EFFECT OF COMPUTERIZED
ACCOUNTING ON BUSINESS IDEAS IN MERCHANDISING COMPANIES
IN MOGADISHU, SOMALIA
ABDIRAHMAN AHMED MOHAMED
GRADUATION PROJECT SUBMITTED IN
PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE DEGREE IN BACHELOR
OF SCIENCE IN ACCOUNTING
FACULTY OF ACCOUNTANCY
SIMAD UNIVERSITY
JULY, 2023
Background of the Study
Accounting is a vital aspect of any business, large or small, profit or non-profit. Many small businesses use with manual accounting. Others may be considering implementing a computerized approach since accounting software is significantly more economical. Manual and automated accounting systems accomplish essentiall Effect Of Computerized Accounting on Business Ideas the same procedures; the accounting principles and concepts are the same, with the only difference being in the details of the process. Although a computerized accounting system is costly, its advantages include speed and the ability to retain information. implementing a computerized approach since accounting software is significantly more economical. Manual and automated accounting systems accomplish essentially the same procedures; the accounting principles and concepts are the same, with the only difference being in the details of the process. Although a computerized accounting system is costly, its advantages include speed and the ability to retain information. (Sugut, 2017)
Bekele (2017) pointed out that the benefits of CAS to small enterprises were not provided. The organization cannot enjoy the benefits of CAS due to a lack of sufficient and critical technology foundations, a solid, suitable internal controlling system, competent enough human resource management capabilities, and the platform's lack of the essential accounting were not provided. The organization cannot enjoy the benefits of CAS due to a lack of sufficient and critical technology foundations, a solid, suitable internal controlling system, competent enough human resource management capabilities, and the platform's lack of the essential accounting units. The application of computer-based software used to enter, process, store, and output accounting information is known as a computerized accounting system. Effect Of Computerized Accounting on Business IdeasThis application is in support of the ever-evolving technology that allows businesses to use computer programs to handle previously manual jobs. A computerized accounting system entails the computerization of accounting information systems that are created to aid decision making. These are related with a variety of advantages such as faster completion of routine transactions,
timeliness, quick analysis, accuracy, and reporting. (Sugut,2017)
According to Lose, Tengeh, et al. (2016) Recognizing the
importance of small and medium-sized firms (SMEs) in economic growth has been aglobal initiative for many years. If one is missing or inadequate, business growth is uncertain. For example, without opportunity, the intention cannot be applied; without the intent motivated by entrepreneurial vision and energy,Effect Of Computerized Accounting on Business Ideasopportunities will not be turned into business growth; and without the ability, entrepreneurial intention and opportunity are unlikely to be fulfilled. Thistremendous interdependence has an impact on the critical behavior of the owner-manager's judgment in terms of scaling down, keeping stable, or increasing the small firm. It is proposed that if small firms are to realize their full potential as outlined by importance of small and medium-sized firms (SMEs) in economic growth has been a global initiative for many years. If one is missing or inadequate, business growth is uncertain. For example, without opportunity, the intention cannot be applied; without the intent motivated by entrepreneurial vision and energy,opportunities will not be turned into business growth; and without the ability, entrepreneurial intention and opportunity are unlikely to be fulfilled. This tremendous interdependence has an impact on the critical behavior of the owner-manager's judgment in terms of scaling down, keeping stable, or increasing the small firm. It is proposed that if small firms are to realize
their full potential as outlined by (Lynch,2019)
The CAS is in charge of documenting accounting transactions on a computer using various accounting apps and keeping them in a database. Users of that database provide accurate reports. The principles of a computerized accounting system include all of the fundamentals of any database study. The usage of a computer system aids in the simplification, integration,and cost efficiency of all business processes, as well as the accurate presentation of all corporate activities to financial report stakeholders. Because of the tremendous advancements in technology, many businesses prefer to track monetary transactions using computerized software. Effect OfComputerized Accounting on Business Ideason a computer using various accounting apps and keeping them in a database. Users of that database provide accurate reports. The principles of a computerized accounting system include all of the fundamentals of any database study. The usage of a computer system aids in the simplification, integration, and cost efficiency of all business processes, as well as the accuratepresentation of all corporate activities to financial report stakeholders. Because of the tremendous advancements in technology, many businesses prefer to track monetary transactions using computerized software.
Abdulle et al. (2019) say that a CAS can deliver all forms of management reports, including budget analysis and variance analysis, in a timely manner. Managers can then make more informed decisions based on accurate and timely data gathering and analysis. Completing smallbusiness financial management and recording important financial papers on a computer is more convenient and less prone to errors. deliver all forms of management reports, including budget analysis and variance analysis, in a timely manner. Managers can then make more informed decisions based on accurate and timely data gathering and analysis. Completing small
business financial management and recording important financial papers on a computer is more convenient and less prone to errors. This is the benefit of employing computerized accounting
software to complete small business accounting systems and capture critical accounting data. Furthermore, by creating a software to complete small business accounting systems and capture critical accounting data. Furthermore, by creating a network, a small business's computerized accounting system modified the previous false financial reporting of the small business and improved management performance. As a result, implementing a computerized accounting software system stimulates small business growth and modernizes small business administration.
business's computerized accounting system modified the previous false financial
reporting of the small business and improved management performance. As a result, implementing a computerized accounting software system stimulates small
business growth and modernizes small business administration. (Victor, 2016).
There are also numerous difficulties, such as flexibility and dependability. Simplicity of Use is a long-term key issue affecting computerized accounting systems. Simplicity of Use can be defined as an appropriate design of AIS that securely supports business strategies that increase company profitability and improve performance; this design should be described with the simplest way to input data and the simplest way to understand the outputs (Samuel, 2011). The Accounting Information System (AIS) is crucial in the performance of accounting functions and activities.
and dependability. Simplicity of Use is a long-term key issue affecting computerized accounting systems. Simplicity of Use can be defined as an appropriate design of AIS that securely supports business strategies that
increase company profitability and improve performance; this design should be described with the simplest way to input data and the simplest way to understand the outputs (Samuel, 2011). The Accounting Information System (AIS) is crucial in the performance of accounting functions and activities. (Alamin, 2016).
Flexibility is one of the major subjects in AIS (Genus and Dickson, 1995). Flexibility is
the ability of the system to switch or shift from planned activity (Eardley et al, 1997). Evans (1991) defines flexibility as the ability against changes aligned with future organizational needs. Rezayian (2001) stated that an information system must be able to be integrated into the future and this can be covered by flexibility. integrated into the future and this can be covered by flexibility. Reliability is the overall consistency of a measure. A measure is said to be reliable if it generates consistent results under consistent conditions. The American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) collaborated to establish the SysTrust service structure. It is intended to make management,
customers, and business partners more comfortable with systems that support a business or specific activity. consistency of a measure. A measure is said to be reliable if it generates consistent results under consistent conditions. The American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) collaborated to establish the to be reliable if it generates consistent results under consistent conditions. The American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) collaborated to establish the SysTrust service structure. It is intended to make management, customers, and business partners more comfortable with systems that support a business or specific activity. customers, and business partners more comfortable with systems that support a business or specific activity.
1.2 Problem Statement
A computerized accounting system is intended to automate and integrate all business processes, such as sales, finance, buying, inventory, and manufacturing, and to assist firms in handling all business transactions easily and cost- automate and integrate all business processes, such as sales, finance, buying, inventory, and manufacturing, and to assist firms in handling all business
transactions easily and cost-effectively. (Lanlan, 2019) A computerized accounting procedure employs computers and computer-based programs. Accounting software, for example, can be used to track, coordinate, summarize, review, view, and communicate to stakeholder’s financial information about business activities. It is a computerized system that automates accounting duties such as database documentation and report preparation by simplifying financial data inputs. computer-based programs. Accounting software, for example, can be used to track, coordinate, summarize, review, view, and communicate to stakeholder’s financial information about business activities. It is a computerized system that automates accounting duties such as database documentation and report preparation by simplifying financial data inputs. information about business activities. It is a computerized system that automates accounting duties such as database documentation and report preparation by simplifying financial data inputs.(Mohamed A. I., 2022)
The small businesses growth creates new jobs and hence drives employment (Amoah & Amoah, 2018). Another key purpose of small business is to alleviate social tensions and promote democratic market interactions. of small business is to alleviate social tensions and promote democratic market interactions. (Mpaata et al., 2020). Business growth, absolute or relative changes in revenues, assets, jobs, productivity, and profit margins are typically defined and
measured. assets, jobs, productivity, and profit margins are typically defined and
measured. (Fatoki,2021)
This study focuses on the ease of use, flexibility, and dependability of computerized accounting systems to investigate how they affect company growth. As a result, the goal of this research is to fill this knowledge vacuum by investigating the variables that influence how computerized accounting influences corporate growth. As a result, firms must use computerized accounting systems in order to improve performance. dependability of computerized accounting systems to investigate how they affect company growth. As a result, the goal of this research is to fill this knowledge vacuum by investigating the variables that influence how computerized
a result, the goal of this research is to fill this knowledge vacuum by investigating the variables that influence how computerized accounting influences corporate growth. As a result, firms
must use computerized accounting systems in order to improve must use computerized accounting systems in order to improve performance.
1.3 Research objectives
1. To investigate the effect of Simplicity of Use on business growth in Mogadishu Somalia.
2. To examine the effect Flexibility on business growth in Mogadishu Somalia.
3. To investigate the effect of reliability on business growth in Mogadishu Somalia.
1.4 Research Questions
1. what is effect of Simplicity of Use on business growth in Mogadishu Somalia?
2. what is effect of Flexibility on business growth in Mogadishu Somalia?
3.what is the effect of reliability on business growth in Mogadishu Somalia?
1.6: Scope and limitation of Study
The research focuses on determining the impact of computerized accounting systems
on corporate growth. This was determining the potential impact of computerized
accounting systems on business growth, namely merchandising companies, and how it
can alter company decision making. The study's respondents are confined to the
effect of computerized accounting on business growth in Mogadishu's bakara market. The key limitation of the study is the limited time. The time allotted for the investigation is insufficient for conducting complete research. There is also the issue of funding for printing materials and the cost of internet access for data. This investigation was limited in terms of time June, 2022 up to june,2023. time allotted for the investigation is insufficient for conducting complete
research. There is also the issue of funding for printing materials and the cost of internet access for data. This investigation was limited in terms of time June, 2022 up to june,2023.
1.7 Significance of the study
The significance of the study that the computerized accounting is that it can help to improve the accuracy and efficiency of accounting processes. This is because computerized accounting
systems can automate many of the manual tasks involved in accounting, such as data entry, reconciliation, and reporting. This frees up employees to focus on more strategic tasks, such as analysis and decision- efficiency of accounting processes. This is because computerized accounting systems can automate many of the manual tasks involved in accounting, such as
data entry, reconciliation, and reporting. This frees up employees to focus on more strategic tasks, such as analysis and decision-making. Furthermore, of computerized accounting is that it can help businesses to make better decisions, improve compliance, and save money. By providing businesses with access to real-time financial data, computerized accounting
systems can help businesses to make more informed decisions about pricing, inventory, and other key areas. This can help businesses to improve to make better decisions, improve compliance, and save money. By providing businesses with access to real-time financial data, computerized accounting systems can help businesses to make more informed decisions about pricing,
inventory, and other key areas. This can help businesses to improve their profitability and growth and make easier and understandable system or application that use in computerized accounting as a practical understandable system or application that use in computerized accounting as a
practical the importance of this study is to give vital information on the impact of computerized accounting on financial reporting among small and medium firms in Mogadishu. This study explained the significant influence and effects that computerized accounting may have on
the impact of computerized accounting on financial reporting among small and medium firms in Mogadishu. This study explained the significant influence and effects that computerized accounting may have on business growth.
1.8 Operational Definitions
Accounting: is the process of transforming financial transactions into usable quantitative
data through the collection, organization, recording, and reporting of financial transactions. (Ilias & Razak, 2011)
Computerized accounting is defined as a collection of components that includes all
inputs, storage, transaction processing, data collection, and reporting. inputs, storage, transaction processing, data collection, and reporting. (Wilson and Sangster,2010).
Simplicity of Use: Appropriate design of AIS that secure supports business strategies in ways that increase firm profitability
and improve performance; this design should be secure supports business strategies in ways that increase firm profitability and improve performance; this design should be stated with the
easiest way to input data and the easiest way to interpret the results. easiest way to input data and the easiest way to interpret the results. (Samuel, 2011).
Flexibility: the degree to which an organization is compatible with its environment and
organizational structure, or how to carry out financial activities without issues during the task. As a result, the accounting information system in the organization should be able to adapt and alter based on its demands, operations, and management. (G, Schober, 2006).
Reliability: is a necessary attribute for accounting information to be relevant for decision making. The degree to which information is unbiased, error-free, and faithfully represented is represented by its reliability. (FASB 1980).
Small and medium-sized firms (SMEs): are named by adjectives denoting size, thus
economists seek to categorize them based on some quantitatively observable indicators.
Business growth: is a stage in which a company has reached the point of expansion and is
looking for new ways to produce more profit. Business growth is determined by the business lifecycle, industry growth patterns, and the owners' ambition to create equity value. (Cyron,2018)
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