation of financial reports used by the management and external users for decision-making (Greuning, 2006). Computerized accounting has become a common practice in many firms and financial institutions although some still prefer to use the manual accounting system.

Computerized accounting system as defined by Muinde (2013), as the application of a computer- based software which serves as a tool for inputting, processing, storing and transforming data in management information. Manual accounting system on the other hand is a system in which the accountant or the bookkeeper is required to post business transactions from the books of prime entry to the general ledger and worksheet by hand.

Accountability according to the business dictionary is the obligation of an individual or organization to account for its activities, accept responsibility for them and to disclose the results in a transparent manner. Kogan (1986), refers to accountability as a condition under which an agent renders account to another (the principal) so that judgement may be made about the adequacy of performance. The Accounting Department is an essential part of every business, be it large or small, profit making or non-profit making organizations. Accounting is a system in organizations wherein, the accountant observes, analyses, records, files and synthesizes in order to inform. The primary objective of the accounting department in every organization is to process the financial information of the organization and prepare financial statements at the end of the accounting period.

The American Accounting Association defines accounting as the process of identifying, measuring and communicating economic information to permit informed judgement and decision by users of the information. Accounting is also the establishment, maintenance, collection and analysis of financial position of an organization and any changes that have occurred or may occur overtime.

According to Pandey (1998), financial report to the company’s stakeholders for instance the government, public donors are a statutory obligation for every organization. Financial reporting therefore involves the disclosure of financial results and related information to management and external stakeholders (such as investors, customers, debt providers, government and non- government agencies) about how a company is performing over a specific period of time.

As time passes, the world is improving at every point so do technologies and accounting systems. So, Moviric (2010), contented that the utilization of computerized accounting offers assistance to limit human errors, loss of monetary exchange in computers and so, it is the safest rather than keeping financial activity manually.

In Africa, the effects of computerized accounting systems have been felt in many ways such as the easy accessibility to information which has led to an improvement in financial reporting. For instance, in Tanzania (a country in East Africa), Computerized Accounting System (CAS) was initially introduced at the Tanzania Public sector in 1992 where by the government assessed several computerized aspects of professional deals on financial management function which assisted them to move from manual accounting system toward the automated, (Anaeli, 2017). Before computerized accounting system was introduced in Tanzania, all accounting processes were performed manually. Tanzania has been updating their CAS over the years and this system has been improving financial efficiencies both in the public and private sectors. Also, in Uganda, a country located in South East Africa, computers are rapidly changing the nature of work of most accountants and auditors as they used special software packages to summarize transactions in standard format. These accounting packages greatly reduce the amount of tedious manual work associated with data management. Banking industry in Uganda has continued to witness tremendous changes linked with the developments in computerization over the years.

In Cameroon, MFI Micro Finance Institution and banks have highly welcomed the coming of computerized accounting in most sectors of their activities such as recording of daily transactions, customer’s savings, preparation and presentation of their year-end financial reports. As a result, financial information is prepared on time and free from errors thereby enabling the management to present good and reliable decisions. However, some small enterprises have not been able to meet up to the standard of employing these new systems due to their small nature. So, financial transactions in these small enterprises are still recorded manually. The researcher therefore focuses on finding out the effects of computerized account on the quality performance of financial reporting in Advans Cameroun (ADVANS CAMEROUN)

1.1  Statement of the Problem

Prior to the introduction of computerized accounting system, manual accounting was the popular method of accounting where the business had to hire a private or public accountant who would manually record transactions books and ledgers and then prepare financial statement on paper. This brought about many problems as accounting practices were time consuming, boring, had no backup records in case of loss and human error. With the awareness of information technology, manual accounting is gradually becoming outdated. ADVANS CAMEROUN have 100% computerized accounting systems they management still find it difficult to track down errors and fraud, Adetayo et al (2009). This could be due to the fact that the accountant or those in charge of the computerized accounting system are not computer literates and so face difficulties in using the computerized system and So, this research work has been carried out;

To evaluate the effects of this new way of keeping accounting records (computerized) has had on the quality performance of financial reporting in ADVANS CAMEROUN and also suggest ways in which it can be improved (modified).

Despite the fact that computerized accounting is advantageous (some of these advantages include the fact that it is time saving, accurate and it is good in fraud detection), there are still private companies which have not implemented this system and this has eventually led to incidences of accounting malpractices (such as fraud), delay in preparing financial reports and misreporting of financial statements. There has been an increase in accounting problems associated with financial reporting, hence killing most businesses that fall victims of this circumstance. Financial reports produced by ADVANS CAMEROUN should be secured so that in the future, it can be compared with past work so as to see if the organization is making a progress or not. Thus, this research work seeks; To find out the effects of Computerized Accounting system on the quality performance of financial reporting in ADVANS CAMEROUN Ltd

1.2  Research Questions

• Main Research Question

1. What are the effects of computerized accounting systems on the quality performance of financial reporting in ADVANS CAMEROUN Bafoussam

·         Specific Research Questions

What is the effect of Information Tecnology (IT) literacy on the quality performance of financial reporting in ADVANS CAMEROUN

What is the effect of accounting software on the quality performance of financial reporting in ADVANS CAMEROUN

What is the relevance of system security on the quality performance of financial reports in ADVANS CAMEROUN

1.3  Objectives of the Study

• Main Objective

To analyze the effects of computerized Accounting systems on the quality performance of financial reporting in ADVANS CAMEROUN

·         Specific Objectives

To evaluate the effects of Information Tecnology (IT) literacy on the quality performance of financial reporting in Advans Cameroun (ADVANS CAMEROUN) Bafoussam Prentemps

To assess the extent to which accounting software contribute to the quality performance of financial reporting in ADVANS CAMEROUN

To assess the relevance of system security on the quality performance of financial reports in ADVANS CAMEROUN)