A PROJECT REPORT

On
“A comparative analysis of computerized accounting system
and Manual accounting system”

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT

FOR THE AWARD OF BACHELOR OF COMMERCE HONOURS

BANGALORE UNIVERSITY
During the Academic year 2020-2021

SUBMITTED BY
Tharun S
B. COM HONS., VI SEMESTER
(REG.NO:189UC48048)

UNDER THE GUIDANCE OF

Mr. Yallappa C
Assistant Professor

DEPARTMENT OF COMMERCE
CHRIST ACADEMY INSTITUTE FOR ADVANCED STUDIES
BANGALORE
(Affiliated to Bangalore University)
 DECLARATION

I hereby declare that the Project Report / Dissertation entitled

“A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING

SYSTEM AND MANUAL ACCOUNTING SYSTEM” submitted to

BANGALORE UNIVERSITY in partial fulfillment of the requirements for the award of
Degree in Bachelor of Commerce Honours at Christ Academy Institute For Advanced
Studies on a record of independent project work carried out by myself under the guidance and
supervisions of Mr. Yallappa C and this report does not form part of any dissertations or
report previously submitted to this university or any other university for the award of any
degree / diploma / associate -ship or other similar title.

Date: 16/08/2021 THARUN S

Place: Bangalore (Reg. No:189UC48048)
 DEPARTMENT OF COMMERCE
CHRIST ACADEMY INSTITUTE FOR ADVANCED STUDIES
BANGALORE- 83

COLLEGE CERTIFICATE

This is to Certify that, Mr. Tharun S Bearing Reg. No 189UC48048. has successfully completed
the Project titled “A COMPARATIVE ANALYSIS OF COMPUTERIZED ACCOUNTING
SYSTEM AND MANUAL ACCOUNTING SYSTEM” under the guidance of Mr. Yallappa C, as
the partial fulfillment of the requirements for the award of Bachelor of Commerce Honours under
Bangalore University for the Academic year 2020-2021.

Mr. Yallappa C Ms. Monika Thakur

Internal Guide Head of The
Department,
Commerce
 ACKNOWLEDGEMENT

First, I would like to thank all the people who have helped me to collect primary information.
It is indeed with a great sense of pleasure and immense sense of gratitude that I acknowledge the
help of these individuals.
I am highly indebted to Director Rev. Fr. Antony, for the facilities provided to accomplish this
Dissertation Project report.
I would like to thank my Principal Rev. Fr. Dr. Babu Paul, for the facilities provided to
accomplish this Dissertation Project report.
I would like to thank my coordinator Ms. Monika Thakur, for her constructive criticism
throughout my Dissertation Project report.
I would like to thank Mr. Yallappa C, College internal guide for his support and advice to get and
complete my Dissertation Project report.
I am extremely grateful to my department staff members and friends who helped me in successful
completion of this Dissertation Project report.

THARUN S
(Reg. No: 189UC48048)

LIST OF GRAPHS
 PAGE
SL.NO TITLE
NO.
Is manual accounting system, the most
commonly used accounting information
Graph
Table 5.1.1 54
techniques in the industry for management
LISTOF
decision – making?
LIST OFCONTENTS
TABLES
Are there funds lost through frauds and
Graph
Table 5.1.2 forgeries when organizations use software 55
CHAPTER accounting system? PAGE
S Do you thinkCONTENTS
that the use of software NO.
accounting system is more proficient, accurate
Graph
Table 5.1.3 56
and pleasurable than manual accounting
1
system?
1 INTRODUCTION
As an accountant or manager does the use of
Graph
Table 5.1.4 manual accounting system create any special 57
problems.
31
2 As an accountant
REVIEW OF or LITERATURE
manager does the use of
Graph
Table 5.1.5 software accounting system create any special 58
problems?
Does it take more financial resources to run a 41
Graph
Table
3
5.1.6 software system than manual accounting
RESEARCH DESIGN
59
system?
Does your organization encounter frauds and
Graph
Table 5.1.7 forgeries when using software than the manual 60
50
accountingCOMPANY
system? PROFILE
4
Does the software accounting system increase
Graph
Table 5.1.8 effectiveness and efficiency in your 61
organization than manual accounting system?
Are frauds and forgeries encouraged with the 53
DATA ANALYSIS AND INTERPRETATION
Graph
Table
5 5.1.9 use of software accounting system than with 62
manual accounting system?
Has there been any increase in the quality of
Table
Graph5.1.10
5.1.10 work done since the use of software accounting 63
SUMMARY OF FINDINGS, CONCLUSIONS
6 system? 71
AND SUGGESTIONS.
Does the software accounting system handle
Graph
Table 5.1.11 large volume of data than the manual 64
accounting system?
BIBLIOGRAPHY
7. Is software accounting system capable of 74
storing retrieving, analyzing, processing,
Graph
Table 5.1.12 65
summarizing and reporting promptly than
manual accounting system?
Is manual accounting system more effective
and efficiently in reducing total amounts of
Graph
Table 5.1.13 66
funds lost through frauds and forgeries than
software accounting system?
 A comparative analysis of computerized accounting system and Manual
accounting system

CHAPTER 1

1.1 Introduction

This research study is a comparative analysis of computerized accounting system and

manual accounting system and the study is a comparative evaluation of computerized
accounting system and manual accounting system to ascertain which one is more
effective and efficient than the other. Data were collected from primary and secondary
sources which include the use of questionnaires, personal observations, text books,
journals and internet. Three hypotheses were formulated, while questionnaires were
analyzed in tabular form using simple percentage. It was discovered that software
accounting system is expensive to run, software accounting system handles larger
volume of data than manual accounting system and software accounting system
encourages fraud, and funds can be lost in organization with the use of software
accounting system. As a result of the comparison between manual accounting system
and computerized accounting system, to attain a larger volume of data and work
accuracy in a shorter period it is better for organizations to use computerized
accounting system to increase their efficiency. Those studying accounting as a
profession should be introduced to both the theoretical and practical aspect of
software accounting and to reduce funds lost through frauds and forgeries managers
and accountants should provide software developers with progressive information
relating to their business activities.

1.2 Background Of The Study

Accounting system according to an Italian monk, Luca Pacioli (1491), is the

combination of personnel records and procedures that a business uses to meet its need
for financial data. Financial accounting also encompasses the summary of information
and presentation of periodic reports such as profit and loss statement and balance
sheet. The historical firms of accounting were of different degree of sophistication
according to the need and techniques of the time. This is why modern accounting is
based on the double entry system and the recognition of the dual nature of each
transaction and this gives a co-ordinate support for the control of all the transaction of
a business.

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Accounting system according to business dictionary is an organized set of manual and

computerized accounting methods, procedures and controls established to gather,
record, classify, analyze, summarize, interpret and present accurate and timely
financial data for management decisions.

In spite of this, there are policies for reporting on an organization performance and
current conditions. These policies increase the usefulness of report including their
reliability and comparability. The policy that makes up acceptable accounting
practices are determined by many individuals and groups and those policies are
referred to as generally accepted accounting principles (GAAP). Since accounting is a
service activity, these rules reflect our society’s needs and not only on those of
accountants. The financial accounting standard Board (FASB) is another body or
group that is seen as an independent group of seven full-time members with a large
staff. This body has issued six statements of accounting concepts which help in
guiding accounting standard setting. Many companies and organizations involve
themselves in setting accounting rules/policies. They include investors, government
agencies, politicians, unions, lenders and other business and non-business
organizations.

Furthermore, there are two major types of methods used in recording accounting
information, such methods are manual accounting system and software accounting
system or computerized accounting system.

Manual accounting system extends and includes the method of processing, recording,
journalizing transactions posting to the ledgers and preparing the financial statements
which provide decision makers with useful information in making decisions. These
decisions relate to the allocation and use of scarce economic resources such as money,
land, labour and capital. These manual accounting systems are wholly used for
preparing income tax returns, reports to managers, bills to customers and other forms
of providing accounting information.

In addition, with manual accounting system, accountants and managers usually

inspect the documents, journal ledgers and reports in the performance of testing and
verification. Transaction can be traced from source documents to journals, general
ledgers, printed report etc. Subsidiary ledgers can be posted and the total can be

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compared with control accounts. It is visually observed by the auditors or accountants

to determine whether proper books of accounts or is being followed.

Technology is a main part of our modern society and business practices. It also plays
a major important in accounting as it help in reducing the time, effort and cost of
record keeping while improving clerical accuracy. Technology has distinct the way
we store, process and summarize large masses of data which makes accounting free to
increase its field.

The origin of software could be dated back to early 1960s. Historically, emphasis in
computer industry was on programming and was seen as the biggest single problem in
the implementation of a computer system. Computer has the ability to add and
subtract, but frequently not to multiply or divide, the computer run with relatively
simple software routines.

However, this study tends to analyze the comparison between manual accounting and
computerized accounting which are the two types of accounting system used by
various organizations and companies.

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1.3 Computerised accounting system:

A computerised accounting system is an accounting information system that processes

the financial transactions and events as per Generally Accepted Accounting Principles
(GAAP) to produce reports as per user requirements. Every accounting system,
manual or computerised, has two aspects. First, it has to work under a set of well-
defined concepts called accounting principles. Another, that there is a user -defined
framework for maintenance of records and generation of reports.

In a computerised accounting system, the framework of storage and processing of

data is called operating environment that consists of hardware as well as software in
which the accounting system, works. The type of the accounting system used
determines the operating environment. Both hardware and software are
interdependent. The type of software determines the structure of the hardware.
Further, the selection of hardware is dependent upon various factors such as the
number of users, level of secrecy and the nature of various activities of functional
departments in an organisation.

Modern computerised accounting systems are based on the concept of database. A

database is implemented using a database management system, which is define by a
set of computer programmes (or software) that manage and organise data effectively
and provide access to the stored data by the application programmes. The accounting
database is well-organised with active interface that uses accounting application
programs and reporting system.

Every computerised accounting system has two basic requirements;

• Accounting Framework:

It consists a set of principles, coding and grouping structure of accounting.

• Operating Procedure:

It is a well-defined operating procedure blended suitably with the operating

environment of the organisation.

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The use of computers in any database-oriented application has four basic

requirements as mentioned below;

• Front-end Interface:

It is an interactive link or a dialog between the user and database-oriented software

through which the user communicates to the back-end database. For example, a
transaction relating to purchase of goods may be dealt with the accounting system
through a purchase voucher, which appears on the computer’s monitor of data entry
operator and when entered into the system is stored in the database. The same data
may be queried through reporting system say purchase analysis software programme.

• Back-end Database:

It is the data storage system that is hidden from the user and responds to the
requirement of the user to the extent the user is authorised to access.

• Data Processing:

It is a sequence of actions that are taken to transform the data into decision useful
information.

• Reporting System:

It is an integrated set of objects that constitute the report. The computerised

accounting is also one of the database-oriented applications wherein the transaction
data is stored in well-organised database. The user operates on such database using
the required and desired interface and also takes the desired reports by suitable
transformations of stored data into information. Therefore, the fundamentals of
computerised accounting.

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1.3.1 Advantages of Computerised Accounting System

Computerised accounting offers several advantages vis-a-vis manual accounting,

these are summarised as follows;

• Speed:

Accounting data is processed faster by using a computerised accounting system than it

is achieved through manual efforts. This is because computers require far less time
than human beings in performing a task.

• Accuracy:

The possibility of error is eliminated in a computerised accounting system because the

primary accounting data is entered once for all the subsequent usage and processes in
preparing the accounting reports. Normally, accounting errors in a manual accounting
system occur because of repeated posting of same set of original data by several times
while preparing different types of accounting reports.

• Reliability:

The computer system is well-adapted to performing repetitive operations. They are

immune to tiredness, boredom or fatigue. As a result, computers are highly reliable
compared to human beings. Since computerised accounting system relies heavily on
computers, they are relatively more reliable than manual accounting systems.

• Up-to-Date Information:

The accounting records, in a computerised accounting system are updated

automatically as and when accounting data is entered and stored. Therefore, latest
information pertaining to accounts get reflected when accounting reports are produced
and printed.

For example,

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when accounting data pertaining to a transaction regarding cash purchase of goods is
entered and stored, the cash account, purchase account and also the financial
statements (trading and profit and loss account) reflect the impact immediately

• Real Time User Interface:

Most of the automated accounting systems are inter-linked through a network of

computers. This facilitates the availability of information to various users at the same
time on a real time basis (that is spontaneously).

• Automated Document Production:

Most of the computerised accounting systems have standardised, user defined format
of accounting reports that are generated automatically. The accounting reports such as
Cash book, Trial balance, Statement of accounts are obtained just by click of a mouse
in a computerised accounting environment

1.3.2 Limitations of Computerised Accounting System

The main limitations emerge out of the environment in which the computerised
accounting system is made to operate.

These limitations are as given below;

• Cost of Training:

The sophisticated computerised accounting packages generally require specialised

staff personnel. As a result, a huge training costs are incurred to understand the use of
hardware and software on a continuous basis because newer types of hardware and
software are acquired to ensure efficient and effective use of computerised accounting
systems.

• Staff Opposition:

Whenever the accounting system is computerised, there is a significant degree of

resistance from the existing accounting staff, partly because of the fear that they shall

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be made redundant and largely because of the perception that they shall be less
important to the organisation.

• Disruption:

The accounting processes suffer a significant loss of work time when an organisation
switches over to the computerised accounting system. This is due to changes in the
working environment that requires accounting staff to adapt to new systems and
procedures.

• System Failure:

The danger of the system crashing due to hardware failures and the subsequent loss of
work is a serious limitation of computerised accounting system. However, providing
for back-up arrangements can obviate this limitation. Software damage and failure
may occur due to attacks by viruses. This is of particular relevance to accounting
systems that extensively use Internet facility for their online operations. No full proof
solutions are available as of now to tackle the menace of attacks on software by
viruses.

• Inability to Check Unanticipated Errors:

Since the computers lack capability to judge, they cannot detect unanticipated errors
as human beings commit. This is because the software to detect and check errors is a
set of programmes for known and anticipated errors.

• Breaches of Security:

Computer related crimes are difficult to detect as any alteration of data may go
unnoticed. The alteration of records in a manual accounting system is easily detected
by first sight. Fraud and embezzlement are usually committed on a computerised
accounting system by alteration of data or programmes. Hacking of passwords or user
rights may change the accounting records. This is achieved by tapping
telecommunications lines, wire-tapping or decoding of programmes. Also, the people

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responsible for tampering of data cannot be located which in a manual system is
relatively easier to detect.

• Ill-effects on Health:

The extensive use of computers systems may lead to development of various health
problems: bad backs, eyestrain, muscular pains, etc. This affects adversely the
working efficiency of accounting staff on one hand and increased medical expenditure
on such staff on the other.

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1.4 Manual Accounting System:

Manual accounting systems use physical records, pads of paper and books, onto
which transactions are entered by hand. Accounting pages have four or more printed
columns and multiple rows, natural divisions for the necessary information, such as
date, description and dollar amounts. Numerical entries typically have space for every
digit.

Journals and ledgers comprise the working and final copies of documents, often with
separate books for the various accounts. Cash sales could be one set, for example,
while payroll may be another. The results of these working documents are usually
combined in the company’s general ledger.

1.4.1 Advantages of Manual Accounting System

 Error Correction: Despite the convenience and market penetration of computer-

based accounting systems, manual accounting still offers several advantages that
make it a viable alternative. The first is error correction. Double-entry accounting,
attributed to Luca Pacioli, a 15th century Italian, provides a natural way to guard
against data entry errors and number transpositions. Every transaction gets entered
as a debit in one account, and a credit in another account. Trial balances compare
all debits and all credits. If these don’t match, an error is made somewhere in the
accounts.

 Data System Errors and File Corruption: Computer systems store data in ways
that aren’t commonly understood by many users. Opening the wrong file with old
data or encountering a data file with digital errors can ruin the validity of your

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current data. Manual systems use a single file, the ledger, for each account.
There’s no other version with similar data that may be confused.

 Always Accessible: Power or internet outages won’t prevent you from working
on accounts unless you’re thrown into complete darkness.

1.4.2 Limitations of Manual Accounting System

 Data Entry Errors: Double-entry accounting in a manual system is laborious,

since every transaction must be recorded by hand, twice. Many accounting
programs use a double-entry method, but second entry is created automatically.
While this won’t stop a wrong number from being entered, it does eliminate
discrepancies between the first and second entries.
 Potential Loss of Physical Copies: While digital data can be corrupted, effective
backups can protect data, including copies off-site, such as in cloud server storage.
Journals and ledgers, being physical books, are prone to loss. Theft or fire could
mean that all of a company’s accounting data is lost. Duplicating and storing the
general ledger off-site can be a time-consuming task, compared with many digital
storage options.
 Knowledge of Accounting Procedures: Unlike many commercial software
packages, manual accounting system aren’t optimized for ease of use, nor can you
expect client support or proprietary help. A bookkeeper or accountant will be
necessary to start up and maintain your manual accounting system.

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1.5 Comparison between Manual and Computerised Accounting:

Accounting, by definition, is the process of identifying, recording, classifying and

summarising financial transactions to produce the financial reports for their ultimate
analysis. Let us understand these activities in the context of manual and computerised
accounting system.

 Identifying:
The identification of transactions, based on application of accounting principles is
common to both manual and computerized accounting system.
 Recording:
The recording of financial transactions, in manual accounting system is through
books of original entries while the data content of such transactions is stored in a
well-designed accounting database in computerized accounting system.
 Classification:
In a manual accounting system, transactions recorded in the books of original
entry are further classified by posting into ledger accounts. This results in
transaction data duplicity. In computerized accounting, no such data duplication is
made to cause classification of transactions. In order to produce ledger accounts,
the stored transaction data is processed to appear as classified so that the same is
presented in the form of a report. Different forms of the same transaction data are
made available for being presented in various reports.
 Summarizing:
The transactions are summarized to produce trial balance in manual accounting
system by ascertaining the balances of various accounts. As a result, preparation

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of ledger accounts becomes a prerequisite for preparing the trial balance.
However, in computerized accounting, the originally stored transactions data are
processed to churn out the list of balances of various accounts to be finally shown
in the trial balance report. The generation of ledger accounts is not a necessary
condition for producing trial balance in a computerized accounting system.

 Adjusting Entries:
In a manual accounting system, these entries are made to adhere to the principle
of cost matching revenue. These entries are recorded to match the expenses of the
accounting period with the revenues generated by them. Some other adjusting
entries may be made as part of errors and rectification. However, in computerized
accounting, Journal vouchers are prepared and stored to follow the principle of
cost matching revenue, but there is nothing like passing adjusting entries for errors
and rectification, except for rectifying an error of principle by having recorded a
wrong voucher such as using payment voucher for a receipt transaction.
 Financial Statements: In a manual system of accounting, the preparation of
financial statements pre-supposes the availability of trial balance.

However, in computerised accounting, there is no such requirement. The generation

of financial statements is independent of producing the trial balance because such
statements can be prepared by direct processing of originally stored transaction data.

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1.6 Evolution Of Computerized Accounting And Manual Accounting

The historical aspect of accounting started with God when he says that every living
soul must give account of his/her life at the last day. Going with concept, it means that
the world we are in is a market place where we do buy and selling after which we give
account of the business we have transacted. So, you can understand that God ever
approves the word "Accounting”. Accounting is the first and important law made by
God which everybody must obey. The buying and selling business in this world are
our service to God laws.

From the above explanation, accounting can be referred to as the recording of

transactions in books of accounts (i.e., book-keeping) in line with double entry
principle which dated back to the 14th century when Italian merchants began to use
the double entry system to record their transactions. The earliest known double entry
records are the accounts of stewards of the commune of Genoa for the year 1340. An
Italian monk, Luca pacioli published the first known text on double entry accounting.
In his book summa di Arithmetica geometria proportioni et proportionality (meaning
everything about Arithmetic, Geometry and proportion published in 1494, he included
a section on double entry accounting entitled De compute’s scripture. This section
was later separately published in 1504 under the title in scuola perfetta dei mercanti,
which in English means the perfect school of merchants. The double entry system
quickly spread across Europe, particularly after the publication of Luca Pacioli's
summa. Due to its Italian origin, the system, in those days was known as the Italian
method.

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The European writer subsequently started to improve on his work by stating the
emergence of money as a medium of exchange has provided impulsion for the
development of accounting and book-keeping. Thus, it became necessary to record
business events on monetary aspect rather than on physical values. Furthermore, the
industrial revolution of 18th century which bought about ample growth in the world
trade and industry provided an important incitement to accounting and book-keeping.
The business has been continuous growth and expansion resulting in increased need
for information through proper records. Before this era, business that the need for
information was less required. The industrial revolution was in effect and the basis of
the modern business enterprises ranging from partnership to joint companies.

Therefore, business enterprises are thus described as a means or mobilization of funds

and human resources. This implies the principle of accountability which marks a step
further in the development of accounting and book-keeping. It is a

common practice nowadays that business enterprises, especially large ones who do
collect millions of naira obtained from thousands of people (i.e., investors and
lenders) and deploy them in operations extending throughout the country or even
beyond, for the ultimate purpose of profitability.

Thus, the result of successive innovations has its adaptations and modifications to the
changing of business environment. In fact, accounting has gone through many phases
of changes due to changing socio-economic environment. Like any other discipline, it
has been adjusting itself to changing requirements and will continue to do so in future
as well as to promote social welfare hence, enabling its users to form rational as sound
judgment and take appropriate decisions.

Computerized accounting system is a well-known hi-tech modern device used in

every walk of life in today's world. It is a vital tool in the field of information system
whatsoever it relates to management or accounting, engineering or technology,
medicine or surgery, arts or drawings, music or movies, finance or investment,
manufacturing or marketing, transportation or travelling, insurance or banking. It has,
hence become essential in every sphere of life.

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With the advent of industrial revolution, a wide spectrum of change has been brought
about and the business grew in size and complexity from the sole trading firms to the
global corporations and MNCS (multi-national corporations) firm single commodity
to hundreds or thousands of products and varieties in them from localized operations
to the globalized operation in the fields of production, finance, human resources and
marketing. Hence it is impossible to manage and account for these activities without
the help of any device, as large volumes of inter-related data emerge. It is, thus
through this computerized system that a full-fledged information system can be
designed which collects the required data, processes it with accurate, speed and
precision and finally gives the results for those reasons. The growth of management
theory and techniques, management accounting and its application theory in the
production and distribution,

changes in the organizational structure etc. has made it mandatory to switch over to
the computerized information system to win over the business competitors and rivals.

Computer system helps to analyze financial data from the past and forecast for the
future for arriving at appropriate and correct decisions. It not only calculates but also
projects trends in costs, prices, profitability analysis and product mix to meet the
financial information needs for the users of account information.

In 1968, Gary Dickson proposed a model of information system development, based

on the organization structure and its information needs. This was categorized into the
application system like clerical information, decision support and programmed system
which are discussed as follows:

Phase 1: Evolution of clerical system:

Accounting was the prime candidate for computerization in the early stages. The
accounting applications had well defined inputs, output and processing rules. The
computerized system replaced the manual system at this stage.

Phase 2: Evolution of information system:

This system provided the summarized data, which the managers converted into
information for control or decision making. Initially, the users played a minor role in

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the development of systems. A major concern was to determine how to give users a
longer role in all phases of development.

Phase 3: Evolution of decision support system:

Application system at this phase became interactive, user friendly manager machine
system. The decision situations were broadly classified into structured and
unstructured, on the basis of whether the procedure could be well defined or not, or
further flexibility could be provided in these systems or not. In case of structured
decisions, the system extends facilities to interact with the database and model base
for findings solutions.

Phase 4: Evolution of programmed system:

The development of information system at this level required an information system

manned at the top level in the organization. Programmed system, thus, involved
information systems manager as a member of the development group and assigned
him a productive role. This influenced the designing of the system and its
compatibility with the information requirements.

The above discussed stages elaborate on the evolution of the system and their
integration over a period of time to provide adequate database to generate the
accounting information in an acceptable and sophisticated standardized format, ready
for analysis.

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1.7 Stages In Evolution Of Accounting

The development of accounting can be divided into four periods. Such as the pre-
capitalist period 4000 BC -1000 HD, Commercial capitalist 1000-1750, industrial
capitalism 1750-1830 and the financial capitalism 1830-20th century.

THE PRE – CAPITALIST PERIOD 4000 BC – 1000 AD:

This period began with the Mesopotamian civilization and through Greek and Roman
times to the “Dark Ages” The need for record keeping initially stem from the
extensive trade which grew up within and outside the very fertile Mesopotamia
valley. There the only primitive form of record was mound record, where record was
initially expressed in terms of substantial quantities and later in financial terms.

THE COMMERCIAL CAPITALISM 1000 – 1750:

The essence of commercial capitalism which was also called mercantile capitalism is
that money was invested mainly in trade and when sold for cash, the proceeds will be
used to acquire more stock. During this period, little was invested in what may
broadly be described as fixed assets or productive equipment expects perhaps in the
shipping and mining industries.

THE INDUSRIAL CAPITALISM 1750-1830:

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There are factor that facilitated industrialization, the waste discovery of new energy
source was in the second half of the 19th century, the use of machine in
manufacturing and the development of factory system was made on abundance of
labour which was occasioned by the low infant mortality and cheap capital available
was in large quantities.

At present, there have been tremendous advancements in accounting to meet the

needs brought about by information technology.

FINANCIAL CAPITALIST 1830-2000:

This period between 1939 -1945, world war saw the most far-reaching changes in
accounting system and practice started during the world war. The primary important
was the growing recognition of ways in which accounting could contribute to
management decisions making.

Thus, this point has begun as an offshoot of stewardship reporting and controlling
some functions of mangers thereby assume major important role and accountant
professors were included and commerce all became much more closely involved as
members of management team.

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accounting system

1.8 Purpose Of Accounting Information

Accounting is referred to as the language of business. It is a medium of

communication information in which "communication" deals with identification.
Therefore, to say accounting is the language that it is the mode in which business
information is identified, processed, transmitted and received by the relevant parties
in business to enable different users make proper decision making.

The ultimate purpose of accounting is to act as a steward, which use its record to
report to the owners of the company i.e., the shareholder, on transactions made during
the period and the effect of these transactions on their investment. Thus, for this
purpose, the balance sheet which analyses the financial position of the business and
the profit and loss account which measures the success or failure of the company’s
operation are both important statements.

Furthermore, the purpose of accounting provides decision makers with information in

making informed economic decisions by planning future operations via the budget in
making decisions between alternatives in allocating scarce resources and in
controlling the business by reporting an event soon after they have taken place and
make comparison, with the budget or plan. Thus, the managers were charge with the
responsibility of directing the use of economic resources which will shape the world’s

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economics. Then, the resource allocation will determine the prices, wages and what
goods and services to be produced etc.

1.9 Classification And Storing Data In An Accounting Environment.

The two methods of classifying and storing data within an accounting system are
widely use as ledgers accounts and computerized accounting system.

1. Ledger Accounts

In both manual and computerized accounting system the effect of business transaction
is classified in terms of organization charts of accounts. The phase “chart of accounts”
refers to the number of titles of ledger accounts used by organization. In designing of
the ledger accounts of any business, question always arise as to the extents of details
needed in the chart of accounts.

2. Computerized Accounting System

In the realms of computerized accounting system, the fascinating interest of the

organizations, individuals and nations are to embrace the advancement in technology,
and providing a business with tool to compete in the fast-changing business
environment that encourages the firms and their decision makers to be well informed

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and empowered with the right information at the right time and in the right manner.
This has attributed and given rise to the need to design computerized accounting
systems. These systems are sophisticated, information and data, generate reports,
present them graphically and constantly update the data.

All these information is then made accessible to the decision-makers.

Accounting + computerized = Integrated computerized accounting system

The accounting and financial software are mostly found in the following areas such as
pay rolling system, inventing control, account receivable, account payable and general
ledger.

1.10 Accounting In The Manual System Environment.

Traditionally, organization has produced their business documents, kept their books
and prepared their accounts manually. This manual method involves operations
performed by a clerk assisted if desired by specific need such as pocket calculators or
adding machine etc. This method of processing is suitable in case where the volume
of data to be processed is small and there is not much emphasis on the specific period
of time the work must be completed. The process is simple and, in most cases, the
employment of more hands will solve the problem of time limitation.

However, this accounting system also involves processing the accounting transaction
through reading the information in the general journal and consequently posting the
same to the general ledger. It is the foundation of introducing accounting procedures
in organization that uses manual accounting system.

This should be actually noted before these entries are posted in the ledger account, be
it general or special ledger, there may be a considerable amount of detailed work in
order to provide the information which is the subject of these entries for example
before entering payments for wages and salaries, it is necessary to complete an

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invoicing system of the amount payable by using payroll system. All sales and
purchases transaction affect stock, which must be recorded in a system record.

1.11 The Nature Of Integrated Accounting Software System

An integrated software accounting system is the suite of interrelated programs which

often in modular form. Each module is designed to run on its own or as part of the
system. Therefore, an integrated accounting system streamline the accounting routines
for allowing the transfer of common information data relating to business transaction
from one application module to another which is either directly or through a batch
file. Normally this relates to the transfer of transaction details from sales and
purchases module to the normal ledger. Most financial accounting and book keeping
programs are purchased off-the-shelf and then developed in house, often by the
accountants working, in the case of ledger system with their organization IT
departments.

These are most commonly used software accounting system includes:

1) Account receivable

2) Bills of materials

3) Account payable

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4) Payroll

5) Purchasing

6) Inventory control

7) Cash manager

8) General ledger

While most commonly used integrated software system includes:

1) Peach tree accounting system

2) Quick book and quick play

3) Financial projection

4) Sage sterling

5) DAC accounting

6) Tetra accounting system

7) Pacioli 2000

8) Oracle accounting system

9) Excel accounting system

10) Act plus

11) Solomon in accounting system

12) Bank and cash manager

13) DAC easy

14) Lotus 1-2-3 system

15) MYOB [Mind your own business] accounting plus

16) Profit point

17) Money count

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18) Money 200 business and personal

19) Sun system accounting system

20) Quick book 2000

Peach Tree For Windows Accounting System

The peach tree in accounting system for window system manages integrated modules
that are tailored to work the way you do. The peach tree program aims to increase
productivity by allowing you to manage your business records in the most cost and
time efficient manner possible.

Peach tree accounting software offers the consumer all forms of accounting services.
Not only does the software provide general ledger, book-keeping, account payable,
account receivable, payroll, inventory, crystal report, financial statement and job
costing can all be performed within the program.

1.12 Checklist For Selecting Accounting Software Packages

 What computer and operating system is the software designed for?

 Can the package be integrated with software from their supplies?
 Does the software have a reliable history of use in similar type of business?

1.13 Application And Basic Requirement Of Software Accounting

System.

There are numerous ways in which computerized accounting system can be helpful to
accounting systems.

Utility in record keeping: The computerize systems maintain proper accounting

records of each transaction and finally provide the financial statements. These are the
source of information for the past, present and the future. The records contribute a lot
in the decision making.

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Utility in batch processing: A set of identical tasks such as calculating the pay for
each employee run through the computer in a batch. This mode of operation is known
as batch processing. However, there is a limitation in this. The programs carrying out
the processes tend to be very inflexible. The accounting data is stored in a way that
suits the accounting programs, making it difficult to access for any other kind of
analysis. There is no way in which accounting reports could be created promptly "on
demand".

Utility in online/interactive processing: Online processing overcomes the draw backs

of batch processing. This style of working is practices mostly nowadays, since it is
used everywhere from a PC package to main frame-based services users are able to
interact directly with the computer, which is very user friendly.

Utility in wage/payroll system: It is used for accounting purposes in financial

management. Its goal is to control personnel's cost, timely disbursement of
wages/salary and structuring the salary. Various documents which serve this function
are as follows:

a) Personnel application form

b) Appointment letter

c) Attendance and leave record

d) Wages/salary agreement

e) Data on wage/salary structure

f) Statement of loans, advances and deductions

The reports generated are in the form of salary register, provident fund, ESI reports,
ledger and returns, income tax form, statement of TDS (Tax deducted at Source) etc.

Most of these reports are used by professionals in the financial and operational
management.

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Improved reporting system: Having recorded the accounting transactions in an
electronic form, the production of reports becomes a matter of running some
appropriate software’s to turn data into a summarized form and tables or standardized
balance sheet and profit and loss statements. No longer does the staff need to extract
information directly from the ledger entries. This saves a lot of time and reduces error
of calculation and transcription. Most accounting software provides facilities for
generating period end and year end reports and produce 'trial balance'.

Once accounting software becomes firmly established in the organization final befit
can be achieved from having data for successive years or periods in an electronic
form. This makes it possible to look at how key financial indicators have change with
time and to predict what will happen if particular trends continue.

The essential requirement of this system includes:

 An organized data processing system is also required to provide effective

information.
 Feedback is an essential requirement in order to provide for any modification
required.
 Online interrogation facilities are necessary for obtaining information on demand.

1.14 EFFECT OF SOFTWARE ACCOUNTING SYSTEM ON

CUSTOMERS

1) Customers may not have the patient to wait for manual updating of account.

2) Time waste.

3) Customers may not obtain the required information at the appropriate time for
investment purpose.

4) Data only entry maybe in accurately made on customer’s account.

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1.15 EFFECT OF SOFTWARE ACCOUNTING SYSTEM ON
ORGANIZATION PERFORMANCE

1) Inconsistency in reprinting system as reports maybe provided with updating.

2) Lack of time of information may make an organization to take wrong decision

on stock valuation.

3) Poor quality of service maybe provided as entries may contain cancellation

distortion or roughly presented

4) Consequently, customer’s part may decline and this may lead poor profit
report of the organization.

1.16 OBJECTIVES

The main objective of this study is a comparative analysis of computerized accounting

system and manual accounting system.

The study aims at ascertaining the following objectives:

 To evaluate whether frauds and forgeries are encouraging in computerized

accounting system i.e., software accounting system than the manual accounting
system.
 To examine whether software accounting system can handle large volume of data
than the manual accounting system.

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 To study whether the use of software accounting system increases effectiveness
and efficiency in organizations or companies than manual accounting system in
reducing the amount of funds lost through frauds and forgeries.
 To examine whether software computerized accounting system is capable of
storing, retrieving, analyzing, processing, summarizing and reporting rapidly than
manual accounting system.
 To show the operational and reporting system in both the manual accounting
system and computerized accounting system.

1.17 RESEARCH QUESTION

The course of this research has picked up some interesting enquires and discussions
which centered more on a comparative analysis of computerized accounting system
and manual accounting system in various Sectors and Industries.

The following questions are put forward for the purpose of the study:

 What are the measures taken to ascertain the extent to which fraud and forgery can
be prevented and controlled using either of the accounting system?

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 Can computerized accounting system handle large volume of data more than the
manual accounting system?
 How effective and efficient is the use of computerized accounting system or
manual accounting system?

1.18 RESEARCH HYPOTHESES

Here the following hypotheses were formulated, tested and validated in the study.

Hypothesis One

H0: frauds and forgeries are not encouraged with the use of computerized accounting

system than manual accounting system.

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H1: frauds and forgeries are encouraged with the use of computerized accounting
system than manual accounting system.

Hypothesis Two

H0: computerized accounting system is not able to handle large volume of data than
the manual accounting system.

H1: computerized accounting system is able to handle large volume data than the
manual accounting system.

Hypothesis Three

H0: Manual accounting system is not effective and efficient than the computerized
accounting system in reducing the amount of funds lost frauds and forgeries.

H1: Manual accounting system is more effective and efficient than the computerized
accounting system in reducing the amount of fund lost through frauds and forgeries.

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Chapter 2: Review of literature

This study assesses the comparative analysis of computerized accounting system and
manual accounting system of quoted Microfinance Banks in Nigeria from 2006-2015.
Three hypotheses were formulated in line with objectives of the study. Ex-post facto
research design was adopted and the data for the study were obtained from fact books,
annual reports and account of the quoted Microfinance banks under study. Paired
sample T- test was used to test the Hypotheses, at 5% significant level with aid of
SPSS version 22 statistical software. Findings showed that computerized accounting
system has a positive effect on the reported profitability of banks more than manual
system of accounting. Based on these findings, the study recommends among others
that Microfinance banks should implement computerized accounting system than the
manual accounting system because it has more positive effect on the profitability level
of the banks. (Amahalu Nestor, 2017)

The objective of this paper is to investigate the significant perceived security threats
of computerized accounting information systems (CAIS) in Saudi organizations. An
empirical survey using a self-administered questionnaire has been carried out to
achieve this objective. The survey results revealed that almost half of the responded
Saudi organizations have suffered financial losses due to internal and external CAIS
security breaches. The statistical results also revealed that accidental and intentional
entry of bad data; accidental destruction of data by employees; employees’ sharing of
passwords; introduction of computer viruses to CAIS; suppression and destruction of
output; unauthorized document visibility; and directing prints and distributed
information to people who are not entitled to receive are the most significant
perceived security threats to CAIS in Saudi organizations. Accordingly, it is
recommended to strengthen the security controls over the above weaken security
areas and to enhance the awareness of CAIS security issues among Saudi
organizations to achieve better protection to their CAIS. (Ahmad A, 2005)

Accounting computerization to improve the efficiency and quality of accounting

work, promote the accounting work standardization, has paved the way for the
modernization and information of accounting management. In this paper out research

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the development of accounting computerization systems difficult problem. First of all,
the design by the "Budget management module, Contract management module,
Rights management module, Inventory accounting module, Salary management
module, the Accounts payable module, the Accounts receivable module, accounting
processing module, Report management module, Fixed assets module, Cost
management module and Financial analysis module" is composed of software
function; Then, design the schedule by the Security control centre "Security assurance
platform and Security monitoring platform" common Security control mechanism.
The research achievements of this paper can solve the problem of key software
development technology, improve the quality of the accounting computerization
software plays an important role and promote the accounting computerization
software applications. (Tiesong Qiao, 2016)

The study aims to identify the role of accounting information systems applied in
measuring costs and pricing of industrial products, and learn about the impact of the
role of the successful pricing strategies employed in Jordanian Industrial
Corporations. This study shows the impact of accounting systems in Jordanian
industrial companies over pricing mechanisms and strategies of industrial products
and measuring production costs which, in addition to identifying the most important
benefits information from use of these systems, and to take the right decisions in
industrial product pricing to win highly competitive industrial companies and enable
them to ascend and achieve higher profitability. this study defined that The
accounting system helps determine the cost of inventory by linking the procurement
system with the accounting system to give the average cost in addition to the purchase
price at the beginning of the year and the end of the purchase price of this helps to
compare the increase in purchase prices , Pricing of industrial products in industrial
companies through accounting information systems preclude an extra cost ,and Many
industrial companies on accounting information systems in pricing their products
heavily industrial. (Dr. Atallah Ahmad Alhosban, 2014)

Information communications technology on computerized accounting systems was

intended to be effectively utilized in local governments to bring impact on accounting
and organizational performance in LGA`s. This study aimed at assessing the impact
of computerized accounting system usage on organization performance in Zambia
with special focus in local government authorities (LGA`s) Lusaka province. The

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study used mainly primary data from 30 respondents selected using purposive
sampling techniques. This study employed descriptive analysis. All respondents
surveyed in the LGAs use Computerized Accounting System. It was found that about
43% reported that computerized accounting system requires training to staff which is
a challenge, the reason might be due to lack of time to undertake training and the
costs that come with the training. About 27% indicated that computerized accounting
system caused loss of data, 20% are challenged the additional costs, and about 10%
reported that it resulted into wrong data entry. The Researcher asked if there are any
measures taken to solve these challenges. The results indicated, about 62% of
respondent reported organization is taking measures to overcome these challenges.
About 82% claim that simplification of CAS will improve organization performance.
(Elizabeth Smith, 2016)

This research study focuses on the use of computerized accounting systems by SMEs
as opposed to manual accounting systems in Ghana. A systematic sampling method
was used to select the sample of two hundred SMEs. This survey was restricted to two
hundred SMEs in Ashanti Region, out of which seventy-five of them responded. The
sampling was done as follows: small and medium scale enterprises using
computerized accounting system and small and medium scale companies using
manual accounting system.

This research focuses on areas that are very important in Computerized Accounting
System. These areas include; impact of computerized accounting on quality of
service, the major benefits derived from using computerized accounting system, how
the system help organization in reducing cost of operation, major factors considered
by certain SMEs when choosing accounting software packages and performance of
the computerized accounting system. The research concluded the impact of
computerized accounting on quality of service has enhanced activities which increase
productivity, efficiency and overall effectiveness in order to achieve higher
performance in the organizations to reduce their cost of operating. Recommendations
were that businesses should which do not use the system should adopt the system
because of the tremendous impact it has on the businesses. Also, businesses which are
already using the system should liaise with the government to provide training and
workshops to employees in order to upgrade their skills. (Benjamin Owusu Appiah,
2015)

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The research topic of this study is “The Effect of Computerized Accounting System
on Ghanaian banks – a case study of the Ga rural bank. The purpose is to know
whether the application of Computerized Accounting System supersedes that of
manual Accounting System and that if computerized Accounting System enhances
higher turnover and profitability, and also whether a computerized accounting system
is an effective means of keeping accounting records. The study's population is 70
persons who are the members of staffs of the three (3) selected branches of the Ga
rural bank. Using the Taro Yamane‟s formula the sample size calculated gave (60).
The formulated hypotheses were tested using the analysis of variance (ANOVA)
statistical technique at 5% level of significance. The researcher also made use of
primary methods of data collection which included questionnaire and personal
interview. Also, the secondary method of data collection used was gotten from official
documents of the banks, websites, various research works on computerized
accounting system, accounting journals and textbooks.

The research concluded that the advantages of a Computerized Accounting System far
outweigh its associated challenges as it has impacted the financial reporting of the
banks positively. Hence, there is the need for businesses, particularly rural banks to
adopt a Computerized Accounting System.

Based on these, the researcher recommended that the Ga rural bank should channel
most of their resources in the training and development of bankers and Accountant’s
personnel in computerized accounting system related technology such as I.C.T to
boost performance in their banking operations and their personnel. Also due to the
widespread of computer trends and its dynamics nature, it is recommended that rural
banks who are still battling with manual system should adopt specifically the
Computerized Accounting System. (Emmanuel Opoku, 2015)

The study aims to determine the level of performance of small and medium enterprise
businesses in using accounting system. This study utilized descriptive or survey
research design through distributing an adopted questionnaire among the 128
respondents. The study’s results revealed that most SME's have been using their
accounting system for six to ten years. Likewise, with the use of a computerized
accounting system, the respondents tend to finish their jobs effectively and at the
same time enhance their quality and quantity of work. Meanwhile, in utilizing the

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manual accounting system, the respondents claimed that though they are also able to
finish their job accurately, establishing a computerized accounting system is still more
convenient. The main problem encountered by the manual accounting system users is
that it is time consuming. (Clark Kent Arcega, 2015)

Enterprise Resource Planning (ERP) systems is a software for business

administration, using information technology to manage all the resources of the
enterprise (human resources, manufacturing resources, ....) on a unified database. ERP
is considered as an optimal solution to help businesses improve their competitiveness.
In the ERP system, the accounting information system is considered the core part.
Accounting information system must be one of the priorities when applying ERP
systems to have a positive impact on business performance. This article conducts an
overview of the effects of ERP systems on the accounting information system
including input information, output information, processing activities, storage, and
internal control. The article gives recommendations for business managers as well as
accountants to actively participate in ERP systems for sustainable development.
(Nguyen Huu Anh, 2020)

This study aimed to develop a standard measurement tool for the effective assessment
of computerized accounting systems (CAS) quality and effectiveness based on
systems theory, in terms of their structural characteristics or functional components.
The researcher identified five structural characteristics (components or subsystems) of
CAS, namely internal controls, automated data-processing, relational database,
automated reporting, and enhancing technologies components. The operationalization
of these structural characteristics resulted in a 25-item index that forms the
measurement tool developed. The 25-item index was constructed based on the review
of prior literature to ensure content validity. The CAS measurement tool was
administered to 384 active members of the Institute of Chartered Accountants of
Nigeria (ICAN) through an online survey, and 234 useful responses were collected
and analyzed to test the validity and reliability of the measurement tool. The
researcher assessed the construct validity of the CAS measurement developed using
the exploratory factor analysis, and the internal and external reliability using the
Cronbach’s alpha test of consistency and test-retest statistics, respectively. The results
of the study suggest that the CAS measurement tool developed has strong content and
construct validity as well as high internal and external reliability. It is, therefore,

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believed that the tool would yield valid and reliable results when employed in the
assessment of computerized accounting systems.

The study is significant as it introduces a new approach to assessing the quality of

accounting information systems in terms of their structural characteristics instead of
qualitative characteristics such as perceived advantages and ease-of-use of the
systems. Further research is suggested to confirm the validity and reliability of the
CAS measurement tool presented in this study. (Akamanwam Effiong, 2020)

The main purpose of this study was to explore the impact of computerized accounting
system in financial control, a case study of Musoma Municipal Council. The focus
was on the accounting/ finance department.

Primary data was used, including questionnaires and interviews. The targeted
population included the accounting staffs, head of departments and staff of internal
audit unit. The unity of inquiry specifically consisted of District Executive Director
(DED), District Treasurer (DT), District Internal Auditor (DIA), District Planning
Officer (DPLO), District Education Officer (DEO), District Medical Officer (DMO),
District Human Resources Officer (DHRO) and accounts staff who used the system.
The selection of the unit was based on the fact that the identified persons were the key
players in performing and evaluating accounting system. The data obtained through
interviews was held constant as control variables.

The data collected through questionnaire was processed, analysed and presented in the
form of charts and tables using a computerized data processing program SPSS 20.
After a thorough data analysis conclusion was then drawn, that details that the
computerized accounting system has an impact on financial control.
Recommendations were then made that there should be a system administrator so as
to monitor and restricts the unauthorized personnel from accessing the system. (Nsia
Yesaya Munisi, 2013)

Computerized Accounting System (CAS) plays a prominent role in providing

information accurately and quickly to meet the challenges of the ever-changing
business environment. Developing countries, however, struggle and are reluctant
towards adopting CAS in SMEs. In Sri Lanka whereas an emerging economy is
existing, a few studies have attempted to study the reticence of adopting CAS in SME
sector. SME sector is vital in developing economy as it generates employment,

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promotes the growth of Gross Domestic Product (GDP) and stimulates other
economic activities. Even though SMEs engender many benefits, their persistence is
threatened and need strategies to overwhelm the challenges in the competitive
business environment in emerging economies. In line with the previous studies
focused on the technological revolution and SMEs in developing countries, research
findings reveal that SMEs have a poor accounting system and slower in using new
technology. According to them, one key strategy is accountability via sound reporting
practices. The study, therefore, examines the factors which affect to the adoption of
CAS in SMEs in Sri Lanka. According to the literature, the various factors were
identified and broadly classified under different categories. In this study, four factors
are included in the research model as managers’ support, perceived usefulness, ability
of bearing the cost and human resource proficiency. This study was conducted
through the structured questionnaire survey method. Data was collected from 118
SMEs representing manufacturing, trading and services sectors in Matara District, Sri
Lanka. The study used Partial Least Squares (PLS) path modelling to analyze the
collected data. The study results disclosed that manager’s support and firm’s ability of
bearing the cost have a positive and statistically significant relationship with adoption
of CAS in SMEs. As per survey results, it has confirmed that there is a positive
relationship between perceived usefulness and HR proficiency on adoption of CAS
but it is not statistically significant. (G.A.N. Darshi, 2020)

The study is aimed at determining the effects of computerized accounting systems

(CAS) on the effectiveness and efficiency of internal audit. The study was conducted
at Zanko bank and initially based on a sample size of 35 employees. However, only
30 managed to respond to the questionnaires as the others were not available. The
researcher used stratified sampling and later random sampling to ensure equal chances
of selection of all the respondents. The study used correlation coefficient tests and
descriptive statistics to analyse the findings while paired sample t-tests were used to
determine the validity of the formulated hypothesis. The results showed that CAS
contributed to the effectiveness and efficiency of the audit to a moderate extent
through making the processing of transactions faster and minimizing errors. The
findings also revealed that audit effectiveness has a significant impact on the auditing
process and that audit efficiency, significant and other CAS problems do not have
significant impacts on the auditing process. Contributions from CAS were discovered

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to be negatively correlated with audit effectiveness and significant problems but
positively correlated with audit efficiency and other CAS problems. (Bayar Ali
Ismael, 2020)

Small business owners with unsuccessful strategies of implementing computerized

accounting systems may face a negative impact with their business sustainability and
their business financial performance. Small businesses support the majority of the
workforce in the United States, but 50% of small businesses fail within five years, and
only 30% may survive long term. The beauty salon owners selected, successfully
implemented a computerized accounting system to overcome the challenges of
financial loss. Grounded in Davis’s technology acceptance theory, the purpose of this
qualitative multiple case study was to investigate strategies small business beauty
salon owners in Baltimore used to adopt computerized accounting systems to sustain
their businesses beyond five years. Data were collected from semi structured
interviews and company documents from six beauty salon owners in Baltimore who
successfully adopted a computerized accounting system in their business. Thematic
analysis was used to analyze the data. Four themes emerged: business growth,
accounting systems operations, managing finance using an effective accounting
system, and computer education and knowledge. A key recommendation is for beauty
salon owners to immediately seek outside financial advisors to set their business up
with computerized accounting systems. The implications for positive social change
include the potential for small business owners to improve financial stability and
increase growth, leading to employment in the local community and economic
sustainability while providing business mentors for future entrepreneurs. (Yonwanda
D, 2020)

In an increasingly rapid world with technology and a borderless world, all companies
need to adapt to the latest technology. Technology is made as one of the strategies to
be competitive in the industry. One of the things to keep in mind is to use a
computerized accounting system to ensure that reports are issued accurately, quickly
and according to the established standards. Objective of this paper is to review the
usage factors on Computerised Accounting Systems (CAS) among SME in Malaysia.
The main purpose is to study the reason why SME refuse to use the CAS despite all of
the benefit. The factors that been reviewed includes cost, selection and size of the
business. The theory of Acceptance and Use of Technology (UTAUT) model factors

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through the concepts of perceived ease of use and perceived usefulness were also
been reviewed. The review found that perceive ease of use, perceived usefulness, cost,
selection and size of the business itself are among the factors that influence the SME
decision in engaging CAS. (Najihah Jusoh, 2018)

The ongoing advancement of information technology has affected accounting

information systems; PCs become smaller, quicker, simpler to utilize and more
affordable prompting the computerization of accounting information systems. This
research is therefore designed to examined the impact of computerized accounting
systems on quality financial reports of banks in Ghana. The instrument of data
collection was the survey method. The study population comprised of all banks listed
on the Ghana Stock Exchange. The quantitative research approach was adopted for
the study and data processed using Statistical Package for Social Sciences (SPSS)
programming version 21. Findings from the study discovered that taking all other
autonomous factors at zero, a unit increment in automated computerized accounting
system will bring about 0.50 increment in the quality of financial reports of banks.
The implication of this study is that, for banks to have quality financial reports efforts
must be made to invest in computerized accountings systems so as to improve the
speed, practicality, accuracy and relevance of the financial reports of their operations.
(Simon Akumbo, 2020)

Under the modern enterprise system, the popularization of accounting

computerization has a more and more important impact on traditional accounting and
modern financial management. Based on the previous literature, this paper aims to
explore the influence of accounting computerization on traditional accounting. On the
basis of clarifying the concept and characteristics of accounting computerization,
through questionnaire survey, literature analysis and other methods, survey the views
of employees of all ages on accounting computerization and some Suggestions.
Through the observation of the research results, further found that older accounting
personnel more identity and role of the influence of accounting computerization, and
think that the accounting computerization in information processing process and
improve the work efficiency has a greater impact, and for the future development of
accounting computerization, more should from perfect personnel structure aspects.
The study of this paper has a certain significance, through the analysis of the impact
of accounting computerization on traditional accounting, the financial management of

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modern enterprises put forward some Suggestions, enterprises should actively
improve the accounting computerization of the relevant system and establish a team
of professional talents. At the same time, accounting practitioners should strive to
improve their professional knowledge to improve their competitiveness. (Ying Liu,
2020)

The study is aimed at determining the effects of computerized accounting systems

(CAS) on the effectiveness and efficiency of internal audit. The study was conducted
at Zanko bank and initially based on a sample size of 35 employees. However, only
30 managed to respond to the questionnaires as the others were not available.

The researcher used stratified sampling and later random sampling to ensure equal
chances of selection of all the respondents. The study used correlation coefficient tests
and descriptive statistics to analyse the findings while paired sample t-tests were used
to determine the validity of the formulated hypothesis. The results showed that CAS
contributed to the effectiveness and efficiency of audit to a moderate extent through
making the processing of transactions faster and minimizing errors. The findings also
revealed that audit effectiveness has a significant impact on the auditing process and
that audit efficiency, significant and other CAS problems do not have significant
impacts on the auditing process. Contributions from CAS were discovered to be
negatively correlated with audit effectiveness and significant problems but positively
correlated with audit efficiency and other CAS problems. (Bayar Gardi, 2018)

During the past few years, there has been a declining trend on the performance of
Indonesian supply chain companies. The performance of the Indonesian supply chain
companies is relatively low compared with other countries such as Malaysia,
Thailand, and Singapore. To address this issue, the primary objective of this study is
to examine the role of computerized accounting system (CAS) in supply chain
accuracy. A survey was conducted to collect the necessary data from the managerial
staff of supply chain companies in Indonesia. PLS-SEM was implemented to analyze
the data. The results indicate that CAS had a significant positive relationship with
supply chain accuracy. Computerized accounting system supports supply chain
operations, which increases the accuracy of the supply chain system. Computerized

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accounting system also provides the ease of use and usefulness, which enhances the
supply chain activities and decreases various issues. Therefore, the computerized
accounting system is the key to gain accuracy in the supply chain. (Waluyo, 2018)

Chapter 3: Research Design

3.1 Statement of The Problem

In recent times, most companies and organizations have been using the manual form
of operations in their accounting systems. Primarily, this manual accounting systems
used to meet the organizational information requirement but this has been on
consistent failure in recent times as a result of growth and diversification of business
and technological advancement complexities in information technology to meet the
current business demands.

Thus, companies and organizations had usually been faced with a number of problems
in the use of this manual accounting system which involve lack of ability to handle
sufficient volume of data in terms of speed and accuracy, insufficient data storage and
retrieval system often resulting in loss of vital records, incorporating final updates,
rampant report of frauds and forgeries in the use of the system, unseemliness of
information which implies that information needed for effective decision making .
This is repeatedly, as a result of poor retrieval and inability to collect large volume of
data within the required time. All these problems include consequence in great loss of
scarce resources and impeded organization growth, steadiness and advancement.

Hence, in attendance to affect these problems related with the manual accounting
system and substitute it with the development of an integrated accounting software
system where financial and non-financial accounting transaction is recorded,
analyzed, retrieved, reported, interpreted, summarized and processed.

3.2 Scope of The Study

The coverage of this study is limited to the study of a comparative analysis of

software accounting system and manual accounting system of which particular

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attention is given using different sectors and Industries in all over the country as
study. Which includes; Educational institutes, Manufacturing and service industries
etc.

3.3 Objective of The Study

The main objective of this study is a comparative analysis of computerized accounting

system and manual accounting system.

The study aims at ascertaining the following objectives:

 To evaluate whether frauds and forgeries are encouraging in computerized

accounting system i.e., software accounting system than the manual accounting
system.
 To examine whether software accounting system can handle large volume of
data than the manual accounting system.
 To study whether the use of software accounting system increases
effectiveness and efficiency in organizations or companies than manual accounting
system in reducing the amount of funds lost through frauds and forgeries.
 To examine whether software computerized accounting system is capable of
storing, retrieving, analyzing, processing, summarizing and reporting rapidly than
manual accounting system.

3.4 Research Question

The course of this research has picked up some interesting enquires and discussions
which centered more on a comparative analysis of computerized accounting system
and manual accounting system in various Sectors and Industries.

The following questions are put forward for the purpose of the study:

 Is manual accounting system, the most commonly used accounting

information techniques in the industry for management decision – making?

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 Are there funds lost through frauds and forgeries when organizations use
software accounting system?
 Do you think that the use of software accounting system is more proficient,
accurate and pleasurable than manual accounting system?
 As an accountant or manager does the use of manual accounting system create
any special problems?

 As an accountant or manager does the use of software accounting system

create any special problems?
 Does it take more financial resources to run a software system than manual
accounting system?
 Does your organization encounter frauds and forgeries when using software
than the manual accounting system?
 Does the software accounting system increase effectiveness and efficiency in
your organization than manual accounting system?
 Are frauds and forgeries encouraged with the use of software accounting
system than with manual accounting system?
 Has there been any increase in the quality of work done since the use of
software accounting system?
 Does the software accounting system handle large volume of data than the
manual accounting system?
 Is software accounting system capable of storing retrieving, analyzing,
processing, summarizing and reporting promptly than manual accounting system?
 Is manual accounting system more effective and efficiently in reducing total
amounts of funds lost through frauds and forgeries than software accounting system?
 What are the measures taken to ascertain the extent to which fraud and forgery
can be prevented and controlled using either of the accounting system?
 Can computerized accounting system handle large volume of data more than
the manual accounting system?

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3.4.1 Research Hypotheses

Here the following hypotheses were formulated, tested and validated in the study.

Hypothesis One,

H0: frauds and forgeries are not encouraged with the use of computerized accounting
system than manual accounting system.

H1: frauds and forgeries are encouraged with the use of computerized accounting
system than manual accounting system.

Hypothesis Two,

H0: computerized accounting system is not able to handle large volume of data than
the manual accounting system.

H1: computerized accounting system is able to handle large volume data than the
manual accounting system.

Hypothesis Three,

H0: Manual accounting system is not effective and efficient than the computerized
accounting system in reducing the amount of funds lost frauds and forgeries.

H1: Manual accounting system is more effective and efficient than the computerized
accounting system in reducing the amount of fund lost through frauds and forgeries.

Hypothesis Four,

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H0: Software accounting system can provide quick report of forgeries in an
organization more than the manual accounting system.

H1: Software accounting system cannot provide quick report of forgeries in an

organization more than the manual accounting system.

3.5 Research Methodology

3.5.1 Sampling Plan

The design of a research work is basic plan that guides the data collection and
analysis phases of the research work. Hence, the research design is the framework
which specifies the type of information to be collection, the source of data and the
data collection procedures. The two approaches to research design are the case study
and the survey method.

Here the study focuses on a comparative analysis of software accounting system and
manual accounting system with the aim to show the operational and reporting system
in both computerized accounting system and manual accounting system.

3.5.2 Tools For Data Collection

The researcher carried out a statistical analysis by collecting the necessary data and
also extracting data from already existing literature on the subject matter of the study
which is from the main source of the data. The data collected in this work are made up
of both primary and secondary data.

 Primary Data

This can be done through personal interviews, administrating of questionnaire to the

people on observation. The data collected by the researcher is the direct information
decides by the researcher form employees of the two selected companies. For the

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purpose of this research work, questionnaires were distributed to employees of the
two selected companies to be filled for relevant information needed for the research.

 Secondary Source of Data

The secondary source of data entails information gotten by the researcher from
already existing materials that are related to this topic of study. Hence, the secondary
data for this study was obtained by the researcher from published and unpublished
texts, journals magazines, and gazette of the existing document.

3.5.3 Area Of The Study

This study or research work covers a comparative analysis of software and manual
accounting system. All research work was carried out in two companies to be more
precise: Nigeria Breweries Plc. and African Petroleum Plc. all in Enugu state.

3.5.4 Plans And Techniques Of Data Analysis

Data obtained were analyzed using percentage and simple statement as referred to the
information collected from respondents through research questionnaire delivered as
represented in a tabular form.

A four scale was used to award point to each specific questions responded by the
respondents. The favourable points are scored as follows:

 Strongly Agreed (SA)

 Agreed (A)
 Disagreed (D)
 Strongly disagreed (SD)

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3.6 Operational Definitions Of The Concepts / Terms

System: It is an interrelated or interacting element organized into a complex whole. A

system is a group of interrelated components working together towards a common
goal by accepting inputs and producing outputs in an organized transformation
process.

Software: It is a general term for the various kinds of programs used to operate
computers and related devices. Software is the programs and symbolic languages that
control the function of the hardware.

Manual Accounting System: These are those system in which source document are
posted by hands which extends and includes method of processing, recording,
journalizing transactions posting to the ledgers, sales, cash receipt and other type of
journals.

Accounting System: It is an organized set of manual and computerized accounting

methods, procedures and controls established to gather, record, classify, analyze,
summarize, interpret and present accurate and timely financial data for management
decisions.

Accounting: It is a system for recording; classifying, measuring, interpreting

financial data for an organization to enable users make assessment and decision
making.

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Computerized Accounting: It is what businesses used to track their financial
information.

Computerized Accounting System: It is a system used by business for recording

their financial information. Every time a transaction happens, an entry is made into
the system.

3.7 Limitation Of The Study

During the course of this study, a lot of problems prompted up. The main limitation of
this research work is time factor. The limited time which used in completing the
study. This also created a room for other problems and made data collection a difficult
task.

The problem of finance cannot be ruled out any research work of this entails typing,
photocopying, transportation etc. The unavailability of material with which to work
with constituted the limitation of the research work.

The study is however limited to these following financial areas: Such as general
ledger, account payable, account receivable, purchasing, inventory control and cash
resources. The research will also provide overall information on computerized such as
peach tree accounting system for windows implementation procedures involved.

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3.5 Chapter Scheme

Chapter-1 Introduction.

It deals with industrial profile, introduction to Computerized Accounting and Manual

Accounting System.

Chapter-2 Research Design and methodology,

It deals with the statement of problems, objectives, scope, and title of the study,
methodology, sampling size and limitation of the study.

Chapter-3 Company profile It deals with the profile of the organization

Chapter-4 Analysis and interpretation of data.

It deals with/covers analysis and interpretation of the data collected question.

Chapter-5 Summary of findings and conclusion.

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This chapter includes findings and conclusions on information collected.

Chapter-6 Suggestions and Recommendation.

Chapter-7 Bibliography

Chapter-8 Annexure

Chapter 4: Companies Profile

4.1 Nigeria Breweries Plc

Nigerian Breweries Plc, the pioneer and largest brewing Company in Nigeria was
incorporated in 1946 as "Nigerian Brewery Limited". In June 1949, the Company
recorded a landmark when the first bottle of STAR lager beer rolled out of its Lagos
Brewery bottling lines.

In 1957, the company commissioned its second brewery in Aba and the name became
"Nigerian Breweries Limited". This was followed by Kaduna Brewery in 1963 and
lbadan Brewery in 1982. Following the coming into effect of the Companies and
Allied Matters Act in 1990, the name of the company was changed to "Nigerian
Breweries Plc" to reflect its public limited liability status.

In 1993, the Company acquired its fifth brewery in Enugu and in 2003, a sixth
brewery (Ama Brewery), sited at Amaeke Ngwo in Enugu State was commissioned.
Operations in the old Enugu Brewery were discontinued in 2004 following the
completion of Ama Brewery. An ultramodern malting plant was acquired in Aba in
2008.

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Nigerian Breweries Plc has a rich portfolio of high-quality brands: Star lager beer was
launched in 1949, followed by Guider lager beer in 1970. Maltina, the nourishing malt
drink, was introduced in 1976, followed by legend Extra Stout in 1992 and another
malt drink, Amstel Malta in 1994. Heineken lager beer was re-launched into the
Nigerian market in 1998. Fayrouz, the premium non- alcoholic soft drink, was
launched in 2006 while Climax herbal energy drink was launched in 2010. Following
the acquisition of Sona Systems and Life Breweries in 2011, Goldberg lager, Malta
Gold malt drink and life Continental lager, were added to the brand portfolio. The
Company increased its portfolio of brands in 2014 with the addition of two-line
extensions of the Star brand- Star lite and Star Radler. Also in 2014, as a result of the
merger with Consolidated Breweries Plc, "33" Export lager beer, Williams dark
ale, Turbo King dark ale, more lager beer and a malt drink, Hi Malt, became
part of the Company's product offering. The Ace brand in the Ready-to-Drink
(RtD) category was launched in 2015 while Tiger lager beer, an international
premium brand was added to the portfolio of brands in 2018.

The Company has an export business which dates back to 1986. The current export
destinations are the United Kingdom, The Netherlands, United States of America,
Canada, some parts of Africa and parts of the Middle East and Asia.

The Company was listed on the floor of The Nigerian Stock Exchange (NSE) in
1973.As at 31"t December, 2019, it had a market capitalisation of approximately N
472 billion, making it one of the largest companies in Nigeria by market
capitalisation. It has received several awards in the capital market including, The NSE
President's Merit Award in the Brewery Sector, The NSE Quoted Company of the
Year Award, The NSE CEO's Distinguished Award for Compliance and The NSE
CEO's award as the Most Compliant Listed Company on The Nigerian Stock
Exchange. In 2019, the Company was a recipient of the Institute of Chartered
Secretaries and Administrators (ICSAN) Award for Excellence in Corporate
Governance (Corporate Category) as well as the Institute of Directors' Nigeria
Corporate Governance Award, 2019. These awards are a reflection of the Company's
continued commitment to excellence in corporate governance matters.

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Nigerian Breweries is also a recipient of several awards and recognitions in other
areas of its operations including product quality, marketing excellence, productivity
and innovation, health and safety, corporate social responsibility and sustainability.

4.1.1 Competitors:

Brooklyn Brewery,

Deschutes,

Epic Brewing,

Guinness Nigeria,

Harpoon Brewery,

Palm Breweries,

Hop Valley Brewing and Revolution Beer,

4.1.2 Mission statement:

“to be the leading beverage company in Nigeria, marketing high quality brands to
deliver superior customer satisfaction in an environmentally friendly way” is a kind of
Holy Grail etched in the minds of our employees.

4.2 African Petroleum Plc

The history of African petroleum Plc. dates back to 1945 when the British petroleum
company limited bought up the assets of the Atlantic Refining Company on the West
Africa coast. In1964, AP Nigerian limited was incorporated in Nigeria. As an
associate of the world-wide AP group, it marketed petroleum throughout the federal
Republic of Nigeria. In 1973, the company changed from a private company to public
company, when 40% of its shares were sold to Nigerian citizens in compliance with
provisions of Nigerian Enterprises promotion decree of 1977.

4.2.1 Mission:

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APPO’s mission is to promote cooperation in the field of hydrocarbons of its Member
Countries and other global institutions to foster fruitful collaboration and partnerships
while utilizing petroleum as a catalyst for energy security, sustainable development
and economic diversification in Africa.

4.2.2 Vision:

APPO aspires to be the World’s reference and lead institution on Africa’s hydro-
carbon matters.

4.2.3 Competitors:

Caspian Sunrise. Energy & Utilities - Public.

Seplat Petroleum Development Company. Energy & Utilities - Public.

CPC. Energy & Utilities - Subsidiary.

BP. Energy & Utilities - Public.

Chapter 5: Data Analysis And Interpretation

Presentation Of Data And Analysis Of Data

This chapter deals with the presentation of data used in this research work and also
attempt to answer questions in the mind of the researcher. It deals with clarification of
the ways in which data obtained during the field survey have been effectively used in
the study.

Raw data collected by any method employed in a research will remain raw unless it is
presented and analyzed. Therefore, without analyzing research work is working
meaningless in terms of assisting the researcher’s question for truth.

5.1 Presentation Of Data

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For the purpose of this research 13 questionnaires were typed and distributed and
were completed and returned. This study was carried out to determine the study of
comparative analysis of software accounting system and manual accounting system
and the result of the research work was represented in a statistical form and
percentage was used for the analysis

QUESTION ONE

Is manual accounting system, the most commonly used accounting information

techniques in the industry for management decision – making?

Response Number of Respondent Percentage (%)

Strongly agreed 29 34
Agreed 43 50
Disagreed 6 7
Strongly disagreed 8 9
Total 86 100

Table 5.1.1

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Chart 5.1.1

9%

7%

34%

50%

Strongly agreed Agreed

Disagreed Strongly disagreed
From the above response in Table 4.1.1 it shows that 34% strongly agreed, 50%
agreed, 7% disagreed and 9% strongly disagreed. It can be concluded that manual
accounting systems are the most commonly used accounting information techniques
in the industry for management decision.

QUESTION TWO

Are there funds lost through frauds and forgeries when organizations use software
accounting system?

Table 5.1.2

Response Number of Respondent Percentage (%)

Strongly agreed 37 43
Agreed 26 30
Disagreed 16 19
Strongly disagreed 7 8
Total 86 100

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Chart 5.1.2

8%

19%
43%

30%

Strongly agreed Agreed

Disagreed Strongly disagreed
From table 4.1.2 the responses indicate 43% strongly agreed, 30% agreed, 19%
disagreed and 8% strongly disagreed. It can be observed that funds are lost through
frauds and forgeries when organizations use software accounting system.

QUESTION THREE

Do you think that the use of software accounting system is more proficient, accurate
and pleasurable than manual accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 36 42
Agreed 29 34
Disagreed 6 7
Strongly disagreed 15 17
Total 86 100

Table 5.1.3

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The
Chart 5.1.3

17%

7% 42%

34%

Strongly agreed Agreed

Disagreed Strongly disagreed
analysis in Table 4.1.3, it shows that 42% strongly agreed, 32% agreed, 7% disagreed
and 17% strongly disagreed. It implies that the use of software accounting system is
more proficient, accurate and pleasurable.

QUESTION FOUR

As an accountant or manager does the use of manual accounting system create any
special problems.

Response Number of Respondent Percentage (%)

Strongly agreed 22 26
Agreed 38 44
Disagreed 9 10
Strongly disagreed 17 20
Total 86 100

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Table 5.1.4

Chart 5.1.4

20%
26%

10%

44%

Strongly agreed Agreed

Disagreed Strongly disagreed

From the table in 4.1.4, it shows that 26% strongly agreed, 44% agreed, 10%
disagreed and 20% strongly disagreed. From these responses one can conclude that
the use of manual accounting system creates special problems for the user i.e.,
accountants and managers.

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QUESTION FIVE
As an accountant or manager does the use of software accounting system create any
special problems?

Response Number of Respondent Percentage (%)

Strongly agreed 28 33
Agreed 9 10
Disagreed 33 38
Strongly disagreed 16 19
Total 86 100

Table 5.1.5

Chart 5.1.5

19%

33%

38% 10%

Strongly agreed Agreed

Disagreed Strongly disagreed

From Table 4.1.5, it shows that 33% strongly agreed, 10% agreed, 38% disagreed
19% strongly disagreed. From personal observation it was notice that software
accounting system does not create special create any special problem.

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QUESTION SIX
Does it take more financial resources to run a software system than manual
accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 33 38
Agreed 24 28
Disagreed 10 12
Strongly disagreed 19 22
Total 86 100

Table 5.1.6

Chart 5.1.6

22%

38%

12%

28%

Strongly agreed Agreed

Disagreed Strongly disagreed

According to table 4.1.6, it shows that 38% of the respondents strongly agreed, 28%
agreed, 12% disagreed, and 22% strongly disagreed. From this analysis it was clarify
that it takes more financial resources to run a software accounting system than the
manual accounting system.

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QUESTION SEVEN
Does your organization encounter frauds and forgeries when using software than the
manual accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 42 49
Agreed 19 22
Disagreed 17 20
Strongly disagreed 8 9
Total 86 100

Table 5.1.7
From table 4.1.8, it shows 49% strongly agreed, 22% agreed, 20% disagreed and 9%
strongly disagreed. Observations show that many accountants or managers agreed that
computerization has increased rapidly in terms of frauds and forgeries.

Chart 5.1.7

9%

20%

49%

22%

Strongly agreed Agreed

Disagreed Strongly disagreed

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.

QUESTION EIGHT
Does the software accounting system increase effectiveness and efficiency in your
organization than manual accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 39 45
Agreed 22 28
Disagreed 10 12
Strongly disagreed 13 15
Total 86 100

Table 5.1.8

Chart 5.1.8

15%

12%
45%

28%

Strongly agreed Agreed

Disagreed Strongly disagreed

From table 4.1.8, it reveals that 45% strongly agreed, 28% agreed, 12% disagreed and
15% strongly disagreed. One can inferred that in software accounting system, the
effectiveness and efficiency has increased tremendously than when manual
accounting system are used.

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QUESTION NINE

Are frauds and forgeries encouraged with the use of software accounting system than
with manual accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 42 49
Agreed 21 24
Disagreed 14 16
Strongly disagreed 9 11
Total 86 100

Table 5.1.9

Chart 5.1.9

11%

16%

49%

24%

Strongly agreed Agreed

Disagreed Strongly disagreed

From the table, 49% strongly agreed and 24% agreed, 16% disagreed and 11%
strongly disagreed that software accounting system are not encouraged with the frauds
and forgeries compare to manual accounting system.

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QUESTION TEN
Has there been any increase in the quality of work done since the use of software
accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 48 56
Agreed 31 36
Disagreed 5 6
Strongly disagreed 2 2
Total 86 100

Table 5.1.10

Chart 5.1.10
2%
6%

36%
56%

Strongly agreed Agreed

Disagreed Strongly disagreed

From table 4.1.10, it shows that 56% strongly agreed, 36% agreed, 6% disagreed and
2% strongly disagreed. It implies that the use of software accounting system has
maximum increase for the quality of work done.

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QUESTION ELEVEN

Does the software accounting system handle large volume of data than the manual
accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 40 46
Agreed 36 42
Disagreed 4 5
Strongly disagreed 6 7
Total 86 100

Table 5.1.11

Chart 5.1.11

7%
5%

46%

42%

Strongly agreed Agreed

Disagreed Strongly disagreed

From table 5.1.11, it indicates that 46% strongly agreed, 42% agreed, 5% disagreed,
7% strongly disagreed. It implies that software accounting system can handle large
volume of data than the manual accounting system. Thus, with the above view, it then
stands out that computerized accounting turns out large volume of data.

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QUESTION TWELVE

Is software accounting system capable of storing retrieving, analyzing, processing,

summarizing and reporting promptly than manual accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 43 50
Agreed 36 42
Disagreed 4 5
Strongly disagreed 3 3
Total 86 100

Table 5.1.12

Chart 5.1.12
3%
5%

50%
42%

Strongly agreed Agreed

Disagreed Strongly disagreed

From table 4.1.12, it indicates that 50% strongly agreed, 42% agreed, 5% disagreed
and 3% strongly disagreed. It can be inferred that software accounting system is most
capable of handling, storing, retrieving, analyzing, processing, summarizing and
promptly reporting.

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QUESTION THIRTEEN

Is manual accounting system more effective and efficiently in reducing total amounts
of funds lost through frauds and forgeries than software accounting system?

Response Number of Respondent Percentage (%)

Strongly agreed 30 35
Agreed 24 28
Disagreed 14 16
Strongly disagreed 18 21
Total 86 100

Table 5.1.13

Chart 5.1.13

21%

35%

16%

28%

Strongly agreed Agreed

Disagreed Strongly disagreed

From table 4.1.13 it shows that 35% strongly agreed, 28% agreed, 16% disagreed, and
21% strongly disagreed. From personal observation it was notice that manual
accounting system is more effective and efficient in reducing frauds and forgeries in
total amount of fund.

5.2 TEST OF HYPOTHESES

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The hypothesis which was stated earlier in chapter one would be tested in this chapter
for acceptance or rejection.

HYPOTHESIS ONE

For the purpose of clarifying the hypothesis are hereby restated thus

H0: frauds and forgeries are not encouraged with the use of software accounting
system than manual accounting system.

H1: frauds and forgeries are encouraged with the use of software accounting system
than manual accounting system

Grouped that Grouped that

Respondent No. of respondent strongly agreed or strongly disagrees or
agreed disagreed
Accountant 48 35 13
Manager 38 28 10
Total 86 63 23

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Table 5.2.1

Conclusion: fraud and

Graph 5.2.1
forgeries are
encouraged with the
35
use of software
30
accounting system than
25
manual
20

15

10

0
Accountant Manager

Agreed or Strongly Agreed Series 3

HYPOTHESIS TWO

H0: Software accounting system is not able to handle large volume of data than the
manual accounting system.

H1: Software accounting system is able to handle large volume of data than the
manual accounting system.

Grouped that Grouped that

Respondent No. of respondent strongly agreed or strongly disagreed or
agreed disagreed
Accountant 48 42 6
Manager 38 34 4
Total 86 76 10
Table 5.2.2

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Conclusion: Software accounting system is able to handle large volume of data than
the manual accounting system.

Graph 5.2.2

45
40
35
30
25
20
15
10
5
0
Accountant Manager

Agreed or Strongly Agreed Series 3

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HYPOTHESIS THREE

H0: Manual accounting system is not effective and efficient than the software
accounting system in reducing the amount of funds through frauds and forgeries.

H1: Manual accounting system is effective and efficient than the software accounting
system in reducing the amount of funds through frauds and forgeries.

Grouped that Grouped that

Respondent No. of respondent strongly agreed or strongly disagreed or
agreed disagreed
Accountant 48 30 18
Manager 38 24 14
Total 86 54 32
Table 5.2.3

Conclusion: Software accounting system is able to handle large volume of data than
the manual accounting system.

Graph 5.2.3

30

25

20

15

10

0
Accountant Manager

Agreed or Strongly Agreed Series 3

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HYPOTHESIS FOUR

H0: Software accounting system can provide quick report of forgeries in an

organization more than the manual accounting system

H1: Software accounting system cannot provide quick report of forgeries in an

organization more than the manual accounting system.

Grouped that Grouped that

Respondent No. of respondent strongly agreed or strongly disagreed or
agreed disagreed
Accountant 26 18 8
Manager 38 32 6
Total 64 50 14
Table 5.2.4

Conclusion: Software accounting system can provide quick report of forgeries in an

organization more than the manual accounting system.

Graph 5.2.4

35

30

25

20

15

10

0
Accountant Manager

Agreed or Strongly Agreed Series 3

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Chapter 6: Summary Of Findings, Conclusion And Suggestions

6.1 Summary Of Findings

The following findings were made and summarized as follows:

 Computerized accounting system is the most accurate accounting techniques that

are useful in planning, controlling and decision making in organizations.
 Manual accounting system according to my findings creates special problems for
the users of accounting information. Such as accountants and managers since the
system required speed, accuracy and capacity.
 Software accounting system handles large volume of data than the use of manual
accounting system.
 Manual accounting system are the most commonly used accounting information
techniques in the industry for management decision making than software
accounting system due to inability of some employees of the organization to
operate the computer.
 A huge amount of money is lost through frauds and forgeries when organizations
use software accounting system.
 Software accounting system is capable of storing, processing, summarizing,
retrieving and analyzing business information.

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6.2 Conclusion

From the study, software accounting system proves to be a better choice in handling
data but the issue of fraud and forgery continues to be a major challenge to
accountants and managers. Fraud and forgery are a security issue that is common to
most software implementation which can be measured and reduced.

Computerized Accounting System which is technically known as Electronic Data

Processing (EDP) accounting system is an integrated computer-based system which
allows the user to enter the transaction into the program once and all accounts are
updated as necessary. It is also a specialized machine system use in gathering
information. It also provides information for decision making functions and has been
of tremendous benefits to all manner of firms and organizations. Computerized
accounting system has helped in facilitating the provision of timely, quick customer
service delivery, accurate and reliable information, required by the firms and
organizations.

It has also brought about quality performance in business operations by abiding by the
accounting instructions and guidelines which help them to minimize risk/challenges
that are likely to be encountered in the course of their duties as well as evolves
adequate measures to combat such challenges and achieve success.

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6.3 SUGGESTIONS

 After reaching the results, the study recommendations or suggestions was

highlighted which when implemented will produce much required choice of better
accounting system.
 Migrating to computerized accounting system: recent experience has shown that
manual accounting systems are no longer attainable in processing large volume of
data or little volume of data during transactions. Therefore, showing the necessity
for companies to move over to software accounting system.
 Computerized accounting system encourages speed in caring out various business
objectives therefore organizations are recommended to switch over to
Computerized accounting system for their daily business activities in order to
increase efficiency and effectiveness.
 The researcher therefore suggests that further research should be carried out in the
following areas:
o The effect of the introduction of accounting system in organizations.
o Managers and students of accounting should be introduced to both the
theoretical and practical of Computerized accounting system.
o Encouragement of research in the areas of Computerized accounting system in
our institution of higher learning.
o Establishment of post graduate diploma in accounting and financial modelling
as one of the series of qualifying examination for being a member of
professional accounting body.
In reducing fund lost through fraud and forgery managers and accountants are
recommended to provide software developers, with information on progressive
changes in carrying out business activities to enable them design better algorithms in
accounting software. Also, users of this software are to be trained to enable them
monitor fraudulent activities that could be carried out if not monitored.

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BIBLIOGRAPHY

Reference Books And Journals:

 Public finance - Vikas publishing House PVT Ltd.

 Computers and Automation - Arco Publishing Company.
 Financial Accounting Made Simple-volume 1 - ROI Publishers.
 Business growth and performance and the financial reporting practices - Journal
of small business management
 Computer-based Accounting Systems in the Private Sector - ICAN Students’
Journal

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4. Assessing the effect of using computerized accounting systems on organizational

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5. The use of computerized accounting system over the manual accounting system- a
case study of small and medium scale enterprises, ashanti region.
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Records in Ghanaian Banks: a Case Study of the Ga Rural Bank.
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7. Computerized vs. Non-computerized Accounting System of Small and Medium

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8. Computerized Accounting Systems: Measuring Structural Characteristics.

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9. Impact of computerized accounting system in ensuring effective financial control

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ools&btnG=

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13. Strategies Used to Transition from Manual to Computerized Accounting in Small
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hl=en&as_sdt=0%2C5&q=Strategies+Used+to+Transition+from+Manual+to+Co
mputerized+Accounting+in+Small+Businesses&btnG=

14. Factors influencing the use of computerized accounting systems (CAS).

https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=Factors+influencing+the+use+of+computerized+accou
nting+systems+%28CAS%29.&btnG=

15. Impact of Computerized Accounting Systems on the Quality of Financial Reports

in the Banking Sector of Ghana.
https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=Impact+of+Computerized+Accounting+Systems+on+t
he+Quality+of+Financial+Reports+in+the+Banking+Sector+of+Ghana.&btnG=

16. The Influence of Accounting Computerization on Traditional Accounting.

https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=The+Influence+of+Accounting+Computerization+on+Tr
aditional+Accounting.&btnG=

17. The effects of computerized accounting system on auditing process.

https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=The+effects+of+computerized+accounting+system+on
+auditing+process&btnG=

18. Does computerized accounting system increase the supply chain accuracy? An
empirical evidence from Indonesian supply chain companies.
https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=Does+computerized+accounting+system+increase+the
+supply+chain+accuracy

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%3F+An+empirical+evidence+from+Indonesian+supply+chain+companies.&btnG
=

19. Comparative Analysis of Computerized Accounting System and Manual

Accounting System of Quoted Microfinance Banks (mfbs) in Nigeria.
https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=Comparative+Analysis+of+Computerized+Accounting
+System+and+Manual+Accounting+System+of+Quoted+Microfinance+Banks+
%28mfbs%29+in+Nigeria.&btnG=

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APPENDIX I

QUESTIONNAIRE

Kindly indicate your response to each of the questions below by ticking (√) in the
appropriate box.

SECTION A

PERSONAL DATA

1) SEX

a) Male [ ] b) Female [ ]

2) AGE

a) Below 30 years [ ] b) Between 30-50 years [ ]

c) Over 50 Below [ ]

3) EDUCATIONAL BACKGROUND:

a) Commerce [ ] b) Science [ ] C) Arts [ ]

d) Others []

SECTION B

1. Is manual accounting system, the most commonly used accounting information

techniques in the industry for management decision making?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

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2. Are the funds lost through frauds and forgeries when organization uses manual
accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

3. Do you think the use of software accounting system is more proficient, accurate
and pleasurable than manual accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

4. As an accountant /manager does the use of manual accounting system create

special problems?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

5. As an accountant/ manager does the use of software accounting system create

special problems?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

6. Does it take more financial resources to run a software system than with manual
accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

7. Does your organization encounter frauds and forgeries when in use of software
than the manual accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

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8. Does the software accounting system increase effectiveness and efficiency in your
organization than with manual accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

9. Are frauds and forgeries encouraged with the use of software accounting system
than with manual accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

10. Has there been any increase in the quality of work done since the use of software
accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

11. Does the software accounting system handle large volume of data than with
manual accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

12. Is software accounting system capable of storing, retrieving, analyzing,

processing, summarizing and reporting promptly than manual accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

13. Is manual accounting system more effective and efficient in reducing total amount
of funds lost through frauds and forgeries than software accounting system?
(a.) Strongly agreed [ ] (b.) Agreed [ ] (c.) Disagreed [ ]
(d.) Strongly Disagreed [ ]

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