THE IMPACT OF INFORMATION TECHNOLOGY IN MANAGEMENT ACCOUNTING SYSTEM
(A CASE STUDY OF UNILEVER NIGERIA PLC)
1.1 BACKGROUND OF THE STUDY
Before now, business Success was built on the ability to move goods and services with speed and accuracy. Today, information has become the fuel that powers business Success .In contemporary Cooperate world, information technology is deployed to gain competitive edge.
Information technology has been defined as the processing and distribution of data using computer hard ware, software, telecommunication, and digital electronic (Encarta Encyclopedia: 2004).
Therefore it is now obvious that computer component of information technology can no longer stand alone without the combination of other component. However, management planning and control responsibilities are also par amount to a successful enterprise and they represent a mandatory of an Organization to progress and survive in today highly unpredictable and competitive business environment. The projected plan of operation must be decisive and dynamic timely, intelligent planning must be predicated on current known fact and a thorough analysis and realistic approach to inevitable Feature probabilities .These key requirement for planning directions will lead to Business probability and an equitable return on investment, which are the objective of a successful management.
The techniques and mechanical tools required to accomplish the development of planning and control objective are now available, but in many instances, appropriate management organization, interest and progression in fully acknowledging their utilizations unfortunately lacking. This is a dilemma that must be overcome.
In addition, management control system must not be overlooked. It comprises; the plan of an organization and all of the Coordinates methods and measures adopted within a business safeguard its assets check the accuracy and reliability of its accounting data, promote operational efficiency and encourage adherence to prescribe managerial policy.
In other word, it could be regarded as whole system of control, financial and otherwise, establishment by the management in order to carry on the business of the company or organization in an orderly manner, safeguard its assets and secure as far as possible measures. The accuracy and reliability of its record for planning measurements for performance and control purpose.
Information technology is the technology used for study, understanding planning, design, construction, testing, distribution, support and operation of software, computers and computer related system that exist for the purpose of data, information and knowledge processing.
Another definition of the information technology (IT)is the industry has evolved include the study science solution set for all aspect of data, information and knowledge management, processing.
THE COMPANY UNDERSTUDY
Unilever (formerly known as lever brother) Nigeria plc (Rc113) is the largest surviving manufacturing outfit in Nutria. The company in cooperated as a private company in 1923 (as lever brothers Nigeria plc) to manufacture soaps based on local palm oil. The company Strengthen it foot hold in the food and drink business by merging with Lipton Nigeria limited in July (1985) and also merged with chase brought products industry in December (1988) to become a giant in personal product business.
In accordance with Nigeria enterprises promotion degree of 1972and 1977, 40% of the company equity is held by Nigeria citizens and institution, while the remaining 60% is held by Unilever overseas holding limited , Lipton tea company limited and chase borough product international limited.
Today Unilever Nigeria plc is a leading company in the industrial sector, engages in the manufacturing and marketing of wild range of household product.
1.2 STATEMENT OF PROBLEMS
- Management will often worry about the cost(financial and social) of putting computer based system for processing accounting data and generating accounting information.
- incident of computer fraud.
- Problems that may be associated with real time online operations.
- Errors of input (garbage in garbage out) (GIGO)
- Problems of system errors.
- Problems that may be associated with the applications of computer based audit procedures.
1.3 OBJECTIVES OF THE STUDY
Sequel to the problems highlighted above, the main objective of this research study is to determine whether information technology improves management effectiveness by affecting business strategies.
The research study were identified as follows:
- To ascertain whether or not accountant efficiency contributes to organizational growth with the information technology deployed.
- Determine whether information technology improves management effectiveness by satisfying information needs or not.
- Prove that information technology improves competiveness by affecting business.
- Determine the organization experience with the effect of information technology on accounting process.
- Access the role of training in charge management and justification as measured from the accounting perspective.
- Ascertain whether information technology improves business efficiency by automating basic information needs or not.
- To emphases on the current development of information technology and the challenges such pose to accountants in an organization
1.4 RESEARCH QUESTION
In any question to carry out this study towards finding out true position of accountants efficiency in conversant with the information technology deployed by an organization as an input to the business success.
It is very important to delve into the following research question.
- Is introduction of information technology in Unilever Nigeria plc improving accountant‟s performance?
- How does information technology in Unilever Nigeria plc affect the profitability in financial reporting?
- Does the organization embark on training the accountant in other to accommodate the change
- What are the peculiar problems faced by Unilever Nigeria plc in implementing information gathered from its information technology.
1.5 HYPOTHESIS OF THE STUDY
With respect to the statement of the study, the hypothesis below can be deducted.
H0: there is no relationship between the introduction of information technology and the
efficiency of the accountants on Unilever nigeria plc.
H1: there is relationship between the introduction of information technology and the
efficiency of the accountants on Unilever Nigeria plc.
1.6 SIGNIFICANCE OF THE STUDY
The research study is primarily meant for accountants and multinational companies. Then the continent, will guide the organization manufacturing sector with large scale production of different home use product and how accountants can cope with current development in information technology and the importance in organization.
The research study is also significant to manager and the authorized personnel (accountant or IT professionals) to have the knowledge that the main threats to information technology in an organization are human beings.
Information technology facilities can be manipulated to commit fraud.etc. The human threats to information technology includes insiders, hackers and phone freaks etc. the detailed operating plan involves the manipulation of a mass data in other to support a valid plan that will fulfill the requirements of managements appraisal task to determine operational directions, make resolutions decisions and assures adequate performance measurement criteria in light of the information system utilization.
Hence managers and accountants would be better equipped to handle various related problems.
1.7 SCOPE OF THE STUDY
In the course of this research works, the researcher encountered some restriction which militates against the smooth execution of his work among these issues are :
- Unilever is a multinational companies with several subsidiaries under it which had incapacitated the researcher of getting some of their transactional data for the research methodology due to the secretiveness of the sampled population.
- The problem of retrieval of research instrument administered, finance, combining my official work which makes it always difficult for me to go out always not to do anything personal.
- Other limitation include time constraint, cost of carrying out research work and unsupportive nature of respondents.
1.8. LIMITATION OF THE STUDY
In this study the impact of information technology on accounting system, the research is limited by time. Though this research ought to be very broad and all embracing the research is limited by time to go that far and treat this exhaustively.
The study was also limited by secrecy of information in the company, which requires permission of the company higher authority hence most information was regarded as classified information.
Despite these limitations, the project work will be useful to any person that wants to know about the impact of information technology on accounting s y s t e m.
This research though is expected to be very broad and all embracing, it is limited to the impact of information technology on accounting system and this is due to the fact that this is the researcher main concern at the moment.
- DEFINITION OF TERMS
- Data :these are any non-random set of symbols they are also called raw files o facts, event, transaction, which have been recorded and they are the input raw materials from which information is produced Information: in this research the use of information will signify data have been produced in such a way as to be useful to recipient.
- Application package: this is a set of programs together with the appropriate system documentation. The package is designed to meet the needs of a number of users and is modular in construction so that a limited amount of modification can be carried out to carter for the needs of individual business.
- MIS: management information system is the provision of information for all level of management in order to perform their routine functions such as planning, directing, organizing and controlling etc.
- Database: data base is a stored collection of related data needed by organization and individual to meet their information processing and retrieval requirement.
- Internet: internet is an international computer network made up of numerous networks, internet is also called “networks of networks”
- Ethernet: Ethernet is a popular network protocol and cabling scheme that uses a bus topology and carrier sense multiple access/collision detection (CSMA/CD) to prevent network failure or collisions, when two devices try to access the network at the same time.
- Intranet: this is a private network belonging to an organization (which was internet protocol) it is used in Unilever Nigeria plc .it is accessible only by member of the organization require authorization to access such network (this is called an Extranet).
- 9. E Business: this is the use of internet in the conduct of business.
- Extranet: this is an intranet that allows non members of the organization to access the network.
- Wireless network: wireless network are wide area network (WAN) ,that allows user to access information instantly via handheld wireless device.