The Role Of Computerized Accounting System In Financial Reporting; A Case Of Kapchorwa District Local Government

TABLE OF CONTENTS

Cover Page

Title Page ii

Declaration iii

Approval iv

Dedication v

Acknowledgement Vi

Table of Contents vii

List of Figures

List of Tables X

Acronyms and Abbreviations xi

Abstract Xfl

CHAPTER ONE: GENERAL INTRODUCTION

1.0 Introduction 1

1.1 Background to the Study 1

1.2 Problem Statement 4

1.3 Purpose of the Study 5

1.4 Objectives of the Study 5

1.5 Research Questions 6

1.6 Scope of the Study 6

1.7 Setting of the Study 7

1.8 Significance of the Study 7

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1.9 Definition of Key Terms .9

CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction 11

2.1 Computerized Accounting Systems 11

2.2 Financial Reporting 23

2.3 Computerized Accounting Systems and Quality of Financial Reports 26

2.4 Reasons for Computerizing Accounting Systems in Local Governments 28

2.5 The influence of Computerized Accounting Systems on Financial Reporting 30

2.6 Conclusion 31

CHAPTER THREE: METHODOLOGY

3.0 Introduction 33

3.1 Research Design 33

3.2 Study Population 33

3.3 Sampling Size 34

3.4 Sampling Methods 35

3.5 Data Collection Procedure 36

3.6 Data Collection Methods 36

3.7 Data Collection Instruments 36

3.7 Validity and Reliability 37

3.8 Data Management and Processing 37

3.9 Data Analysis 38

3.10 Limitations of the Study 38

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ABSTRACT This study was designed to find out the role of computerized accounting system in financial

reporting in Kapchorwa District Local Government. It was specifically intended to identify the

reasons as to why Kapchorwa District Local Government has computerized its accounting

systems, to determine how computerized accounting system has improved on the quality of

financial reporting, and to examine the influence of computerized accounting systems on

financial reporting. The researcher employed both qualitative and quantitative research designs

with a case study and a sample size of 50 respondents. Both primary and secondary data was

used and the data collection methods included use of questionnaires and interview guides to

collect in depth information; they contained open ended and closed questions and data was

analyzed using SPSS. This was used to describe newly generated information about

computerized accounting system and its role in financial reporting. The respondents included;

Chief Administrative Officer, Chief Finance Officer, Accountants in the accounts department,

health department, production and personnel, chief internal auditor, etc. The study established

that computerized accounting system has great impact on the quality of financial reports and that

many financial statements were generated through the computerized accounting system. The

findings shows a strong significant positive relationship between the variables (r=0.861**,

p>O.Ol) which implies that computerized accounting system and financial reporting at

kapchorwa district local government are strongly related. This study also established that though

most literature focuses on total transformation from manual to a computerized system, given the

risks and disadvantages associated with computerized systems, there is need to use the two

systems alongside each other. The study recommends that in order to achieve the proper use of

the technology, there should be training of staff, mandatory regulations to all local governments,

appraising of staff, building of relationships, routine maintenance and internal reviews. The

study thereof concludes that computerized accounting system is of great importance to the

running of the organization but is also associated with its own weaknesses that hinder efficiency

in the organizational environment. A continuous culture of utilizing a computerized accounting

system is also recommends.

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