CHAPTER ONE INTRODUCTION
1.1 BACKGROUND TO THE STUDY
In the past and even up till now accounting processes are done manually through the use of separate ledgers to record financial transactions, it involves the use of books, supporting documents and papers to prepare financial statement. In a sole proprietorship that is probably developing, there might be minimal errors but for a large organisation, these errors are likely not to be easily detected or can be unknown for a long period of time which could affect the company on the long run. Over the years, through gradual changes, Accounting information system has been introduced which impacts the ways in which accounts are been prepared now. Information system has changed the way accounting tasks are processed; the green paper days are gone and businesses now have a centralized place where all accounting transactions are entered and saved as there is no need for cumulating large and long columns and searching for paper journals where an accounting computer software can perform all of these tasks.
Most organisations spend a huge amount of money on information system. As a result, this has cause budget to increase overtime. The essence of information system on organisation is for them to perform their work effectively. A major role that it plays is that it aids decision making in an organisation.
Decision making focuses on the evaluation of two or more alternatives which leads eventually to a final choice. Accounting information on the other hand deals with the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by the users of the information.“Onaolapo and Odetayo (2012) identify accounting as the language of business as it records all transactions of an individual firms or bodies that can be expressed in monetary terms”. Professional accountants occupy very key and important position in the business world today.
This makes accountants involved in the decision making process of a corporate organisation; the decision is based on relevant financial information and non-financial information. The American Accounting association defines accounting information system as a subset of information system that produces many amounts of data that can be used by the decision makers within and outside the organisation. Reliable, timely and correct accounting information plays a vital role in the management decision making and information technology is important for accounting information system for proving quality information.
According to Huber (1990), it was emphased that automated accounting information system aids decision making for management of organisation. This simply implies that accounting information also deals with accuracy and speed so as to make needed information available at an appropriate time and manner.
This study is focused on the financial health performance of selected organisations and how the adoption of accounting information system has affected company‟s performance.