THE IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) ON ACCOUNTING PROFESSION IN NIGERIA

THE IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) ON ACCOUNTING PROFESSION IN NIGERIA

ABSTRACT

This study evaluates the relationship between ICT and accounting profession in Nigeria. The research instruments 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 chi-square statistical tool, a non-parametric 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 significant statistical relationship between ICT and accounting profession in Nigeria. The study concluded that a positive and strong relationship of ICT has an impact on accounting profession in Nigeria. ICT infrastructure is the key to rapid economic and social development of a country, which has also impacted on 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.

CHAPTER ONE

1.1 BACKGROUND OF STUDY

Accounting is the process of identifying, classifying and recording, and presentation 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 pen 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 possibility of being detected which could affect the entity on 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 presentation thereby relieving the accountant of such task. Any company with large size seeking to be efficient and effective in it financial operations would need to adopt an automated system of accounting. For a company to attain efficiency and effectiveness, it would require 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 audio-visual 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 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 enterprise and is gradually becoming a prerequisite for local and international competitiveness. It is obvious that the way accountants plan and take decision 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 device available to improve and facilitate the speed and quality service delivery. A major ICT has been made on accounting is the ability of companies to develop and use computerized system to track and record financial transactions properly and accurately. The recording of business transaction manually on ledgers, papers, spread sheets etc has been translated and computerized for quick and easy presentation of individual financial transaction and give report on it. (Granlund & Mouritsen, 2003).Shanker(2008)ascertains that the use of ICT in many organization 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 have 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 measure 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.

Since the inception of information and communication technology (ICT), accountants can now process large amount of financial information and process it quickly through computerized accounting system. Quicker processing time for individual transactions has also lessened the amount of time needed to choose out each accounting period. Transactions that would have taken an accountant months or years to prepare are done quickly and faster and thereby cutting high cost that would have resulted in preparing the reports (Pricewaterhousecoopers, June 2008).This study therefore seeks to examine the impact of Information and Communication Technology on accounting practice in Nigeria. This study focused on the overall performance of accounting and auditing firms and how the adoption of Information and Communication Technology impacts on their daily operations.

1.2 STATEMENT OF PROBLEM

The manner in which accountants can potentially add value to economic entities and societies is undergoing a metamorphosis. Accountant worth is now reflected in higher order critical-thinking skills, such as designing, business processes, developing e-business, model in providing independent assurance and integrating strategic knowledge. Hence, most companies have derived a way of recording and reporting transactions. Accounting professionals are expected to take advantage of ICT to automate existing processes for conducting business in new and innovative ways. Growth within management accounting and information system is becoming prominent with the advent of ICT. Enterprise Resource Planning(ERP)system, Software and ancillary equipment such as Automated Teller Machine(ATM), Debitcards, Electronic commerce, Computer hardware, Database, Internet, Intranet, Telecommunication, Oracle, Peachtress, Accounting software and Statistical Package of Social Sciences etc. are related products emanating from ICT. Information and communication technology is presumed to have affected accounting profession positively in so manys,research in these areas have shown that ICT has perceived importance due to its usage across several groups of business firms, especially in the field of auditing.

This study seeks to evaluate the degree of ICT adoption by accounting professionals in the preparation and presentation of financial reported accounts. To what extent are accountants literate with the use of ICT? How relevant is ICT in today’s accounting profession?

1.3 OBJECTIVES OF STUDY

The primary objective of the study is to examine the impact of Information and Communication Technology on accounting profession in Nigeria

The specific objectives of the study are to:

i) Assess the impact of ICT on financial transaction report of selected companies.

ii) Examine the effect of ICT implementation on the financial performance of selected companies

iii) Evaluate the challenges associated with integration of ICT in accounting profession.

iv) Analyze the importance of ICT in training requirement of an accountant.

TOPIC: THE IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) ON ACCOUNTING PROFESSION IN NIGERIA

Format: MS Word

Chapters: 1 - 5
Delivery: Email

Number of Pages: 70

Price: 3000 NGN

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