University Of Zimbabwe

Course Name and Code Business Research Methods (BS216)

Lecturer Mr. A Zimhunga
Research Topic An investigation on the adoption of
computerized accounting systems in by
small firms in Zimbabwe

Due Date 13 October 2018

Degree Program HACCO
Name Registration Number
1 Shito Sandra K R179222H
2 GamuTinotenda R179241X
3 ShamhuEbenezzar R179336H
4 Kapita Melissa T R179169T
5 Mukumba Fleming T R179427X
6 Sibanda Gladys R179270Z
7 Zibako Tafadzwa J R179148C
8 Kapamba Kudzai R1712114
9 Godfrey Honamombe R164493A
10Braine Nhepera R179829G

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 CHAPTER 1

1.1Introduction

Day by day small firms are hiring accountants to manage their accounts properly with some
small firms who cannot afford to employ or hire an accountant resorting to use of a single entry
ledger where one side of the transaction is present, the system records all transactions relating to
the firm only, such as transactions with particular creditors or debtors and neglects all the
impersonal transactions. The system neglects the dual aspect concept, which forms the proper
accounting system (Maseko &Manyani, 2011). Computerized Accounting Information Systems
such as QuickBooks and Sage Pastel are available which can do accounting the proper way in a
less hassle way. Small firms are slowly adopting automated Accounting Information Systems in
their operations which is a probable cause for the sudden collapse of other small firms.

1.2Background of Study

The development of small firms in Zimbabwe has attracted the government’s attention since they
are the backbone of the economy of Zimbabwe. Technological advancement has resulted in a
shift in the way businesses conduct their operations and as such the effect of computerized
accounting information systems cannot be ignored (Mitchell et al. 2000). Individuals and
companies day by day hire accountants to help them carry out the mathematical requirements of
accounting and balancing of books. Before the introduction of information technology into
accounting, these accounting protocols were being performed manually. However, today many
accountants and non-accountants like to use computer software to perform these duties,
(Osmond, 2011).

Business owners use accounting to record, report and analyze their company’s financial
information and in doing this, companies often generate several pieces of financial information
from business transactions, and compile this information into general ledgers and journals,
(Osmond, 2011). Historically, accounting was a manual process using paper books and
documents for financial information. Business technology has created significant advances in the
area of financial management and accounting software. The challenges that small firms face in
adopting computerised AISs become the bottleneck for their development as they lack financial

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assistance so that they can be able to acquire AISs. And also lack of organizational preparations
in small firms caused by low extent of formalization of people’s roles and responsibilities that is
shown by their continuous rearrangement of positions and consequently it becomes difficult to
adopt AISs.

1.3 Problem Statement

As information technologies grow more progressively, the manual accounting systems have
become gradually inadequate for decision needs. The major challenge in the manual accounting
system is that processing of accounting information takes a very long period of time. There is
also huge labor cost, in terms of salaries and its related cost. The manual accounting system
makes transactions very dull, cumbersome, and unpleasant; manual maintenance of accounts is
quite tedious and consumes a lot of time. These are the problems associated with manual
accounting systems though it has benefits too, ledgers can be received easily and the accountant
can incorporate simple changes if needed. The other benefit is that the accountant can physically
handle any ledger and make notes against customer account if there are any issues needing
correction or clarification.

In recent decades many organizations have started to adopt the computerized accounting system
due to its significance and to cope with technological changes. Empirical evidence, suggest that
global organizations are adopting accounting systems, but this is not so in Zimbabwe. Therefore
the aim of the study is to address the gap by assessing the adoption of computerized accounting
system by small firms in Zimbabwe.

1.4Research Questions

i. What are the uses of computerised accounting systems?

ii. What are the pros and cons of computerised accounting system over manual accounting
system?

iii. Which strategies can be used to improve the adoption of computerised accounting system by
small firms in Zimbabwe?

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1.5 Research Objectives

i. To determine the use of computerised accounting systems.

ii. To analyse the cons and pros of computerised accounting systems over manual accounting
systems.
iii. To establish the strategies that can be used to improve the adoption of computerised
accounting systems by small firms in Zimbabwe.

1.6 Research Hypothesis

Small firms in Zimbabwe are reluctant to adopt computerised information systems.

1.7Justification of Study
The study of adoption of accounting systems by small firms in Zimbabwe will broaden up the
existing literature in similar areas of study. It will serve as a stimulant and stepping stone for
future researches by other academics and scholars through suggesting areas where further studies
need to be conducted within the field of computerized information systems. The study will also
encourage small firms to implement these systems in their business transactions. This will lead to
a transition from manual systems which include storing records in books to computerized
systems such as Pastel system which provides objective and integral information which will
enhance decision making and increase profit margins for small firms. Moreover, the research
will help small firms in Zimbabwe to implement use of computerized systems which have an
advantage of saving time in data capturing, as well as costs, for example, costs of employing data
capture clerks. The research findings will also enhance small firms’ capabilities to build
mechanisms that enable them to increase the quality of presentation of their books of accounts
such as budgets. The research will be prime benefit to small firms in Zimbabwe as it will enable
them to understand the risks and problems that are associated with adoption of these
computerized systems as well as how best these problems can be combated. The study will help
small firms to survive in the competitive market. The study will help small firms in Zimbabwe to
increase their operational efficiency leading to an improvement in the economy’s gross domestic
product.

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 CHAPTER TWO

2.0 LITERATURE REVIEW

Theoretically, AISs are known to improve a firm’s effectiveness and efficiency. The current
literature reveals little research evidence about accounting information systems in micro
enterprises in developing countries. In support of this, Mitchell and Reid (2000) suggested that
researching AISs in the micro enterprises has been almost non-existent with only a relatively few
research studies. Furthermore, Randall and Horsman (2001) indicated that AISs has been
neglected in the small enterprise literature, despite its importance to business success. Yet, while
large businesses have been using computers for some time, small firms have been slow in
adopting this technology innovation. This slow adoption is a critical issue because small firms
play a paramount role in enhancing the Zimbabwean economy.

2. 1Theoretical review

2.1.1 Accounting

As many professional accountants and auditors state, accounting is a language of business which
is accepted in all developed and developing countries. Meigs and Meigs (1986) also
defineaccounting as the art of measuring, communicating and interpreting financial activities.
Accounting can be divided into two basic categories which are manual accounting and
computerized accounting systems. Both manual and computerized systems are based on the
same principles, conventions and concepts of accounting.

2.1.2 Computerised Accounting

Marivic (2009) describes a computerized accounting system as a method or a scheme by which

financial information on business transactions are recorded, organized, analyzed, summarized,
interpreted and communicated to stakeholders through computer based packages. Heemphasised
that it is a mechanized process of facilitating financial information inflows as well as automation
of accounting task such as database recording and reports generation. A good computerized
accounting system has easy to use inputs, pricing and supply side services.

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According to Chun(2006) and Linlin (2001)computerized accounting information system are
characterized by calculation tools to reduce human arithmetic errors ,code based data process to
reduce data input errors which can lead to garbage in and garbage out .Furthermore, use of
coding system to shorten length of data and reduce storage space has led to many firms to
adoption of computerized accounting information system instead of manual system which tend to
be slow, prone to human errors and massive data stores which require huge storage space.

2.1.3 Importance of Computerised Accounting Systems

According to McBride (2000), computerized packages can quickly generate all types of reports
needed by management, for instance budget analysis and variance analysis. Data processing and
analysis are faster and more accurate and meets the managers’ need for accurate and timely
information for decision making. Wood (1999) consented to the speed with which accounting is
done and further added that a computerized accounting system can retrieve statements of
financial positions, income statements or other accounting reports at any moment. He further
consented that computerized accounting system allows managers to easily identify and solve
problems instantly.

McBride(2000) and Wood(1999) were supported by Indira(2008),and he pronounced the

improvement in business performance as a result of computerization of the accounting systems
as it is a highly integrated adoption that transforms the business processes with the performance
enhancing features which encompass accounting, inventorycontrol, reporting and statutory
processes. Indira (2008) suggests that, computerised systems helps the company to access
information faster and takes quicker decisions as it also enhances communication. McBride
(2000) also added that managers cannot easily satisfy statutory and donor reporting requirements
such as statement of comprehensive income, and customized reporting without using
computerized accounting systems. With the system in place, this can be done quickly and with
less effort.

In the same dimension with McBride(2000) and Wood(1999), Carol (2002) added that it is easy
to do accounting functions using computerized accounting systems than manual systems. Posting
transactions to the ledger, the principle of double entry can largely be automated when done

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through the use of computerized accounting systemand record relevant financial data to provide
this type of information and documentation during auditing.

Western countries are convinced that the society which switched to computerized accounting
system will result in economic and social benefits (Audenhove 2008). The author quoting
Organization for Economic Cooperation and Development, notes that information infrastructures
are expected to stimulate economic growth, increase productivity, create jobs, and improve on
the quality of life (Heeks, 2007). Heeks (2007) further observed that there is a big difference
between computerized implementation and use between developed and developing countries.
However, Westrup (2008) observed that similarities can also be expected. These similarities
include funds which are never sufficient, bureaucracy and user needs. The difference is how
problems are solved.

2.1.4 Factors affecting the adoption of computerised accounting systems

Using a computerized accounting system comes with its own set of problems which affect its
adoption by many small firms worldwide, such as the need to protect against data loss through
power failure or viruses, and the danger of hackers stealing data. Computer fraud is also a
concern, and the user needs to instigate a system of controls for those who have access to the
information, particularly customer information. If there is a security breach and data is stolen,
management can be held personally liable for the loss of data (Hall 2008).

Romney and Steinbart(2015) added that computerized accounting systems do not fully
strengthen financial management functions. Most units of computerized accounting systems are
used to replace the manual and this alleviates the burden on the accounting staff such as
recording transactions and producing reports. This allows them to pay attention to
reimbursement functions

2.2 Empirical studies

Computerized accounting system is becoming popular among organizations nowadays across the
world.Many surveys have been made to estimate the growth of computerized accounting system
in various countries. There are various studies on the adoption of computerized accounting

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systems in developing countries across the world, reviewing literature along those lines will give
us an insight of the similar factors which affect adoption of AIS in Zimbabwe

Malik and Khan (2009) conducted a study which they aimed at understanding the
Implementation of an Electronic Hospital Information system in a developing country: A case
study from Pakistan results showed that the common challenges may include poor electricity
supply, lack of computer infrastructure, insufficient and unsustainable funding and inadequate
education.

Alshebeil (2010) aimed to identify the role of accounting information systems in achieving
competitive advantage for commercial banks in Tanzania , and his findings were that there is a
statistically significant impact for accounting information systems on achieving the dimensions
of competitive advantage. Alshebeil (2010) studies was supported by Amveko (2011) in which
she aimed to identify the impact of computerized information systems on financial reporting, the
financial reports generated conform to some quality attributed of good financial information.

In the same dimension with Amveko(2011) and Alshebeil(2010), ElDalabeeh (2012) aimed to
identify the role of computerized accounting information systems in reducing the costs of
medical services in hospitals, and his findings were that computerized accounting information
systems play an important role in reducing the costs of medical services in hospitals compared
with non-computerized systems, which usually require bigger costs and do not contribute to
reduce the costs of medical services.

2.3 Conclusion

Since many of these studies were done in countries other than Zimbabwe ,with obvious cultural
and environmental difference as well as contrasting findings, it becomes necessary for a similar
study to be carried out in Zimbabwe.

CHAPTER THREE

3.0 METHODOLOGY

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3.1 Introduction

This chapter provides an in-depth analysis of the methods that are to be employed in this
research study to gather information. It also provides an analysis of the research design, sampling
population and data collection methods to be employed in investigating the adoption of
accounting information systems by small firms in Zimbabwe.

3.2.0 Research Design

In carrying out a research, a researcher may make use of primary sources of data or secondary
sources to make inference to the research findings. Primary data is first hand data obtained from
the original source and can be obtained from various sources such as surveys.

3.2.2Survey

This is where a sample of subjects is selected from a population and then used to make inference
to the entire population. By using surveys to investigate the adoption of accounting information
systems by small firms one may select a few small firms and carry out a research on the current
systems they are using and how these firms would view the adoption of accounting information
systems to improve their efficiency and accountability. The researcher would also need to
formulate proper survey questions to be used in carrying out the research.The researcher will use
surveys because it is cheap and there is convenient data gathering. Surveys are also ideal for this
research because they provide all the participants with a standardisedstimulas. With such high
reliability obtained, the researcher’s own biases are eliminated.

3.3.0Data Collection Methods

Data collection is the systematic approach to gathering and measuring information from a variety
of sources to get a complete and accurate picture of an area of interest. Data collection enables a
person or organisation to answer relevant questions, evaluate outcomes and make predictions
about the future. Quantitative (statistical) data is going to be collected through the use of
questionnaires and also qualitative data is going to be collected. First hand or primary data will

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be collected using a semi structured questionnaire that will be developed by the researcher on
research questions basis.

3.3.1Questionnaire

This is the main instrument for obtaining useful information from several respondents. A
questionnaire is the most common technique used since it is cheaper and faster to administer. In
analyzing the adoption of accounting information systems by small firms in Zimbabwe,
structured questionnaires can be distributed to various employees who work for small firms so
that they fill out these with their responses on how they view the adoption of accounting
information systems in their firms.The reason for using questionnaires is because they cover large
sample at low cost, and gives respondents adequate time to give well thought-out answers

3.3.2 Interview

An interview is a set of question administered through oral or verbal communication or is a face

to face discussion between the researcher and the interviewee respondent. Interviews enables the
researcher to get supplementary information obtained by using questionnaires.

3.4 Population Study

A population is the collection of the entire elements under study in order to draw some
conclusions. In this case, the population understudy comprises of registered small firms
operating in Zimbabwe.

3.5 Sample

A sample is a finite part of a statistical population whose properties are studied to gain
information about the whole. When dealing with people, it can be defined as a set of respondents
(people) selected from a larger population for the purpose of a survey. The researcher will use
Judgmental or Purposive sampling technique, where by the researcher chooses the sample based
on Accountants and Cashiers. This method is used primarily when there are limited numbers of
people that have expertise in the area being researched.

CHAPTER FOUR

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4.0 DATA ANALYSIS

The researchers will use both qualitative and quantitative data analysis.The researchers will use
qualitative approach in analyzing data which is more interpretive as it focuses on understanding
the content of non-numerical data. In this case, explanatory data analysis technique will be used
to draw conclusions to support or reject the hypothesis basing on the information collected.

After quantitative data have been collected from a representative sample of the population, the
next step is to analyze them to answer our research questions. However, before we can start
analyzing the data, some preliminary steps need to be completed. These help to ensure that the
data are accurate, complete, and suitable for further analysis. After data are obtained through
questionnaires, they need to be coded, keyed in, and edited. That is, a categorization scheme has
to be set up before the data can be typed in. Then, outliers, inconsistencies, and blank responses,
if any, have to be handled in some way.

Data is going to be presented by use of tables, graphs and pie charts. These will aid in the
reading, understanding and summarizing findings of data. Analysis of data will be done through
statistical methods such as regression and correlation analysis and the use of hypothesis testing in
order to deduce meaningful conclusions on the variables understudy.

CHAPTER FIVE

5.0 CONCLUSION

In a business world of a financial nature, daily financial operations have reported several
weaknesses such as errors and intentional figure manipulations being common to financial
reports generated through the manual accounting system. It is therefore, significant to carry out

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this study so as to find ways to increase adoption of computerized information by small firms
systems in Zimbabwe.

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