Accounting information systems and financial performance of manufacturing organizations

Abstract

This study was undertaken to investigate the effect of Accounting Information Systems on financial performance of manufacturing organizations. It was conducted at Ntake Bread Bakery. The study objectives were to analyze the accounting information systems used by Ntake bread bakery, examine the indicators of effective financial performance exhibited at Ntake Bread Bakery and establish the relationship between accounting information systems and financial Performance of Ntake Bread Bakery. A detailed description of literature on the concepts; Accounting Information System and financial performance was undertaken basing on the local and global publications. A descriptive research design was used and a total of 70 respondents consisting of Administrators, Accounts and Finance staff, head of Departments and staff participated in the study. These were selected using multi stage and random sampling and contacted through use of questionnaires and oral interviews. Data analysis was done with use of descriptive statistics and findings presented in tables, graphs and descriptions. Findings revealed that Manual Accounting information and Computerized Accounting Information systems were being used at the company, although computerized Accounting information was not yet strong. Computers, computerized accounting systems and software were the most ICT facilities used. Manual reports, payroll sheets, requisition and payment vouchers were some of the manual accounting information system facilities used. Financial performance was a priority but not yet effective at the company. Accountability, profitability, liquidity, financial reporting, investment levels, computation of financial ratios were major indicators of effective financial performance established. A strong positive relationship was established between accounting information system and ability of the company to attain effective financial performance. It was found that when well managed accounting information systems facilitate accountants to do better work, proper book keeping, timely financial reports, promoted personal interest and professionalism of accounting officials in their work, safeguarded financial resources and against fraud while ensuring effective documentation, value for money, professionalism of financial control, analysis and record keeping. It was concluded that accounting information systems had a significant effect on financial Performance of Ntake Bread bakery and could improve the financial status of the company when properly utilized. Major recommendations included strengthening computerized accounting information system, while upholding the benefits of manual accounting information system, acquiring more ICT facilities to achieve the above, involving all stakeholders in using computerized accounting facilities, strengthening the level of accountability, financial reporting and profitability. Evaluating the effect of ICT on ethical conduct of Accounts Staff, influence of management on effective financial performance were recommended for further study