The Effect of Erp on Accounting Information Processing

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Table of Contents

  • Background To The Study
  • Statement Of The Problem
  • Research Questions
  • Objective Of The Study
  • Hypothesis Of The Study
  • Justification For The Study
    Scope Of The Study
  • Operational Definition Of Terms

Background To The Study

The principal motivation of this study exists to measure the effect of Enterprise Resources Planning (ERP) system implementation on Accounting Information Processing. Explicitly, this learning scrutinizes whether the enactment of ERP (Enterprise Resources Planning) method strongly influence the Accounting Information Processing. Argument was made that an ERP (Enterprise Resources Planning) classification is the utmost imperative change in the corporate procedure of information technology in the 1900s (Davenport 1998). ERP remains a business practice management software that tolerates an organization to practice a system of incorporated applications to accomplish the business, also automating countless back organization purposes that is interrelated to technology, service and human resources. ERP (Enterprise Resources Planning) software is characteristically a set of incorporated application that an institute can use to accumulate, store, achieve and interpret data from these many business happenings. ERP (Enterprise Resources Planning) offers an assimilated and incessant view of fundamental business process by common data bases conserved by a data base controlling system.

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The enactment of ERP system was the ulmost and a very substantial information technology (IT) that interacted with Accounting Information Processing in the last two eras ( Kanellou and Spathis, 2013). There is every possibility that ERP system is advantageous to some organizations but the high rate of failure of ERP should be of a major concern. There are some studies that has been carried out on ERP, and some findings have been known that ERP failure rate is about 70%, while 3 ( three) quarter of the system has been unsuccessful.

On an ordinary level, 178% of these system stood over budgeted, and it procured 2. 5 times lengthier than intended and attained only 30% of the guaranteed benefits (Amid 2012; Kanellou and Spathis, 2013). Several advent of significant literary evidence in academia and other practice over wide-ranging adoption of ERP systems in Western and Middle Eastern countries comparable. Though the beginning of economic growth in advancing economies is turning the ERP system into a significant targets gradually for ERP vendor ( O’Kane,2002; Davidson,2002; Huang 2004), there is a little empirical support to the implementation of Enterprise Resources Planning system with reference to a particular professed benefits and some other effect for accounting information system processing. In addition, some authors have been unable to identify the professed benefits that is connected to the implementation of ERP system in some studies carried out. This paper will help fill the gap through a proper investigation with empirical approach to the effect of ERP enactment on Accounting Information Processing of embracing companies in Nigeria. Emphasis was made on the changes in accounting information processes and procedures to determine the extent to which ERP systems has affected transactions processing in some companies examined. The reason for this is to know the benefit associated with ERP systems implemenetation in Nigeria form the user’s point of view and to make provision for disparagements and to make the most of the efficacy and the proficiency of ERP software packages to accomplish unremitting reasonable compensations. The outcome of this study will aid and serves as a stage for International evaluation of ERP system implementation.

Statement Of The Problem

Many authors, writers and others have done research on the effect of ERP on audit report lag or also research has been done on the impact of ERP on future financial performance and many more, but the area of focus here is the impact of ERP (Earnings Resource Planning) system on Accounting Information Processing, how those effect can be solved or realistic clarification on the relationship that ERP has on accounting information system processes. Also, this scope of study will broaden our understanding on what ERP (Earnings Resource Planning) system is all about and also accounting information system. ERP (Earnings Resource Planning) scheme is prefabricated business software that assimilates totally, aspect of a company’s industrialized, sales and publicizing, buying and dissemination, task administration, human means and new schemes hence as on the way to facilitate an enterprise to proficiently and effectually accomplish its resources.

They remain premeditated as per an incorporated set of components that discourse a wide-ranging range of rudimentary corporate tasks. In the collected works, ERP (Earnings Resources Planning) applications stay conversed for few countries (Murcia and Whitley 2007, Vathanophas and Stuart 2009, Wickramasinghe and Gunawardena 2010), for various industries (Wu 2009), likewise used on behalf of some scopes of enterprises Lee 2009). The main purpose of Accounting information system processing is to operate data gathering, processing, classifying and also reporting accounting events with the aim of making provision for pertinent information for keeping information, stocks records and also to make decisions, also provides financial reports of any kind needed in timely basis (Awosejo 2013).

Research Questions

The study attempts to give answers toward the subsequent enquiries: What stands as the reasons for ERP systems implementation in Nigeria?To what degree do ERP systems implementation effect on the financial transaction processing?To what extent has the implementation of ERP systems improve accounting information processing?

Objective Of The Study

The broad objective of this study is on the way to scrutinize the suggestion of ERP (Enterprise Resource Planning) enactment through a comprehensive spectrum of accounting information processing. The specific objectives are to: Determine respondents’ observations on the reasons for ERP systems implementation;Examine the observations of respondent on the effect enterprise resource planning (ERP) system implementation on accounting information processing and Determine whether there have been significant benefits achieved with ERP system after its adoption.

Hypothesis Of The Study

The Null hypothesis (H0) will be tested against the Alternative hypothesis (H1). H0: There are not at all substantial enhancements in accounting information system following to the implementation of ERP system.

Justification For The Study

The study will serve as a body of knowledge to be referred to by present as well as future researchers as it meant to address a problem not yet well discussed and explored in the academic ground. To justify if there is any relationship between the implantation of ERP and accounting information processing. A very motivating facet of ERP (Enterprise Resource Planning) classification is that despite managers, accountants, consultants, business analysts, managers, chief financial (CFOs), auditors, regulators and tax agencies resolve to implement ERP (Enterprise Resource Planning) structures aimed at their specific functioning resolution. The resulting financial reports can be used internally by management or externally by other interested parties including investors, creditors and also tax authorities. This study will help investigate the effect of ERP system implementation on accounting information processing with an important reference to Nigerian.

Scope Of The Study

As stated in the objective that the motivational force for this study was generated from the effect ERP (Enterprise Resources Planning) system implementation has on Accounting Information Planning in developing economies. The scope of this study will be restricted solely to companies that have implemented ERP systems after due consultation with major ERP providers in Nigeria. The location for the study will be across manufacturing, hotels and IT services in responding organizations. The focus of the study in terms of study group includes finance, accounts and other executives holding primary responsibilities for accounting information processing.

Operational Definition Of Terms

These are to be important concepts in this study: ERP, Accounting Information system Processing, Transaction processing systems, Nigeria, financial transaction processing, GAAP. ERP (ENTERPRISE RESOURCES PLANNING)It serve as aggregation that impasses the dissimilar computer system used for a large organization. Through ERP (Earnings Resources Planning), every departments have a system, but there could be an effective communication and sharing of information in an easier way with other department in the company. Info on the ERP (Earnings Resources Planning) is to be added in actual time by users. GAAP (General Accepted Accounting Principles)This is an assortment of common surveyed accounting philosophies and principles intended for financial reporting. It is used in the research and standardizing the report of Financial Statements also cash flow statements.

ACCOUNTING INFORMATION SYSTEM PROCESSING: This is a system in which business collects, store, manage, process, retrieve and also make report of its financial data so that it can be used by accountants, consultants, business analysts, managers, chief financial (CFOs), auditors, regulators and tax agencies.

FINANCIAL TRANSACTION PROCESSING: this is an agreement or a communication carried out between a buyer and a seller to make exchange of assent for payment. It is a process that makes a change in the status of the finances of two or more businesses or individuals.

TRANSACTION PROCESSING SYSTEM (TPS): This has to deal with an information processing system for business transactions encompassing the accumulation, amendment and recovery of all transaction data. It is also known as transaction processing or real-time processing. A TPS is often juxtaposed with a batch process system, where numerous requirements are all implemented at one time. The TPS necessitates the communication of a user, whereas batch processing system does not necessitate user engrossment.

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