CHALLENGES OF ELECTRONIC ACCOUNTING TOOLS FOR MACRO-ECONOMIC GROWTH IN NIGERIA: A CASE STUDY OF SELECTED BANKS

ABSTRACT

Electronic Accounting or E-Accounting as it is popularly called is one of the areas that technology has affected. Previously, financial accounting was done manually leading to a great deal of paper work until the introduction computers which now helped accounting information  in  a  wide  area.  E-Accounting  involves  performing regular   accounting   functions,   accounting    research   and   the accounting training and education through computer based, internet based, accounting  tools such as digital tool kits, various internet resources, international web-based materials, institute and company data  bases,  web  links,  electronic  financial  spreadsheet  tools  to provide   efficient   decision   making.   Challenges   of   electronic Accounting bothers the mind of the people, on this work, reasons for ineffective  use of electronic  accounting  has been  discovered  and solutions have been recommended. Such solutions likes providing standard electronic accounting with modern software by government for all public sector accountants, regular training of accounting staff on the  various  software  and  terminologies,  organizing  workshop, seminars and conferences by government for accountants in public sector   on   electronic   accounting   since   the   world   is   facing technological development globally and many other   solutions suggested in this work.

CHAPTER ONE INTRODUCTION

1.1    Background of the Study

Some years ago, most financial accounting was done manually, leading to a great deal of paperwork. Currently,  most accounting information is recorded via computers and wide area networks. Technology has certainly changed the face of accounting over the years. While people have diverse views as to whether technology’s impact on accounting has positive or negative, it is clear that technology has drastically changed the accounting profession (Adejola, 2015).

There are no questions that the role of information technology (IT) is pervasive across the economy; it is a central issue that dominates short, medium and long-term strategic discussions across all businesses. The best businesses have their technology vadars consistently switched on, scouring and weighing new and up coming technologies that can achieve competitive value.

The  pace  and  nature  of  change  in  the  environment  has  had  a profound influence on business organizations and the way in which they are managed. Some authors in management theory even suggest that a paradigm shift has taken place in the way in which companies are managed. Accounting, as the language of business, and its accounting information system, as a subsystem of the business organization  has  also  been  affected  by  these  changes  (Adejola, 2015).

According to Johnson (2005), the most significant development of the   millennium   which   has   substantially   influenced   business operations in the world is the emergence of the information age. The remarkable progress achieved in Information and Communications Technology (ICT) has made it possible for information to be digitalized and transmitted faster and cheaper in mega or terabytes.

Accounting plays a critical role in the success or failure of contemporary business institutions. Accounting systems are responsible for recording, analyzing, monitoring and evaluating the financial   condition   of   companies,   preparation   of   documents necessary for tax purposes, providing information support to many other organizational functions and so on (Effah and Abor, 2011).

E-accounting  refers  to  Electronic  Accounting,  a  term  used  to describe an accounting system that relies on computer technology for capturing and processing financial data in organizations Effiah and Abor (2011).

According to Shraddha (2014) a computerized accounting system is able to handle financial data efficiently,  but the true value of an accounting system was that it was able to generate immediate reports regarding the company.

E-accounting involves performing regular accounting functions, accounting  research  and  the  accounting  training  and  education through various computer based/internet based accounting tools such as  digital tool kits,  various  internet  resources,  international  web- based materials, institute and company data bases which are internet based, web links, internet based accounting software and electronic financial spreadsheet tools to provide efficient decision making (Shraddha, 2014).

Online accounting through a web application is typically based on a simple monthly charge and zero-administration approach to help businesses concentrate on core activities and avoid the hidden coats associated with traditional accounting software such as installation, upgrades, exchanging data files, backing and disaster recovery.

1.2    Statement of the Problem

According to Amidu, Effiah and Abor (2011) Accounting was one of the first functional areas to benefit from computerization when computers were initially introduced to organizations (Doost 1999). Furthermore, Tavakilian (1995) noted that an accounting package is usually one of the first major computer packages that a company purchases and it is one of the two business applications often used, with word processing being the other. It should not be a surprise because accounting plays a very significant role in the performance of organizations.

According to Stefanou (2006) the primary purpose of an accounting information system (AIS) is the collection and recording of data and information regarding events that have an economic impact on organizations and the maintenance, processing and communication of such information to internal and external stakeholders. The information is used for the evaluation of the financial position of the organization and for decision-making purposes.

However, low understanding still persist among Nigerians as some accountants are yet to understand the details of the electronic accounting  nor appreciate  the importance  of computerized accounting information systems Onyiah (2013).

According to Onyiah (2013), business transactions are carried out in Nigeria  on  near  zero  trust  levels  occasioned  by  weak  social structures  and  enforceable  laws  regulating  business  relationships. Also with a large population that is barely literate and an economy lacking social structures to support such electronic accounting policy at  this  point  in  time,  demeans  the  move  even  with  the  best  of intention.

With  the  advent  of  information  and  communication  technology based  accounting,  it is believed  that the  following will be easily facilitated  in  an  organization:  project  monitoring  and  variance analysis, budget and forecast, provision of detailed expenditure information  to aid  the management  in cost control and decision- making,  ascertainment with accuracy the revenue generated  in an organization by just pressing/ touching a button. (Adejola, 2015)

However, low understanding still persist among Nigerians as some accountants are yet to understand the details of electronic accounting nor appreciate  the importance  of computerized  accounting information  systems  (Onyiah,  2013).  Business  transactions  are carried out in Nigeria on near zero trust levels occasioned by weak social structures and enforceable laws regulating business relationships. Also, with a large population that is barely literate and an economy lacking basic structures to support such electronic accounting policy at this time, demeans the move even with the best of intention (Onyiah, 2013).

Continuing with the current accounting practices in Nigeria, the achievement   of   the   goals   of   electronic   accounting   will   be undermined. Need therefore arises that accounting profession do upgrade its practices and skills to reflect where the world is going, not where it has been. Advances in technology will also demand new skills and competencies from accountants and finance professionals. (Adejola, 2015). This paper seek to explore the use of technology to add value in accounting, enhance data analysis and interpretation of skills for meeting changing business needs.

1.3    Objectives of the Study

The main  objective  of this paper  is to analyze  the challenges  of electronic  accounting  as  a  tool  for  macro  economic  growth  in Nigeria. The specific objectives are:

i.      To  determine  the  perceived  electronic  accounting information security threats in Nigeria

ii.      To determine the state of the art of E-accounting systems used among banks in Nigeria.

iii.      To ascertain the effect of electronic accounting information systems on government  accounting operations  in Nigeria with a view to finding whether government accounting are performed manually or has been computerized.

1.4    Research Questions

This paper seek to provide answers to the following questions:

1.      What  are those perceived  electronic  accounting  information security threats in Nigeria?

2.      To what extent has the state of the art of e-accounting systems used among banks in Nigeria, been improved?

3.      What  are  the  effects  of  electronic  accounting  information systems on government accounting in Nigeria?

1.5    Research Hypotheses

1.      There   is   no   significant   perceived   electronic   accounting information security threats in Nigeria

2.      There is no significant improvement in the state of the art of electronic accounting systems used among banks in Nigeria.

3.      There   is  no  significant   impact   of   electronic   accounting information systems on government accounting in Nigeria.

1.6    Significance of the Study

This paper is timely in the sense that electronic accounting is still an issue  yet  to  be  fully  tackled.  International  Accounting  Standard (lAS) may also use these as a basis for setting guide and standards. The result of this study maybe useful to auditing firms when trying to consider  the  technological  needs  to  improve  the  skill  of  their students in accounting.

This work can also serve researchers need when trying to research more  on  the  challenges  of electronic  accounting  in  Nigeria.  The paper  also  provide  guidance  for the improvement  of institutional arrangement    and   management    practices   for   better   resource allocation, resource use and financial management.

1.7    Limitation of the Study

This research into the challenges of electronic accounting covers a reasonable number of accounts and audit department in Enugu State. It will also consist of accountants in the accounting unit of First City Monument Bank (FCMB) Enugu branches, Enugu State Ministry of Finance, Office of the Accountant  General and Board of Internal Revenue, Enugu State. The efficiency of accounting practice and the factors that affect the use of (ICT) Information and Communication Technology covers a wide aspect.

To  fully  understand  electronic  accounting,  one  has  to  study  the history of accounting profession, fundamentals of accounting, web- based accounting, and information and communication technology. In this paper, attempt has been made to present a comprehensive appraisal of challenges of electronic accounting in Nigeria. The exercise is constrained by the lack of detailed official (published) economic data.

Ranging from profession, statutory and a host of several factors but this  work   is  restricted   to  cover   the   challenges   of   electronic accounting. The level of ICT investment by firms obtained will help our result to be generalized and practiced.

Distance was one constraint that affected the researcher. Despite this challenge, the researcher was able to overcome them through persistent efforts.

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