University of Luzon
COLLEGE OF ACCOUNTANCY
Dagupan City
Chapter II
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter renders the review of materials that materially gauged
the conceptualization of this study which is deemed relevant for this
paper to provide an understanding of the discussions and consideration
of findings. Since this study deals with the SAP Accounting Software
Utilization of Yokohama Dagupan City Branch, literatures were derived
from varying books, journals, newspapers and other related studies and
educational links on the internet available for relating into the topic at
hand.
Conceptual Literature
This section of the study presents related literature pertaining to
articles or books written by authorities giving their opinions, experience
and ideas.
Status of implementation of the automated accounting information
system of Yokohama Dagupan City Branch in terms of the following
sector:
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COLLEGE OF ACCOUNTANCY
Dagupan City
The use of a computerized accounting system can help small and
medium-sized businesses improve their financial reporting. When
compared to other industrialized and emerging countries in Asia, it
appears that small and medium entrepreneurship has difficulties
providing financial reports utilizing a computerized accounting system.
Furthermore, this research is based on a survey of small and medium-
sized businesses to determine the extent to which computerized
accounting systems have been developed and implemented, as well as an
analysis of how much this introduction may impact improvement in
outcome indicators and productivity.
It emphasizes the usage and benefits of accounting software by
accountants in various SMEs. Further, it would be useful to suggest that
SMEs and such other types of organizations adopt customized or
generalized accounting software that will enhance the practice among
accounting professionals. The literature aims to determine the influence
of knowledge and use of accounting software among small and medium
entrepreneurs or in other companies, ICT has been considered as major
aspect of effective and efficient accounting system and which can lead to
increase organizational performance. The source is somehow useful for
the researchers in knowing more how knowledge and use of accounting
software affects a certain entity (Thotolli M, 2020).
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COLLEGE OF ACCOUNTANCY
Dagupan City
Convenience
Information system is a set of interrelated subsystems that work
together to collect, process, store, transform, and distribute information
for planning, decisions making and controlling (Pol & Lim, 2013). The
use of computer in information systems can improve the efficiency of
information collection, process, store, transform and distribute.
According to Norther Ireland (2019) using accounting software can
help you save time and money, and offer you valuable insight into your
business. If you choose the package carefully, investing in a
computerized accounting system can be one of the best decisions you
can make for your business.
Accessibility
Accounting software has transformed how financial records are
stored and accessible. It is far faster and more accurate than traditional
ledgers and journals. You can define who has access to what information
using automated accounting software. It also keeps track of who
accessed the data and when. The organization can specify exactly what
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COLLEGE OF ACCOUNTANCY
Dagupan City
they can and cannot see and allow them to make changes to specific
fields while merely seeing others.
According to iNECTA (2018) allowing customers to access their
accounts online, through your accounting software, you will save a huge
amount of time in dealing with account queries and issues while
improving the customer experience at the same time. Allowing suppliers
access to information relevant to their business with the company will
also streamline the process, reduce queries and save time.
Reliability and Data Quality
Most of the major software programs make using the program
simple. The math is accurate and reliable, so a business owner can
accurately determine available funds at any time.
According to infoworld (2019) The power of connectivity in
businesses can be well established with enhanced features provisioning
greater flexibility in businesses to unleash power of accounting. The
complete business software management has capabilities to enable
management of various aspects of business. This encompasses the
inventory, taxation, payroll and advanced accounting. The focus for
business can be associated with growth. Tally has been a preferred
business solution which has been offering capabilities to manage
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COLLEGE OF ACCOUNTANCY
Dagupan City
businesses. Capabilities of Tally ERP have enabled businesses to aspire
for accelerated growth. While unique features and capabilities of Tally
ERP have been well commended amongst users, reliability tends to be a
constraint.
Data quality is important in today's business processes since it
refers to the set of data that is fit for use by data consumers, or those
who access, understand, and use data as part of their job. Data quality,
on the other hand, is critical to the performance of Accounting
Information Systems (AIS), which is a computer-based system that
processes financial data and supports internal decision-making
processes.
Ali, Bakar and Omar (2016) investigate the effect of accounting
information system (AIS) success factors on organizational performance.
Four types of AIS success factors namely service quality, information
quality, data quality and system quality have been used in this study as
the determinants performance. Data were collected with a structured
questionnaire survey from 273 respondents in Jordanian banking sector.
The collected data were analyzed with PLSSEM technique. The findings
revealed that service quality, information quality and system quality are
the significant AIS success factors for increasing organizational
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COLLEGE OF ACCOUNTANCY
Dagupan City
performance. The study concluded that organizations involved in
banking sectors can increase their performance by adopting and
implementing AIS success factors.
Efficiency
There are many factors that affects the efficiency and effectiveness
of accounting information systems such as qualified human resources,
software and hardware and data bases. Thus, the accounting
information systems combined from these three factors, if any system
has to be effective it should include a combination of well qualified
human resources, the best software, and hardware and databases
(Ramly, 2011).
Hla and Teru (2015) examine the efficiency of accounting
information system on performance measures. The study employed an
exploratory approach solely relying on secondary data. Findings revealed
that the biggest impact Information technology has made on accounting
is the ability of companies to develop and use computerized systems to
track and record financial transactions in facilitating management
decision making, internal controls, and quality of the financial report.
Services
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COLLEGE OF ACCOUNTANCY
Dagupan City
According to Boonmak (2019), AIS features have been developed to
differentiate products and services. Its features can reduce the
differentiation and 14 advantages of competitors and can focus on
product s and services in selected market niches. AIS can help to develop
unique new markets or market niches. It can manage regional and global
business expansion. It can diversify and be integrated into other
products and services. Finally, AIS can create virtual organizations of
business partners. Thus, it can be summarized that the more successful
the business strategies, the more AIS is provided to the organization
Data Security
Accounting information systems have the task of preparing and
processing information, as well as the security of the system to be
established. Information security of accounting systems includes
processes and procedures to protect accounting systems against internal
and external threats.
Vadiee,M et al. (2010) averred that security in accounting
information systems will cause to promote qualitative features of
accounting information and the security of financial reports when leads
to desirable results that be based on accurate and reliable information.
One of the requirements of a vibrant and healthy community for financial
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COLLEGE OF ACCOUNTANCY
Dagupan City
and economic activities, is the existence of a safe and secure
environment. Accountants must have the knowledge and experience to
create such an environment. Also, for providing updated and useful
informing for users, auditors should ensure the security, accuracy and
reliability of financial information.
Accounting Records
Bragg (2022) stated that a multitude of reports can be generated by
an accounting information system. Among the more common reports
are the accounts receivable aging report, accounts payable aging
report, fixed asset depreciation schedule, current inventory report,
fixed asset depreciation report, trial balance, and financial
statements. However, the system does not contain any supporting
information, such as the notes regarding the formulation of journal
entries; this information is maintained manually.
Research Literature
The study of existing data and trends, incidences, or phenomena is
known as research literature. Its aim is to expose vulnerabilities,
developments, and ideas for the future benefit.
Convenience
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COLLEGE OF ACCOUNTANCY
Dagupan City
Accounting software has evolved over time to serve a number of
purposes. These systems have since supplanted spreadsheets as the
preferred method of storing financial data. Every sort of financial
statement has been simulated, and visual reports highlighting financial
trends have been provided. They also interact with common tools,
allowing data to be transferred seamlessly from one platform to another.
It has evolved to become one of the most useful platforms in the
COVID-19 era. Because many employees work from home, the platform
has evolved into their digital workplace, where they conduct the majority
of their principal responsibilities. If they use an HR software suite that
incorporates accounting features, they can also manage payroll, cash
flow, and other tasks in one location (Epstein D, 2022).
Accessibility
According to Fairbanks (2022) most of the best accounting systems
are cloud-based, allowing you to view your account from any computer
with internet access at any time. This accessibility allows you to run your
business from anywhere, whether at home or on vacation. Many
companies also provide mobile apps to help you keep track of important
data and do fundamental duties while on the go, which is especially
useful for teams working from home or in the field. Some packages
University of Luzon
COLLEGE OF ACCOUNTANCY
Dagupan City
include separate apps for employees that include basic functionality like
time tracking and expenditure receipt submission. Mobile app
capabilities vary, so if you need mobile access, be sure the accounting
system's app provides the features you require. You'll also want to make
sure it's compatible with your preferred platform; some are only
compatible with iOS, while others can be used with smartwatches as well
as phones and tablets.
Reliability and Data Quality
An integrated conceptual framework was constructed to guide this
investigation based on the literature review and contingency theory. The
study's conceptual framework is made up of three major constructs: the
SysTrust framework (principles and criteria) was used to conceptualize
and measure the reliability of AIS, the financial and non-financial
indicators were used to measure business performance, and the IASB's
framework fundamental qualitative characteristics were used to
conceptualize and measure the quality of financial reporting. (Ahmad
Demour, 2018)
In accordance to Brein (2015) organizations are confronting a
growing number of issues in managing their enterprise systems as new
technologies add both complications and possibilities to the way they do
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COLLEGE OF ACCOUNTANCY
Dagupan City
business. The need of having excellent data to deliver information to
make those key enterprise-wide choices underpins this ever-increasing
instability. Numerous studies imply that many businesses aren't paying
enough attention to their data, and that one of the main reasons for this
is a failure to assess the data's quality and usefulness, as well as the
expenses associated with having bad data. This research presents an
integrated framework that businesses may use to quantify data
problems, estimate viable solutions, and track ongoing costs and benefits
as part of their financial and management control processes.
Efficiency
According to Iproject (2022), the digitalization of accounting is the
need of the hour in today's world of digitalization. Many benefits and
positive characteristics such as speed and accuracy of operation,
simplicity and dependability of operation, and so on have changed the
fate of the accounting world globally since the introduction of
computerized accounting systems with the latest accounting software.
Accounting software is a type of computer program that allows you to
keep track of your company's finances. Accounting software allows
businesses to more efficiently and effectively use the resources in their
accounting departments, as well as avoid costly bookkeeping and
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COLLEGE OF ACCOUNTANCY
Dagupan City
accounting errors. In the field of accounting and finance, the use of
computer software to facilitate quick reporting and easy processing and
storage of financial information has replaced the use of manual financial
statement reporting. As a result of accounting software's convenience,
financial statement preparation and access, as well as the use of
accounting procedures, has become easier.
Services
In comparison to a product-based business, service-based
businesses have specific accounting requirements. In terms of service
line work, the software should be thorough, but less so in areas like
inventory. There are a variety of accounting software platforms available
for service-based businesses. Professional service providers, such as
accountants, engineers, architects, lawyers, and management
consultants, have their own set of system requirements. White collar
professional service firms, for example, have a time-and-billing
requirement. Their time is being charged rather than a product. The
software must be set up to track time so that the client can be billed
appropriately (Micahel Owen, 2017).
Data Security
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COLLEGE OF ACCOUNTANCY
Dagupan City
Shanker (2017) attest that accounting systems hold sensitive data
that must be kept safe and secure at all times. Unauthorized access can
have disastrous effects, ranging from identity theft issues to the loss of
critical data. When accounting data is modified or deleted, whether on
purpose or by accident, it causes mayhem in the accounting department,
casting doubt on the data's accuracy and dependability. A small
business should protect its computer systems from theft and loss. Keep
systems and servers out of the elements and in a secure location.
Accounting equipment is usually maintained in offices with secured
doors to prevent illegal access. Ensure that the cables connecting
accounting equipment are secure and not tripped over or destroyed by
mice.
Accounting Records
The history of accounting records is thousands of years old and can be
traced to ancient civilizations. Accounting records is a system of
bookkeeping so named because every entry to an account requires a
corresponding and opposite entry to a different account. A good
accounting record keeping enables the business association to arrange
appropriately and furthermore check for misappropriation of asset of the
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COLLEGE OF ACCOUNTANCY
Dagupan City
firm. Keeping appropriate books of records is a fundamental to the
development and survival of business (Ademola, 2012).
Good record management helps in controlling the creation and growth of
records to reduce operating costs, assimilation of new records
management technologies and in ensuring regulatory compliance also
good accounting record enables the business organization to plan
properly and also check for misappropriations of recourses of the
organization. Keeping proper book of accounts is essential to the growth
and survival of the business. In order to ensure efficiency, effectiveness
and continuing survival of business organization, management must
seek for reliable, relevant, accurate and timely financial information for
planning and decision making (Edun, 2013).
Synthesis
The researchers found out that studies and literatures stated from
above has a relation and is significant in the conduct of this present
research study. Each literature and study contributed on expanding the
current knowledge of the researchers. Upon evaluating the content of
the foregoing related literatures, the sources can be use in properly
understanding the ideas essential to the understanding of SAP
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COLLEGE OF ACCOUNTANCY
Dagupan City
accounting software utilization. In comparison, the literatures cited are
more focused and is limited on foreign-based small and medium sized
entities while this present study focused on local based entity
particularly the Yokohama Dagupan City Branch. The literatures and
studies are similar to this study for they have tackled and provided
valuable information based from their findings regarding the status of
utilization of automated accounting information system in terms of
convenience, accessibility, reliability and data quality, efficiency,
services, data security, and accounting records. Moreover, the literature
and studies obtained is relevant and will guide in recommending
appropriate measures in improving the utilization of accounting software
relative to the enhancement of the over-all operation and business
performance of Yokohama Dagupan City Branch. The results from the
source gathered helped in gaining deeper insights for this research
study.
University of Luzon
COLLEGE OF ACCOUNTANCY
Dagupan City