Effect better performance of organization. This research primarily


of ICT on Accounting Information System and Organizational Performance

J.N. – PhD, ACIB                                                                 

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Department of Banking & Finance, Covenant

Ota, Ogun State

[email protected]


M. Edwin – PhD, MSc, MBA, BSc (Hons), NCE Associate Professor of Strategic Management and Marketing, School of
Business, Covenant University, Ogun State, Nigeria AND Adjunct Lecturer and
External dissertation supervisor for Global MBA students at Manchester
Business School, United Kingdom:

Email: [email protected] or

[email protected]





Nowadays, ICT plays a primary role in the smooth
performance of businesses and their accounting process. ICT proves to be a crucial
tool in the accuracy authenticity of accounting-related information.
Furthermore, to note down the series of accounting-related information,
accounting systems are the tools used ever which includes computer hardware and
computer software programs. To achieve the targeted accomplishment is amongst
the most highlighted aspects of business performance.

Hence, there is a dire need for the proper use of
our talents to make the best art of information technology. If there is no
proper usage of IT (information technology) systems then it will have nearly no
impact on the better performance of organization.

This research primarily focus on the major role
played by information technology in accounting-related systems. Pearson’s
correlation plays a primary role in the findings of the research using SPSS and
considering a sample size of 20 numbers in financial dealings and others
accounting-related departments in Covenant University. This research enforces a
positive correlation among ICT and firm efficiency and also among ICT and
accounting-related systems.


Information technology, Returns, accounting-related
system, firm efficiency.










1.0   Background
of the study


A few companies use information technology as a
primary tool. The ever-advancing technologies are taking its roots. But the
drawbacks of information technology include those computer software’s which
uses such difficult languages that cannot be understood easily. These
software’s uses digital codes that can only be understood when proper raining
is given to the users. The ability to adjust to such changes is a primary
challenge. In order to do ones job, there should be a great deal of focus on
job hence some employees focus on job as considers it a task but some do not
take any kind of interest in their jobs. The advantages of ICT on various
organizations efficiency cannot be taken into account easily because measuring
the importance of ICT is factually a quantitative features. Organizations have
to do more hard work in order to be in trend hence their investment must be
much more. Nowadays, various fields like accounting are running through the use
of technological equipment’s like computers and other technological
advancements. Accountants were engaged in accounting-related matters when there
was trend of traditional matters. Human had to keep all the accounting records
manually, various financial statements were made by the accountants without the
use of technological advancements (Linus, 2012). Francis (2013) analyzed the
efficiency of various firms in the field of accounting and auditing has
increased the use of technological advancements. In order for the companies to
stay prominent all the plans must be in ordnance with ICT. Furthermore the
usage of pcs in firms for the manipulation of various accounting maters has
greatly increased the efficiency of the firms. Nowadays with the help of pcs,
records can be kept much more safety and accurately. ICT has nowadays greatly
increased the speed and has causes an increase in employment rate.

ICT has also increased the profit level of the firms and it is required
to enhance the progress of the firm in terms of their efficiency. ICT also
helps in growth of businesses and firms (Ali, Abbas & Reza, 2013). Keller &
Gracht (2014)
analyzed that ICT is very helpful in the establishment of roads,
building and hospitals etc. the advancements in IT will open more roads towards
success and progress in terms of the efficiency of the firms.


2.0   Literature


Nowadays accounting system and efficiency of the
firm have greatly developed due to the advancements in information technology.
Previous and recent, both information need to be collected in order to present
a solution to the problem concerned (Linus, 2012). ICT is not a new terminology but it has
been used since long time and have provided employment to a lot of people. ICT
has dominated several activities and thus have improved the efficiency of the

Actually the accounting records are kept by accounting
system. Information about accounting system is actually the advancement of
accounting system.






2.1 IT
Definition: Anonymous
analyzed that IT is actually the collection and
analyses of the information. IT includes the usage of pcs and other
technological advancements in the proper utilization of information and
transferring of information from generations in term of pcs fields. Technology can
be explained in terms of computer information-related processes. IT provides
the basis for the improvement of human’s capabilities in order for the better
processing of information (Greenstein-Prosch, McKee & Quick, 2008). Choo & Shahryar (2013) examined that various computerized programs
that enhances the efficiency in the fields of management processes and
operations in firms. The above definition shows that IT is a very vast field.
The tools of information technology such as pcs etc. are used to collect and
process information and this is most common in companies. It is generally
related to manipulating process. Furthermore, the synonym for IT is ICT. It is
a more general term that enhances the important communications and
telecommunication which have a unique role in enabling users to store and
process information. Thus, it shows the relationship among the ICT and IT.


Factors of IT


According to Anonymous (2014) IT can be divided as

Hardware: these are the parts of computers that are
tangibles and have physically existence. Hardware can be further elaborate into
four steps which are

Input device: devices used for the input of data are input devices
such as keyboard, mouse, printer and scanner etc.

used for the output information: Devices which are
used for facing date out of a computer e.g. speaker

It is the hardware that processes the information in the computer .it contain
many important parts such as mother board hence it play a primary role date

used for storing information: The devices used for
storing information such kind of device has two types

and secondary: Ram and Rom are the example of primary
and secondary storage devices.

Programs of computer that can only see but cannot touched are called software

Three types of software
are following

software: The way of computer works actually decided by
system software

software: In order to set other
programs and software, his software is used in JAVA.

software: Using this software, users can take any kind of
help as to deal with various task software related to media development is its

Actually it’s the letter and figures stored in devices that further converted
into information.

Principles used to determine the ways through which useful data is exchanged



Wi-Fi is a worldwide used tool in order to connect billions of people and devices
around the world.

power: It is also used to carry out various I.T
operations .the efficiency of their system is determined by manual power.


Tools of information technology

According to (Anonymous,
2015) the various aspects of I.T are Following

based on technology: Computers a device used for the storage
of useful data .the art of design computer called computer based technology.
Computer based technological advanced have brought about revolution the
processing of data computer have made it easy to transfer information through
long distance

based communication: People exchange their views and ideas
through communication technology .data is shared through this technology
between individuals .it can be defined as the designation of communication
related operation communication technology have developed through the
information technology.

related to telecommunication: People exchange their
views regarding politics and other issue through electronics devices like
radio, artificial satellites around the global there is no loss of data through
alteration in telecommunication devices. Telecommunication has further been
improved through sudden change in mode from anlage to digital (Anonymous 2014).

§  Technology
of computer communication: It
describes the relation among communication and technologies. Communication
actually refers to the transfer of views among individuals. The transferring of
data from one mode to another in computers (as in electrical mode from analyses
to digital) is actually computing procedures. Nowadays, there have been huge
developments in computers and communication technology which have led to the
development of information based technology.


Division of IT


 There are three division of IT according to the business review of Harvard
which are as

IT-related to function: this division of IT can be used to perform certain
specific tasks, not multiple tasks simultaneously. Spread sheets which are
among its examples are used by individuals related to different fields such as
accounting, medicine , engineering as it makes their study in their own fields
to be easy.

IT-related to networking: instant messaging
systems and E-mails are among its most examples such type of technology
provides a bases for the people to communicate with each other as it is
approximately similar in features to communication technology.

IT-related to enterprise: Business employees and employees of marketing and
other related fields can communicate and be in touch with each other through
this type of



Different firms use this type of technology to improve the efficiency of work
performed by their employees.


ICT monitoring system

In US, part of the budget spent on IT is $3.5 billion and it increase 6%
per annum. Central regulatory institute has allocated $82 trillion to the IT
approximately. The prices of IT has out a huge burden on the IT budgets (Keller & Gracht,

The following
are the average IT budget has breakdown:

31% personnel
costs (internal)

Software cots is
29% (external/purchasing category) and hardware costs is 26 %
(external/purchasing category).

External service
providers cost is 14% (external/services).


Accounting meaning:

The system of accounting is actually the way the
firm store and then process accounting information. It comprises those ways and
scales used by the companies in the financial statements. This system includes
individuals and machinery. Accounting system actually cases electronically
stored information, ways and measures used to collect, store and then
demonstrate the accounting statements for financial decisions. It’s also used
in income statement of businesses cash and cash out in businesses are also the
features of accounting system. In earlier times, people would keep records on registers
etc. Nowadays, advanced and computer based technologies are in trend.


Accounting system kinds (Anonymous,

There are different types of accounting system which
are as under:

Book-keeping record system: In manual system, there is electronic devices used
in accounting phenomena. Manually, financial statements are prepared and
recorded. This system is related to small-scale businesses, money is preserved
which would otherwise be used in buying electronic devices hence the work is distributed
over the workers for manual operations.

Legal system: This system is very much used electronic system of
accounting, which was used in earlier times. Before, IT became so advanced,
this system was used. This system functions by storing earlier information.  This is very old system and when some kind of
fault occurs in this system, then it’s too much costly to repair. It is also
because programmers are too old to get.

Modern technological and electronic
system: This system has made
accounting system too much easier to operate because it can process any kind of
software’s, it is electronic-based hence does not require much more human
efforts. Furthermore, as this kind of system is advanced one hence it requires
skillful, trained and educated expertise. The fraction of budget allocated for
this system is very huge hence the businesses expenditures in term of these
technological advancements have very high value. In much more firms and
businesses-on large scale, this system is used mostly.


Accounting system tools (Nzomo,

There are some tools which are as

User: The main tool of the system is the user. Through
users different software can be run in the firms and companies.

Ways used in this system: These are the ways used in this system for analysis
of information.

Information: It is the recorded series of information of the
relevant to the operations.

Programming: These are the untouchable parts of computer used
for processing information.

Hardware: These are the tangible parts used for running of
the computers.

Privacy security: Actually, privacy security is a means of security


Accounting operations Role


Information can be recorded: economic data can be
divided and demonstrated. Through this system, economic data can be
transferred. For smooth running of the operation various steps are being taken.


Technological advancement and operation accounting


Operations of accounting are very much complicated
terms of its work acts, however technological advancement in term of
information has made it to be very easy. Dumitru et al., (2010) the data based technology and operating of
accounting are actually in association with each other. Furthermore, the
artificial data is the use in the administration and by various individuals
belonging to different groups. In recent data based technological advancements
are highly used in operations of finance.


EDP meaning: It can be
actually defined as the information that is meaningless is converted into
meaningful information to be helpful for finance devision-makers.it actually
works by programming and transferring information regarding operations, the
economist gets information main papers and then the information is entered and
analyzed using electronic devices into data that is the used by users.


Accounting operations on ICT

Quick response: ICT brings quick response to businesses. In recent,
the computer-related accounting system is much faster as compared to manual
accounting system. Through ICT, the accounting information is more reliable and
faster. The manual calculation waste the time but computerized accounting
system save the time and calculation is done automatically.

Cost: For the accounting system, the businesses spend a
required amount on computer hardware and software that has increased the
organization expenditures.



Accuracy: The ICT help to give accurate and reliable result to
businesses more efficient and effectively.


Backup: ICT provide to store data through electronic devices
such as computer. If the data has lost, it can be recover through software’s.

Elasticity: There is flexibility in the ICT because it provide
different ways for accounting system. ICT is not a one way process but it has
different ways of methods.

On time: ICT helps to provide financial information easily
when it is required. Such type of data has been recorded and divided hence can
be find out easily.

Privacy: Through ICT, the recorded data is stored safely as
through various privacy tools such as password. But unlike this, manual
operations are quite not reliable. Only the people in high power have the
required data thus can be used easily.

Efficiency: ICT provide more efficient result for accounting
system. Through computers it give accurate accounting information with less
human errors.


Define organization

Generally, it refers to the category of individuals
with a particular motive. Organization can be defined as a set of people in the
form of a group organized in such a way to hit the specific target motives. It
come in being from the overall endeavors of the people making the organization.
Organization includes expertise, division of labor, leadership and planning.


Empirical framework (Greenstein,
McKee & Quick, 2008)


The theory focus widely on the utilization,
implementation and adaptation of IT. Hence, according to recent study that
focus on the usage of IT in businesses. Some of the investigators examined the
association among business features and usage of technologies and components
also influence the utilization of technologies in businesses. By Apulu
and Lathan (2009),
they were analyzed that ICT helps to give fast response to consumer, businesses
react to give quick feedback to their consumers and also be capable to look at
the market with new opportunities. This gives that businesses having ability to
exploit the benefits given by ICT can manage with various types of creative
system in their firms. After that ICT influenced the performance of businesses
in various ways.

According to Alam and Noor (2009), the information technology is an important
factor in todays that give ways to businesses to success with high efficiency
on the global scale. Hence, to create strong image and also dominant on
competitors, the firm should utilize the technologies with modernization.

According to Calhoun et al. the technology use in
firms is influenced the state culture and the defined the relationship among
few firms features and usage of IT. Further, culture stated the locus of
technology implementation in firms, that as the constitution of subjectivity.
These theory do not defined the connection among kinds of software that firms
utilize for their internal process.


et al. (2002) has been investigated for
the US, that installing and utilize the ICT have positive impact to increase
the firm productivity. Black and Lynch (2001), examined the same results, they defined the effect of ICT, HR practices
and businesses rearranging production.

(1970) defined that how ICT react the
firm performance. He suggested that ICT does not effect to control a single
department of an organization but influenced the organization as a whole.

(1999) argued that to applying ICT was
highly operational for the firm instead of centralize and organized body. The
ICT provide to decrease the firm expenses in the operational process. Through this,
the practice of IT goes up and also generate quality results.

Basically, from the previous study, ICT is like a
weapon for the employees, how best they can utilize it. James,
(2013) examined one point from this
study that the firms feedback require ICT which are installed. For more
productive, the firm hire and train people who are experts on the operating
technologies. Firm should use modern technologies that require finance to
invest in it. The overall performance depend upon the ICT. ICT give benefits to
firms to be dominant on their competitors. Simply, that higher performance of
firm cause utilizing modern technologies (Shanker, 2016). Li and Ye




For every organization, ICT has become a vital
factor in accounting and firm performance. It is concluded that information
technology can be enhanced the rapidness in creating the financial reports with
reliable and accurate results and also influence firm day to day transactions
with clients and external people, through this the firm can generate high
return. ICT also give fair and clear result to the organization. The ICT
influence both accounting system and firm performance. The ICT solve the enough
problems of an organization. The ICT has been given benefits in the
communication, job design and globalization. ICT has great impact to success a
fir, help to increase firm productivity, increase accounting system proficiency
and increase turnover.


The whole theory tell us to build a strong image,
the businesses have to invest proper amount on ICT and also utilize the
technologies on the best way, and for this the supportive tools are necessary.
The world is going modern day by bay the new technologies and machineries are
inventing, to be competent the business should utilize the machineries and
computers for their process. The ICT is same universally and it has no limit of


Empirical Findings


There are some findings which are fundament parts of
the study are as is:

There is a
strong impact among accounting system and IT.

There is a
strong impact among machineries and challenges.

 There is a strong impact among business
performance and IT.






the previous theory we have concluded that there is strong relationship of
information, communication and technology on firm results and accounting
system. In today world businesses are bringing new technologies for their
valuable operations. The firms are spending large amount of money on IT because
without taking risk and investment the firm cannot gain high profit. This paper
examine that ICT is not only imposing on the businesses bur should also be
implement on external parts such as societies, value, beliefs etc. ICT play a
vital role for the outside factors that should be assumed. This study help
leaders, workers and regulatory institutes to get knowledge from it.  Moreover this study aim to provide guidance
to workers about ICT and what are the effect of it on their job and how best
can adjust it in the present world.




















According to previous concepts and theory discussion
the recommendations are developed which are as under:

The theory has
been suggested that the firm performance and accounting system depend on the
ICT. So the firms are appreciated to invest proper amount of capital on the technologies.

installing ICT managers should also look at the outer factors and how these
factors influence the consequences processes.

Give proper
training to employees, employees should participate, encourage your employees
and through this the productivity can also be enhanced.



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