Discuss about the Inluence of AIS on Walking Company.
In the business world, Accounting Information System is known to be to be increasingly significant to business operations. There is an increasing reliance on Information Technology (IT) through the application of Accounting Information System (AIS). Such is as a result of a need to enhance business efficiency (Chang 2001). It has been revealed that AIS is interdisciplinary in nature and appears to integrate the fields of Information System and Accounting (Borthick and Clark 1990). This view has been reinforced by several researches including Lallo and Selemat (2013, 2014) and Saira, Zariyawati, and Annuar (2010). These scholars have given an explanation that AISs have been viewed as the mechanism of providing financial information to firms and organizations (Chang 2001).
A considerable evidence exist that the within the Walking Company financial accounting (FA) has stayed the chief source of information for many managers. The above studies have as well as discovered that the Walking Company still has unproductive management of information, underprivileged control of system as well as a great percentage of decision making remains anchored on ad hoc basis even though having utilized AIS (Chang 2001).
The past literature argue that such a condition might be attached to original purposes of IT embrace. The accounting system (AS) initial function of substituting manual process of accounting has prevented additional utilization as well as exploration on the benefits of the accounting information system (Borthick and Clark 1990). It has been concluded that financial awareness among the organization differ substantially and the utilization of computers for preparing management AI (accounting information) is yet to hit its full potential (Chang 2001).
The rising global economic situation featuring advancement in the information technology, fast alterations in the processes of production, augmented sophistry of the purchaser, stiff competition in the market besides unethical skimming practices of producers as they drive to endure the anticipatable as well as complex enterprise subtleties, has presented to the front the essential function of AI in the business as well as economic processes particularly with respect to administrative efficiency and effectiveness (Chang 2001).
As currently acknowledged by a great percentage of individuals, accounting primarily speaks the business language as it registers and records every transaction of each firm or additional entities which are expressible in terms of money (Borthick and Clark 1990). Anchored on principle of going concern, accounting remains the system as well as art of gathering, categorizing, drawing summary as well as conveying the financial data needed to arrive at rational decisions economically (Chang 2001).
AI is, therefore, an element in peak, if not all, decisions relating to managerial of a financial nature. In economies that have developed, such decisions are to the tune of billions of dollars per annum. In certain instances, these decisions lack the desired levels of quality (Borthick and Clark 1990). Accordingly, where such studies enhance the process of making decision via enhanced information, community and society could greatly benefit. Accordingly, this study makes a firm argument that, a close and significance relationship exist between AI qualities alongside effective administration in the Walking Company (Chang 2001). The paper, therefore, undertakes an examination of the connection between accounting information system as well as the Walking Company organizational effectiveness and efficiency (Abernethy and Guthrie 2014).
In the present day, the world as well as human life has undergone a transformation to a knowledge era from information era, besides, knowledge has already been acknowledged as the greatest essential and treasured asset (Borthick and Clark 1990). Indeed, it is never personal similar to money. Moreover, it neither lives in a manuscript (book), a software program nor a data bank (Doms, Jarmin and Klimek 2004). It is believed that knowledge is always personified in an individual, taught as well as learnt by an individual, utilized as well as misused by an individual. AI, consequently remains an impartial technique for efficient as well as effective management and administration in the Walking Company (Gallagher 2014).
Pitiable AI risks effectiveness of organizational administration thereby making the management administratively undernourished. Doms, Jarmin and Klimek (2004) study held that the aftermath of this malnourishment accounts for the present distraught syndrome which many industries encounter (Borthick and Clark 1990). The organization is required to learn how to manage their respective intellectual properties especially knowledge to endure as well as compete within the ‘knowledge society’ (Robey and Boudreau 2009). In fact, the management of knowledge is concerned with the knowledge asset exploitation and management. It is on these basis that this paper wishes to undertake a deeper examination of the impact of AI’s quality on the Walking Company performance (Borthick and Clark 1990).
It is has been asserted in the Chang (2001) study that AI has a critical responsibility in the improvement of the organizational efficiency and effectiveness in worldwide competitive context. Moreover, Doms, Jermin and Klimek (2004) study concluded that financial statements (FS) remain the record valuable foundation of outwardly realistic organizational information. Despite the domineering utilization of financial statement besides ongoing advancement in accounting, some concern remain projected that accounting practice lags behind the fast economic alongside high technology alterations that habitually distresses value relevance (VR) of the AI.
The significance of the declaration made by Chang (2001) is reinstated by enormous accounting fraud witnessed in the developed economies particularly the US, fast altering business environment as well as reports by certain scholars that VR of AI has already diminished. Nevertheless, a great number of investigators claim that AI has never lost its VR. As held by Borthick and Clark (1990), there is a strong belief that accounting is available due to it satisfaction of the need majorly to provide information. To remain pertinent, data relating to accounting has to be swift for responding to the respective needs of the users (Gordon and Miller 2013).
AI is useful for investors who are never in a position to straightly access the of the Walking Company’s performance whereby they intend to make their investment. They normally rely on the financial reports (FR) prepared by the Walking Company’s management. The FR remains top amidst the effective foundations of AI regarding this firm (Huber 1990). It is a significant component of the disclosure besides assisting investors to unearth opportunities for investments (Otley and Berry 2010). The initial aim of FS is to give useful information relating to the financial context of the Walking Company, its outcomes of operations, any control alteration in the organization as well as cash flow (Huber 1990).
The Walking Company effectiveness organizationally remains laconically well-defined by the Daft (1983). Daft defined it as the notch to which the business accomplished its goals. Nevertheless, Mondy, (1990) viewed it pertinently as the gradation to which the business generate the output envisioned as appropriately contended by Daft. The organization pursue various goals and these goals have to be accomplished in the eye of competition scarce resources, and disagreement amidst interested cohorts. Orguntimehin (2001) argued that effectiveness of an organization remained the aptitude to generate the outcomes desired.
In the study in 1990, Ponemon and Nagida asserted that the primary motive for which AI is produced s to enhance the process of arriving at rational decisions. Nonetheless, for the reporting (financial) to remain real, it must stay applicable, comprehensive as well as dependable. Such qualitative features requires the information to remain fair and avoid predisposition of favoritism. Accounting information needs to provide a decision maker with the increased capacity for predicting the future practices. It must also augment the knowledge of the users to recognize similarities as well as variations in 2 kinds of information (Huber 1990). Accordingly, dependable AI may be explicated as a critical necessity for the growth of stock market. Developed economies value their respective Stock Markets as well as of financial reporting relevance on the basis of the economic growth engine to discover the potential of the stock market.
The study performed in 2002 by Hunton that examined the connection between Automated Accounting Information system (AAIS) and organizational effectiveness revealed a sturdy link between AIS and organizational effectiveness that implies accessibility to AI will result in effectiveness of the organization (Huber 1990). Various studies relating to the accounting information value for the valuation of equity, share prices as well as earnings forecast have queried the present model of financial reporting used in the advanced economies. This matter has been elevated in the Walking Company regarding the value relevance of accounting information to the stockholders. This has assisted in the current study to determine if the outcome is in agreement or disagreement with the past studies (Pentland 2015).
In the management of the Walking Company as well as the implementation of an internal control system, AIS’ role is essential. A critical query in the context of decisions making relating to accounting as well as management associated with the AIS’ fits the Walking Company organizational needs for the information control as well as communication (Huber 1990). Despite the effectiveness of AIS-generated information in the process of making decision, buying, installing as well as utilizing such a system are only gainful whereby their acquisition costs is below the benefits realized.
The study carried out by Huber (1990) contends that automated AIS helps in decision making for management of the Walking Company. The gains drawn from AIS by the Walking Company might be appraised based on its influence on enhancement of the process of decision-making, accounting information superiority, organization transactions’ facilitation, internal controls, and evaluation of performance. Relating to these five features, the AIS effectiveness in the Walking Company remains exceedingly significant for the Walking Company (Wilkinson et al. 2000).
The primary function of AIS in this Company is to assign quantitative value of the previous, current as well as upcoming economic events (Huber 1990). The AIS via its Contract Plus, a computerized accounting system, generates the useful FS including income statement (IS), cash flow statement (CFS) and balance sheet (BS) (Mondy 1990). The AIS will process the Walking Company’s data thereby subsequently transforming such data into useful AI throughout the framework of input, processing as well as output phases thereby giving information used by a vast diverse of users like internal as well as outside operators (consumers) (Huber 1990). Wilkinson (2000) study acknowledged that an operative AIS executes various important purposes in the entire three phases like data gathering, data maintenance, data AIS alongside Knowledge Management and data control that encompass security besides generation of information.
The primary aim of the current study is to scrutinize the impact of working AIS on the Walking Company’s performance. Whereas the particular activities are: (1)To establish the impact of AIS on Walking Company administrative effectiveness and (2) To examine the manner in which AIS culminate in better decision-making by the Walking Company Managers, the study captured selected the Walking Company as the case study under consideration. The systemic review of the Walking Company data was performed to gather relevant data from the Company’s financial accountants. The following two hypotheses were used: (1) H1: AIS has significant impact on effectiveness of Walking Company and (2), Ho: AIS has no significant impact on the Walking effectiveness of Walking Company.
The study has discovered that AIS is used by the Walking Company management for the analysis as well as monitoring of the Walking Company financial condition and preparation of documents useful for tax purposes (Hunton 2002). The Walking Company is also using AIS to provide information that support the various additional organizational functions including the marketing, production, strategic planning and human resource management. It was discovered from the investigation that without AIS, it will be hard for the Walking Company to determine performance, recognize customer as well as supplier account balances besides forecasting future performance (Huber 1990).
The Walking Company has also been acknowledged to be using the standardized guidelines to record transactions, summarized them as well as present them in the respective financial reports and statements like cash flow and income statement besides balance sheets. It was also noted that the AIS functions do not only for the purpose of financial reports production but also the role extends past traditional perspective (Hunton 2002). The Walking Company has adopted the AIS to bolster its organizational effectiveness.
A positive linkage has been noted between the Walking Company performance and the AIS. The use of AIS in Walking Company has been noted to become more efficient if the firm implements the system with new information systems with the firm’s performance (Ponemon and Nagoda 1990). The use of AIS in the Company is expected even be more productive in the coming years as the firm is investing more to ensure that AIS fits effectively with use of AIS and efficiency of the Walking Company’s performance. It was noted that even though the Company has benefited from the adoption of AIS, its full potential has not been realized due to the mismatch between what the Walking Company requires and services that the AIS offers.
However, the Walking Company stays in the right track as it has raised the need for planning, controlling as well as operating its business in line with the AIS. The Walking Company has subsequently viewed the AIS as that which helps management in such roles as planning and controlling process through the provision of relevant as well as reliable information for the process of effective decision-making (Hunton 2002). The Walking Company has realized the need to stretch AIS to the planning and management of its business activities besides in the control of mechanism like budgeting. Accordingly, the complete embrace of the AIS by the Walking Company remains highly essential for the firm to full hit the benefits of the AIS.
The study has shown that by adopting the AIS in its integrated business operations, the Walking Company’s performance and operations efficiency have increased substantially. AIS is used presently in the Walking Company as a tool that is incorporated into the IT system field for assisting the management as well as control of topics linked to the financial-economic area of the Walking Company (Boulianne 2007). Moreover, AIS has also been used in the Walking Company to provide both actual alongside budget data that has helped the firm to create, plan as well as control its operations. The Walking Company’s wellbeing has subsequently been enhanced through AIS that has ensured good management of resources, effective control of expenditure, budgeting as well as forecasting.
The AIS has also substantially been used in the Walking Company to collect, store as well as process the financial alongside the accounting data that has helped managers of the Walking Company to make effective planning, control as well as evaluation. It has also been viewed in the Walking Company as perceiving of user information satisfaction to both decision making as well as monitoring especially where the firm has coordination besides control with information which is generated from the AIS (Boulianne 2007). It is, therefore, one of the significant element of the Walking Company’s modern information system.
The utilization of the AIS in the Walking Company has surely played a significant role which accounts for the firm’s value added through the provision of internally produced input especially the financial statements, which in turn assist the Company make improved strategic plan. The Walking Company has further exploited the widened ranged besides roles of AIS by making maximum utilization of the AIS to prepare management accounting information to their full potential (Boulianne 2007).
The Company has realized that AIS is an information system that generates large amount of data that is valuable in the process of making decision both internally as well as externally and have subsequently maximized the use of accounting information for job success of its organization. Accordingly, job success for the Walking Company is obtaining reliable, relevant as well as timely accounting information saves to AIS for effective decision making.
The Null hypothesis stated that AIS has no significant impact of the Walking Company’s organizational effectives. The results showed that there remains a positive effectiveness despite the weak correlation (Ponemon and Nagoda 1990). Therefore, a rise in the AIS will culminate in a rise in the Walking Company organizational effectiveness. There is an indication that AIS stays potent factor in the determination of the Walking Company Organizational effectiveness. The model, thus provides a better account endogenous variable of organizational effectiveness on the AIS. The variation in the Walking Company’s organizational effectiveness is accounted for by the quality AIS (Boulianne 2007).
Accordingly, the null hypothesis is not accepted, whereas the alternative hypothesis accepted, and we conclude that AIS has a significant impact on the effectiveness of the Walking Company organizational effectiveness (Ponemon and Nagoda 1990). The same finding was noted by the Borthick and Clark (1990) in their study activity, stating that a given entity will only enhance its output to the desired degrees, when it has remained cognizant of AI supreme significance.
Conclusion
The primary purpose of the present research was to scrutinize the important impact of AIS on the organizational effectiveness of the Walking Company. Based on the study outcomes, it is rationally concluded that AIS has a significant impact on the effectiveness of the Walking Company (Merchant 2011). The investigation discovered that quality AI improves effectiveness of the Walking Company administrative roles (Daft 1983). It also unearthed that AIS culminates to good financial report as well as resulting to better decision-making in the Walking Company. Moreover, the policy insinuation of the current research is for the IASB to embrace quality AIS and subsequently make AIS’ application compulsory on the organizations.
It is recommended in this paper that management of the Walking Company should make even more than currently use of AAIS regarded as the ‘Contract Plus-Financial and Project Accounting’ package in its Finance Department. Such a software shall produce useful financial data useful to be analyzed by accountants and accordingly utilized by top management thereby generating effective and strategic decisions (Borthick and Clark 1990). Thus, such managers could acknowledge the upcoming opportunities as well as shortfalls the company and industry are facing (Choe 2010). Moreover, the Walking Company management need to involve computer-literate and extremely experienced individuals, as well as training them with the recent IT discovered to be effectively competitive by the organization. The government, finally, must establish an enabling environment to permit employees of the Walking Company to obtain training in the utilization of the computer.
References
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