EFFECT OF COMPUTER ON THE ACCOUNTING PROFESSION

(A CASE STUDY OF ASABA ALUMINIUM COMPANY DELTA STATE)

By

AGHOLOR MONDAY

Presented To

Department of Accounting

ABSTRACT

This study deals with the effect of the computer to the accountant. It is carried out to the investigate the various way in which computer affects the accountant as processional.

Some hypothesis were formulated subject to verification.

These hypothesis are

1. Computers does not effect on the accounting profession.

2. Computers does not perform task with maximum speed and accuracy that will make the job of the job of the account staff a lot easier

3. Computer is not an aid to the accountant

The basic ways the computer has being of benefit to the accountant and types and generations of computer were extensively discussed. The problems that are usually encounted as a result of the introduction of computer in accounting and other field were also lighted.

Structurally, this chapter one deals with the introduction of research work. Chapter two deals with the review of related literature drawn from the textbooks, articles in newspapers and Journals. Chapter three deals with the statement of the methodology used for the research study. Chapter four deals with data presentation, analysis and its subsequent interpretation.

From the research of the study, conclusions were drawn and recommendations were made. These were done in chapter five. Due to the extensive usage of technical terms, there is the need for the definition of these terms.

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

Abstract

Table of contents

Chapter one

1.0 Introduction

1.1 Manual data processing system

1.2 state of problem

1.3 objective of the study

1.4 significance of the study

1.5 delimitation of the study

1.6 Scope limitation of the study

1.7 Research Questions

1.8 Research hypothesis

1.9 Definition of terms

Chapter two

2.0 Review of related literature

2.1 a brief history of computer

1.2 Definition of computer

1.3 Types of computer

1.4 Components of computer system

1.5 Varieties of computers

1.6 Functions /uses of computers

1.7 Computer programs / programming language

1.8 Files and files processing

1.9 System analysis and design

1.10 How to match computers and accounting software

1.11 Computer crime

1.12 What is computer fraud

Chapter three

3.0 Methodology of the study

3.1 Method of data collection

3.2 Population and sample size

3.3 Sample design

3.4 Method of data analysis and interpretation.

Chapter four

4.0 Data presentation and analysis

4.1 Presentation of data and analysis

4.2 Test of Hypothesis

Chapter five

5.0 Summary of findings, recommendation and conclusion

5.1 Summary of findings

5.2 Recommendation

5.3 Conclusion

APPENDIX

QUESTIONNAIRE

BIBLIOGRAPHY

CHAPTER ONE

INTRODUCTION

There has been a lot of observations and comments on the effect of computer as it relates to the accounting profession in Nigeria

According to professor Longe "Computers are being used to assist in the management of major areas of the computers are under utilized and in several areas the uses are yet rudimentary"

In the accounting yet rudimentary" story is the same It has, therefore becomes necessary to know the effect of computer on the accounting profession, to determine whether computer does have effect on the accounting professional and perform task with maximum speed and accuracy which will make the job of the account staff a lot easier or they are under utilized, despite the immense benefits derivable from their optimum utilization

With the advent of computer-based accounting system, accountants have to cope with the resulting complexity of the flow of information through the accounting systems Traditional accounting procedures did not accommodate the sophisticated processing devices that came with the computer-based accounting system

As the design of the computer based accounting system advanced from simple clerical automation to complicated integrated information systems, the accountant could no longer perform his duties around the computer but found it necessary to develop procedures to cope with the new challenges

Furthermore, the traditional accountant was not trained in the special languages and devices used in the computer based system Accordingly, a chartered accountant and professional organizations to educate the accountant to functions effecting in a computer based accounting system Therefore in the course of the study Efforts will be made to establish the effect of computer on the accounting profession

Finally, I have the conviction that he efforts expended in this study will be a worthwhile investment This is further strengthened by the fact that this study will serve a springboard and basis for further studies on the relationship between the computer and the accounting profession and other related topics in the future

11 MANUAL DATA PROCESSING SYSTEM

Manual data processing has existed as long as man has walked this planet It continuous to exist today in every organization and is major form of data processing for many small business firms The earliest methods of manual data processing included the use of fingers, stones and stick for counting and knots on a string, scratches on a rock or notches in a stick as record keeping devices The Babylonians wrote on clay tablets with a sharp stick, while the ancient Egyptians developed written records on papyrus using a sharp pointed reed a pen and organic dyes for ink The earliest form of manual calculating device was the Abacus The use of pebbles or ords laid out on a lined or grooved board were early forms of the Abacus and were utilized for thousands of years in many civilizations The abacus in it present form originated in china and still a widely calculator

Manual data processing techniques contributed ot progress over the centuries due to developments such as Arabic numerals, the decimal system, the manufacture of paper, the printing press, the slide rule and double -entry book keeping to name a few Manual data processing systems of today employ tools and materials that have been used for several hundred years such as pencil, pens, rulers paper record keeping, forms, folders and filing cabinets

More recent development which have been tools and materials such as multiple copy forms, carbon paper, accounting pegboards and notched cards

The information system of any organization can include manual data processing systems if information, requirement become more complex and the volume of data increases, mechanical data processing systems become more efficient and economical In manual data processing transactions can be recorded easily in a human-readable form and changes and correction to such systems can easily be made Manual data processing is also quite in expensive at low volumes

The major limitation of manufacture data processing include its inability to handle large volume of work and its reliance on many cumber-some and tedious methods It is also more susceptible to error and slower them other data processing methods because it depends on human effort for most data processing operations

12 STATEMENT OF PROBLEMS

Accounting procedures are naturally complex and are becoming increasingly more sophisticated and so it becomes more necessary wanting to know how computerization has helped in resolving this complexity and also to get to know of it holds any greater promise for the future in the field of accounting There is the need also to know if it hold any risk of aiding perpetrators of frauds in order to weigh its against benefit It also seeks to identify how the personnel conduct their activities in an accounts department without computers and how it is different when computers are introduced " I am quite sure that many people would have been amazed the way computer process millions of inputes at a very short time For instances an IBM system 370/145 model II computer can process a company's journal, Asset register, balance sheet, trial balance, profit and loss Account, Departmental statements, age receivable and customers account receivable approximately in 10 minute, 24 seconds every month"

This recent development in the practicing accountant which has let him to hiring the services of a computer expert for audit purposes Does the computer displace the accountant with a computer scientist?

Sometimes the auditor looks frustrated watching the computer as a fast beas perform the job of an accountant and selfishly stores them on magnetic tapes as invisible magnetized spots In addition to this problems, the electronic accounting systems are usually designed by systems analyst and programs who are in most cases non accounts This makes the accountant a stranger to the system he is to audit, unlike in a manual system

Furthermore, the accounting information processing procedures are stated in computer programs which are written in special computer languages and stored on machine-sensible medium Where on-line integrated systems are in use, audit trail may not be in existence, these make the auditor to be lost in the mist of computer processed data

How can all these problems of the computer be surrounded so as to return accountants and make them offer more qualitative job to the firm and the public in general instead of the computer scientists or economists with computer knowledge These are the problems the study shall be focused at

13 OBJECTIVE OF STUDY

The objective of this study is to:

1 Highlight the importance of computer and it relevance accountants To 2 convince Accountant without previous knowledge of computer programming to take a course on computer programming in order to combine their accounting experience with their knowledge in computer operating to make the computer always be under their absolute control

3 In pursuance of his duties, the auditor may come across accounting statements prepared by a computer, especially by large business organization Thus, the auditor also needs to lean about computer programming

4 To provide a guide for organization that need to understand the benefit of computers

5 To provide a resource material for accountants and students of the profession relative to the advantage of computers

6 Identify the major areas of computer application in accounting

7 Establish the various forms of accounting operations in which computers could be utilized

8 Highlight the unexplored potentials of the computer necessary for the efficient and smooth operation of the commercial banks as far as customer services are concerned

9 To encourage a continued investigation of the relevance of computers in the financial sector of the third world countries

10 Finally to emphasize that computer is o way a threat as thought by non professionalism but rather an aid to the accountant, as it enables him perform his accounting duties quickly and accurately

These are the points the research will focussed on the effect of computer on the accounting profession ( a case study of Asaba Aluminium company, delta state)

14 SIGNIFICANT OF THE STUDY

This study "Effect of computer on the accounting profession ( A case of the Asaba Aluminium company, Delta state) will educate the entire public how computer aids the accounting profession

The world is fast turning into a global village with the rise of satellite communication, the internet and specialized software in very competitive financial environment This study is significant in that it mains at increasing the awareness of our leverage on computerization If the company's financial market must be further opened and stay competitive and profitably so, the computer technology might just hold the key

In recent times, there has been increased demand in the knowledge and application of the computer for processing data This has become necessary in the face of unique position that computer occupies today in organizations with which most calculations and data processing are handled

Such a lot of the accounting boarder-some processing large volumes of data, there is need therefore, to find out in the study the various benefits associated with the use of computers in accounting

The study will not seek to justify the huge amount invested in computer, but also try to show the reward and meaningful development or improvements in terms of times saved, less clerical and laborious manual entries from the use of computers than any other mechanical automated machines

As immediate and future computer users in this company, accountant need a basic understanding of computers and how they can be applied to the management and operations of a business enterprise Therefore, they need to be introduced to the fundamentals of computers and electronic data processing, wide range of hard-ware and soft-ware that process of computer programming and the "high level programming languages that are utilized by the computer-using business firms However, and more importantly they need the basis concept

1 System analysis and design

2 Management information system

3 Computer - application in business and

4 The management of the computer

Computer is significant as we find out that he many uses of computer have something in common, looking at other fields now, including accounting, there are various way in which computers are sued Some of the computer application are:

- Department store credit accounting

- Banking telephone dealing assistance

Inventory control, crime prevention, analysis of construction specifications payroll calculation industrial process control, space light, projection of fashion trends, theater and air line ticket reservation, insurance, securities brokerage accounting assistance in education, modeling and simplification, library cataloguing and retrieval, monitoring status of hospital patients, matching job applicants, urban traffic control warfare, artificial intelligence ashology, art and music

Behind all these storage and manipulation of data is the need to communicate ideas to produce a certain image in the mind of a person, or to inspire a person to act in a certain way

For instance, a banker could decide to approve a loan simply on the basis of a credit report produces by a computer

15 DELIMITATION FO THESTUDY

This study "the effect of computer on the accounting profession is structure to

1 Focus on the introduction of computers and their application into accounting operations in an organization

2 To highlight the benefit offered by such application and weighing it with the risks associated with these application

3 It is not an attempt to discuss accounting software perse, but to show how their use can accelerate the operation of accounting procedures and enhance the assignment of the accountant as professional

16 SCOPE AND LIMITAITONFO THE STUDY

This topic, Effect of computer on the accounting profession (a case study of Asaba Aluminium company, delta state) should have covered the Aluminium company indifferent state, but it is due to some unavoidable constraints some of which include;

1 TIME: Time limit set for the compute completion of the work That is this study is carried out under a limited time Having to cope with assignments to lectures here and there, course work and examination was not an easy task especially having to measure up with the high standard of the department in particular, there by reducing, the physical and mental contributions which I would have wished to put into the study

2 FINANCE: This constant was the most serious of all It restricted the number of journeys made to my research centre to collect data which led to narrowness of the scope of the study

3 INADEQUATE FACILITIES IN THE LIBRARY: inadequate facilities in the library such as modern textbooks, journals, news magazines and other materials almost thwarted the effort of the researcher These materials are supposed to be a pre-requisite for successful project work

1,7 RESEARCH QUESITONS

The analysis of this problems of this research work will raise certain important questions which the researcher intend to prepare to answer

1 What are the efffect of computer on theaccounting profession in Asaba Aluminium comcpany?

2 Has the inventions of computers led to job creation or job displacemnt of accountants?

3 Does computer increase the job shill and marketability of accountant?

4 Is computer an aid to the accountant?

5 If yes, what are the needs and wants that are now being satisfied in this company?

6 Does the maximum speed and accuracy of computers make the job of the account staff a lot easier?

18 RESEARH HYPOTHESIS

Ho: there is no effect of computer in the accounting profession in Asaba

Aluminium company

Hi: There is effect of computer in the accounting profession in Asaba Aluminium company effect of computer in the accounting profession in Asaba Aluminium company

Ho: computer does not perform task with maximum speed and accuracy that will make the job of account staff a lot easier

Hi: computer perform task with maximum speed and accuracy that will make the job of the account staff a lot easier

Ho: Computer is a threat to the accountant

Hi: Computer is an aid to the accountant

19 DEFINITION OF TERMS

(A) COMPUTER: computers are electronic machines which under programme controls, can accept data, process the data and give out accurate information with regard to that set of data

(B) PROGRAMME: is a set of instructions which feel a computer in logical sequences on how to solve a given problem These instruction are written by programmer

(C) ACCOUNTING SYSTEM; is defined as the collection of method basis and principles adopted by an organization for the preparation of its financial statements to satisfy the need of the users

(D) OPERATING SYSTEM: the permanently held programmes which control the sue of applications programmes and provide standardized facilities to the facility

(E) HARDWARE: this refers to the six physical element making up the computer eg backing storage, arithmetic and logical unit, immediate access stores, input device, output device and control unit

(F) SOFTWARE: these are programmes that inject life if not systems or set of instruction and data which feeds the computers hardware with what actions to take

(G) MAIN FRAME COMPUTERS: these are large general purpose computers with extensive processing storage and input and output capabilities

(H) MINI-COMPUTERS: these are physical small compare with main frames and tends to be used for special purposes or small scales general purposes

(I) MICRO COMPUTERS: these are relatively low cost computers used by a single user

(J) ON-LINE: These refers to the peripheral devices or equipment that are in direct communication with the central processing unit of the computer It is the opposite of off line

(K) SYSTEM ANALYSIS: it is the process of studying the operations of an organization with the intent of defining data processing problems and designing a system that can be applied to the computer

(L) COMPUTER PROGRAM: A computer program is a set of computer instructions which are sued for solving a specific problem