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The Impact of Information and Communication Technology (ICT) On Accounting Profession in Nigeria

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The Impact of Information and Communication Technology (ICT) On Accounting Profession in Nigeria.

ABSTRACT

This study evaluates the relationship between ICT and the accounting profession in Nigeria. The research instrument employed in this study is a closed-ended structured questionnaire administered to the staff members of the selected companies.

The data collected and gathered from the research instrument employed, are analyzed using a chi-square statistical tool, a nonparametric test used to determine whether a systematic relationship exists between two (2) variables.

The statistical package for social science (SPSS) was employed for the data analysis. The result generated from the study indicates that there is a significant statistical relationship between ICT and the accounting profession in Nigeria.

The study concluded that a positive and strong relationship of ICT has an impact on the accounting profession in Nigeria.

ICT infrastructure is the key to the rapid economic and social development of a country, which has also impacted on the accounting profession in one way or the other. (Hajela, 2005).

This finding is also in line with Buseni James(2003) who found out that ICT use is correlated with workers skills suggesting that firms that use high levels of ICT also employ more knowledge workers

TABLE OF CONTENTS

Title page —————————————————————————————————i
Declaration ————————————————————————————————-ii
Certification ———————————————————————————————–iii
Dedication ————————————————————————————————-iv
Acknowledgments —————————————————————————————v
Abstract —————————————————————————————————–vi
Table of Contents —————————————————————————————–vii
List of Tables ———————————————————————————————–xi

CHAPTER ONE: INTRODUCTION
1.1 Background of the study ————————————————————————- 1
1.2 Objectives of the Study ————————————————————————— 4
1.3 Statement of Research Problem —————————————————————– 5
1.4 Research Questions ——————————————————————————– 5
1.5 Research Hypothesis ——————————————————————————-6
1.6 Significance of the Study ————————————————————————-7
1.7 Scope of the Study ———————————————————————————7
1.8 Organization of the Study ————————————————————————–7
1.9 Operational Definition of Terms ——————————————————————8

CHAPTER TWO: LITERATURE REVIEW—————————————————— 9
2.1 Introduction ——————————————————————————————-9
2.2 Conceptual Clarification ——————————————————————————9
2.2.1 Information Technology ————————————————————————9
2.2.2 Accounting Profession ———————————————————————— 10
2.2.3 Information and Communication Technology ——————————————– 11
2.2.3.1 Information Technology Functions——————————————————11
2.2.3.2 Uses of ICT in Accounting Profession ————————————————-12
2.2.4.1 Human treats to Information Technology——————————————————13
2.2.4.2 Measures against Technology Fraud————————————————————-15
2.2.5.1 The Roles of Accountants in an Organization————————————————– 18
2.2.5.2 Types of Accountants —————————————————————————–20
2.3 Theoretical Framework——————————————————————————-21
2.3.1 Conveyance Theory ——————————————————————————–21
2.3.2 Technology Acceptance Theory —————————————————————-22
2.3.3 Information and Communication Theory ——————————————————21
2.4 Review of Empirical literature ———————————————————————-21
2.4.1 Summary of Review of Empirical Literature ————————————————–28

CHAPTER THREE: METHODOLOGY ————————————————————33
3.1 Introduction ———————————————————————————————33
3.2 Research Population ————————————————————————————33
3.3 Sampling and Sampling Techniques —————————————————————-34
3.4 Research Instrument ————————————————————————————34
3.5 Validation and Reliability of Research Instrument ————————————————34
3.6 Data Collection Techniques ————————————————————————34
3.7 Data Analysis Techniques ————————————————————————–35

CHAPTER FOUR: Data Presentation and Analysis———————————————–36
4.0 Introduction ——————————————————————————————–36
4.1 Data Analysis and Presentation ——————————————————————–36
4.1.1 Analysis of Demographic Characteristics of Respondents——————————–36
4.2. Analysis of Chi Square Statistical Test ————————————————————40
4.2.1 Test of Hypothesis One ———————————————————————–49
4.2.2 Test of Hypothesis Two—————————————————————————-50
4.2.3 Test of Hypothesis Three————————————————————————51
4.2.4 Test of Hypothesis Four —————————————————————————52

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Major Findings ———————————————————————–54
5.2 Conclusion———————————————————————————————–55
5.3 Recommendation ————————————————————————————-55
5.4 Contribution to Knowledge ————————————————————————56
Bibliography ——————————————————————————————57
Appendix 1 ———————————————————————————————60
Appendix 2———————————————————————————————61

INTRODUCTION

BACKGROUND OF STUDY

Accounting is the process of identifying, classifying and recording, and presenting of financial-economic activities of an entity with the aim of facilitating decision-making by the users of the information.

This process is usually done manually with the use of separate ledgers to record financial transactions. It involves the use of paper, books, and pens to record and prepare financial statements and manual calculations.

This task is tedious and time-consuming and can therefore lead to several human errors. This occurrence might be minimal in small entities such as sole proprietorship.

However, in big entities such as a public limited liability company, these errors could occur more often without the possibility of being detected which could affect the entity in the long run. There is no doubt that the manual system of accounting is cheaper than the automated accounting system which is one of the reasons why small businesses still use it.

But as a business grows, there is a need for a shift from manual accounting of financial transactions to automated processes i.e. Information and Communication Technology especially in today’s generation where most transactions are performed with the use of electronic gadgets such as Computers, Computer software, and the internet.

The Accountant only needs to enter the transactions into the software which simply performs computations and presentations thereby relieving the accountant of such task.

Any company with a large size seeking to be efficient and effective in its financial operations would need to adopt an automated system of accounting. For a company to attain efficiency and effectiveness, it would require the capacity to process accurate and timely information, hence, the need for Information and Communication Technology.

Information and Communication Technology (ICT) is often used as an extended synonym for information technology (IT) but is a more specific term that stresses the role of unified communications and the integration of telecommunications (telephones lines and wireless signals), computers as well as necessary enterprise software, middleware, storage, and audiovisual systems, which enables users to access, store, transmit and manipulate information.

ICT is an umbrella term that includes any communication device or application, encompassing; ratio, television, cellular phones, computer and network hardware and software. Information technology has been around for a long time as long as people have been around because there were always ways of communicating through technology available at that point in time.

There are four (4) main ages that divide up the history of information technology. These ages include; pre-mechanical, mechanical, electromechanical, and electronic-only the latest age i.e. electronic, and some of the electromechanical age really affects us today.

In the recent past, before the inception of ICT, accountants of an organization were using a socially acceptable behavioral method of reporting accounting and economic reports, carried out during accounting year ends. Accounts prepared include a statement of account, statement of financial position, cash book, and statement of cash flow.

The ICT, on accounting practice in Nigeria, has become a subject of fundamental importance and concerns to all business enterprises and is gradually becoming a prerequisite for local and international competitiveness.

It is obvious that the way accountants plan and take decisions on what and how to provide their service in the accounting profession has been affected immensely by Information and Communication Technology (ICT).

This has continued to change the manner in which accounting practice and their corporate relationships are organized worldwide and the variety of innovative devices available to improve and facilitate the speed and quality of service delivery.

A major ICT that has been made on accounting is the ability of companies to develop and use computerized systems to track and record financial transactions properly and accurately.

The recording of business transactions manually on ledgers, papers, spreadsheets, etc has been translated and computerized for quick and easy presentation of individual financial transactions and give a report on it. (Granlund & Mouritsen, 2003).

Shanker(2008)ascertains that the use of ICT in many organizations has assisted in reducing transactional cost, overcome the constraints of distance, and have cut across geographic boundaries thereby assisting to improve coordination of activities within organizational boundaries.

It is very clear that the computerized accounting system has improved the functionality of accounting departments by increasing the timeliness of accounting information and report preparation of statement of cash flow, market shares report and departmental profit&loss are now more accessible with computerized system.

Computerized accounting systems have internal check and balance measures to ensure that all transactions and accounts are properly balanced before the financial statement is finally prepared.

It also will not allow journal entries to be out of balance when posting, ensuring that individual transactions are properly recorded

BIBLIOGRAPHY

Abisola J.O, (2013) “The Impact of Information and Communication Technology on Internal Controls’ Prevention and Detection of Fraud” Being a Thesis Submitted for the Award of PhD Degree at De Montfort University, UK
Abisola J.O, (2014), “The Impact of Information and Communication Technology on Internal Auditors’ Independence: A PEST Analysis of Nigeria” Journal of Scientific Research & Reports Vol. 3 No.13
Barnaba,O.A (2007).Accountants, Internet and Information London; Prentice hall.
Beardon J. B, Hasty, I. & Coe, B. (1996). “The effect of information technology on productivity in retailing”. Journal of Retailing. Vol. 3, Pg. 23.
Buseni James (2013) “Effects of Information and Communication Technology on Secretaries’ Performance in Contemporary Organisations in Bayelsa State, Nigeria” Information and Knowledge Management, Vol.3, No.5
Contingency theory – Wikipedia, the free encyclopedia. en.m.wikipedia.org/wiki/contingency theory
Fidelis A.A (2013) “Impact of information communication technology (ICT) on corporate performance: A case study of cement manufacturing firms in Nigeria”, Global Advanced Research Journal of Management and Business Studies, Vol.1, No.8, pp. 259-263
Gasper. M (2010) “Information Technology Roles in Accounting Tasks: A multiple case study” International Journal of Trade, Economics and Finance, Vol. 1, No. 1
ICAEW (2007), An Investigation into Accounting Professional Development in West Africa, Sub Region Institute of Chartered Accountants England and Wales Publication. Information Systems Theory. Retrieved from http://www.anandavala.info/tastmotnor/information%20system%20theory.html
Jordan, A. (1999), The impact technology is having on the accounting profession, Journal of Accounting Education, 17, 341
Kwanchukwu (2004) “Information and Communication Technology in Accounting; Practices, Problems and Prospects: A case study of data processing unit Ministry of Finance, Bauchi”. Journal of Computer Science and Engineering, Vol. 1, No. 1
 Manafa P.U, “The impact of information technology in accounting system: A case study of Unilever Nigeria plc Lagos state.” Being a Research Work submitted to the Department of Accountancy, Caritas University

 

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