Accounting Information Systems in an ERP Environment

Accounting Information Systems in an ERP Environment

Introduction

The recent developments in the accounting information systems (AIS) have led to the adoption of enterprise resource planning (ERP) technology (Daoud and Triki, 2013). Since security in both cloud computing and information hosted on databases is at risk due to hacking and intrusion from unauthorized users, there has come a need to design complex systems for safeguarding the information while making sure that the required users still have access to it. Due to this factor, ERP technology brings fourth the quality needed in the AIS by incorporating technical expertise into improvement of business performance (Worrell et al, 2013). This retrospect paper analyses the essence of adopting ERP in the AIS using the theoretical framework as discussed in the article by considering the hypotheses examined.

Discussion

Enterprise Resource Planning (ERP) technology has been applied in application of a new vision in accounting Information Systems (AIS) (Leon, 2014). Since AIS has focused on a mission for provision of information not just for formal and financial uses but also other informal purposes for streamlining of the management of companies.

Having been designed by combining computer applications, ERP is in a position to generate a complex design that integrate processes and various functions within a given company. In this manner, ERP is in a position to enhance and present the company’s vision since the users share a common database that is integrated to present a holistic view of the system (Worrell et al, 2013).

In addition, Shaul and Tauber, 2013 indicate that the AIS has had richer information system with relevant data which has been updated due to the new management techniques that have been facilitated by ERP. Besides, accounting has now been improved to cover wider range of information including financial analysis, management and financial accounting other than providing history and forecast on the same (Apostolou et al, 2014).

As discussed by Daoud and Triki, 2013, the success of information system is hinged upon the implementation of ERP. Since it takes into consideration the operational, organizational, technological, strategic and managerial components in the information systems, the information thus available in the system has organizational impact (Shaul and Tauber, 2013).

As a matter of fact, the information obtained from ERP system has greater quality which facilitates advanced practices in accounting (Worrell et al, 2013). These practices include operational budget preparation and strategic leadership support. In the article, it is suggested that while focusing on technical aspects of the ERP system, it is possible for companies to design accounting practices that foster strategic management (Shaul and Tauber, 2013).

ERP vendor provide training, maintenance and knowledge on technical support which enhance AIS within companies. This is evidenced when companies and their consultants need to transfer tremendous amounts of data or information (Worrell et al, 2013).

The discussion by DeLone and McLean’s model provide a coherent basis for further research under the success of the information system (Daoud and Triki, 2013). Though some authors find the model to be complete as it discusses the determinant of the success of the information system to be quality of the information system, other find it incomplete due to its lack of theoretical basis.

Moreover, the Gablle et al.’s model is also faulted for the lack of contextual influences which facilitates its limitation (Daoud and Triki, 2013). Since the models do not provide information on external factors that influence the success of the information system. This gave rise to the contingency theory which encompasses organizational effectiveness relating it to contingency factors which have impact on the information system accounting.

Analyzing the information systems basing on this theory provides underlying information like organization and individual variables that influence the design of the accounting information system (Shaul and Tauber, 2013).

Similarly, the theoretical adaptation reveals that other that organizational strategy, structure and budgetary participation factors influencing the information system, educational levels, training, age and experience impact the accounting information systems (Daoud and Triki, 2013).

In adopting theoretical approach in the research, it is also established that organizational structure interaction with contextual influence lead to improvement in the performance of an organization (Leon, 2014). That is to say, companies have the mandate to provide resources that facilitate the interaction between accounting information system and the contingency factors which influence the organization’s performance (Shaul and Tauber, 2013).

By applying the moderation approach, it is possible to analyze the relationship between information system and contingency factor. As discussed in the article, the competency of accounting staff moderates the interaction between ERP and accounting information system (Daoud and Triki, 2013). Using this example, it can be deducted that one contingency variable impacting another also depends on another variable and therefore the chain becomes intertwined leading to one aspect moderating the other like managers and external computer experts.

The authors present several hypotheses in the research to cement the relationship between AIS and ERP. One of the crucial hypothesis is the proposition that accounting practices that are used in deriving of the information from AIS are influenced by the quality of the information. Under this hypothesis, it is evident that the time and frequency in preparing financial statements is reduced (Shaul and Tauber, 2013). Furthermore, officers in accounting prefer sophisticated AIS which is regarded to provide quality information and therefore they will develop advanced accounting practices. In addition, the greater quality of information motivates leaders into designing operational and strategic budgets (Leon, 2014).

Moreover, the hypothesis that quality of ERP system affects the accounting practices that are used in the information system. This is similar to the proposition that quality of ERP system is determined by external expertise quality (Leon, 2014). Advanced technology in information system lead to development in management and accounting practices which are all influenced by the technical support in the ERP system.

The technical assistance incurred in the establishment of the system and its maintenance influences the reliability of the service (Daoud and Triki, 2013). Viewing the prevailing situation in information technology including hacking, organizations need superior external expertise that allow the company to make use of complex systems that reduce chances for criminal activities while focusing on attaining organizational objectives (Worrell et al, 2013).

In a review by Shaul and Tauber, 2013, the communication design in the company have to benefit from ERP where the programs are designed in such a way that the security of the data in the company’s database is safeguarded through encryption. By utilizing the creation of firewalls and intrusion detection expertise, the technical quality is incorporated in the ERP system (Worrell et al, 2013).

Conclusion

To sum up, the research by Daoud and Triki, 2013 indicate that adopting ERP technology in the AIS has a positive influence on the quality of information system designed. Besides, by presenting a holistic and integrated view of the information system, ERP technology enriches the information database for AIS enabling it to provide history and forecast of financial system in a company (Leon, 2014).

The study also proposed the use of contingency theory which focusses on treating each entity in the company as a variable which has an impact on the success of the information system as a whole. This is demonstrated by analysis of the hypotheses on AIS and ERP quality (Worrell et al, 2013).

References

Apostolou, B., Dorminey, J. W., Hassell, J. M., & Rebele, J. E. (2014). A summary and analysis of education research in accounting information systems (AIS). Journal of Accounting Education, 32(2), 99-112.

Daoud, H., & Triki, M. (2013). Accounting information systems in an ERP environment and Tunisian firm performance. The International Journal of Digital Accounting Research, 13(19), 1-35.

Leon, A. (2014). Enterprise resource planning. McGraw-Hill Education.

Shaul, L., & Tauber, D. (2013). Critical success factors in enterprise resource planning systems: Review of the last decade. ACM Computing Surveys (CSUR), 45(4), 55.

Worrell, J., Wasko, M., & Johnston, A. (2013). International Journal of Accounting Information Systems. International Journal of Accounting Information Systems, 14, 127-137.

Worrell, J., Wasko, M., & Johnston, A. (2013). Social network analysis in accounting information systems research. International Journal of Accounting Information Systems, 14(2), 127- 137.