THE IMPACT OF COMPUTER TECHNOLOGY ON ACCOUNTING SYSTEM AND ITS EFFECT ON ORGANIZATIONAL PERFORMACE (A CASE STUDY OF A.G. LEVENTIS PLC AND PAK-MICRO COMPUTERS INTERNATIONAL LTD. )

ABSTRACT

The world over continues to grow in population, size and sophistication Technology. It becomes a sector on which the teeming population depends in for knowledge also grows.

Be it as it may, the Nigerian situation is such that we, for the state of advantages associated with technological growth have started computerizing most business and educational operation in our higher institutions of learning and business organizations big and small. Two of such organizations are A.G Leventis and Pak – Micro Computer Ltd, which were understudied for the impact of computer technology on accounting system and its effect on organizational performance.

The problem, purpose and significance of the study to A.G Leventis and Pak – Micro Computer were considered. Review of existing literature will then follow. The research method made use of diverse research tools were equally employed to analyze data collected. A careful analysis of generated data revealed to the researcher that the use of computer in A.G. Leventis and Pak – Microcomputer was set up ten years ago. Areas.

CHAPTER ONE

1.0  INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Days are when most accounting operations and decisions that have to be made on or from them are on first hand basis. This is because accounting operators and decision makers are in close contact with such accounting operations and as such, collected, analysed and interpreted data from such operations for decision making.

Today, as company and educational operations expand in size and complexity, company executives grow further removed from first hand contact with business scenes. They are to rely increasingly on second hand information about what is happening at the various stages of business operations2, vis-à-vis research and development, production, marketing and consumption of goods and services. Since decisions that have to be made by executives are of profound consequences and have to be based on highly fragmented and typically tenuous information, then it is of great importance that such second-hand information is from a very accurate and reliable sources3.

According to A.$. fapohunda, to remedy these accurate information difficulties in 1963, sears began establishing their twenty – two regional computer centres covering the entire united states of America. initially, the regional computer systems processed customers credit accounts and general accounting data.

Later, merchandising and inventory information from system were established to provide information that the business accounting world and business operations are also busy expanding their technological and industrial bases 6 by breaking into new grounds and improving in existing ones through the use of computers.

With the introduction of computer to many business applications, those business areas that involve repeated tasks which are often monotonous and fallible to human errors (cash, inventory control, payroll and etc) are increasingly being simplified accurately by combining the cost, effectiveness, simplicity of use, efficiency, reliability and accuracy of the computer to obtain, analyze and interpret data information for efficient business decisions. Nigerian business organizations being to grow in size, business operations and processes become increasingly complex, hence computers are being rapidly introduced to cope with the overwhelming demands of business and growth. Though the introduction of computer to many facets of business operations is a welcome idea, its use is further implicated on accounting system and as such organizations need to strike a balance between accounting areas to be manually operated so as to control or limit the menace associated with unemployment.

Some of the business operations to which computer has been successfully introduced;-7

• Printing graphic designs of complicated nature.
• Payroll system.
• Billing system.
• Predict election result.
• Mark examination results such as JAMB and WAEC.
• Control inventories.
• Predict performance of an aircraft or missile still.
• On drawing boards.
• To calculate the critical path of most efficient assignment of troops or problems and so on.

It therefore becomes important that technological changes such as the introduction of computers in organizations be carefully evaluated so that the gains in technical efficiency are not made at the expense of the well-being and integration of employees.8. In the circumstances, then a study of the implication of computer introduction to accounting system of business operations is not only timely but mandatory so as to avoid some of the problems associated with technological changes in organizations.

This research is however, limited to the implication of computer introduction to accounting system of business operations using A.G. Leventis and Pak – Micro Computer Centre as computerized model organizations.

1.1(a) HISTORICAL BACKGROUND OF A.G. LEVENTIS PLC AND PAK-MICRO COMPUTERS INTERNATIONAL LTD.

A.G. Leventis (Nigeria) PLC was incorporated in 1958. This company went public in 1978, and is quoted on the Nigeria Stock Exchange.

It provides properties, company secretarial and share registration services. Industrial and public relations services, legal services, financial management and other services to all the companies under the group.

This company has an ultra modern and functional electronic data processing centre in Lagos where most of the group’s data are processed with an “OLIVETTI SP 600 Computer” which has a network of terminals located at various departments/companies of Iddo House Head Office data input and output. Some of the areas of computer application include Accounts Receivable, Inventory and General Ledger package used by A.G. Leventis and company (Nig) PLC, Leventis Technical PLC.

There is payroll system for the staff and all managers in the group. Other areas of computer application include inventory, billing and share registration.

Leventis stores – formerly a legal entity is now a division of A.G. Leventis and company (Nig) PLC after the successful merger in 1995. This division has an “Olivetti SP 600 computer located at Malu Road, Apapa which handles the inventory control of Leventis stores throughout the country as well as the account receivable and general ledger of leventis stores.

Pak – Micro International Ltd is a group name with Data Training Institute and Master Maintenance Under it. It has its Headquarters at Lagos, 77 Ikorodu Road, Fadeyi. Regional office in Enugu, 31 Ogui Road, Enugu.

Paks – Micro specializes in computer sales, installation, maintenance, account receivable, inventory and share registration, training software development and Bureau services. Because of the nature of its business, the company has the following sections sales, maintenance and bureau services, software development laboratory, training section (DPI). Each section has its own manager. The master maintenance is a civil Engineer contracting firm with its General Manager.

1.2     STATEMENT OF THE PROBLEM

The importance of personnel in the accounting section of an organization cannot be over emphasized especially when one remembers the facts that these personnel support the organization from its small scale to the large scale stage when it begins to introduce computers to many of its hitherto manual operations.

However, an organization has the obligation of profit making and as such promptness of information, accuracy, speed, cost effectiveness, becomes prime factors to the organizations.

The problem of this study is therefore to find out whether or not the introduction of computer technology to accounting systems of business operations has reduced the output of the accounting sections at A.G. Leventis PLC and Pak – Micro computer centre.

1.3     OBJECTIVES OF THE STUDY

The purpose of this research work is to find out and evaluate the implication of computer introduction to Accounting sections of business operation with particular reference to A.G. Leventis PLC and Pak – Micro International as some of the largest organizations in Nigeria today.

The study will also attempt to find out the efficiency and effectiveness of such application to overall management capabilities in decision making.

1.4     SIGNIFICANCE OF THE STUDY

This research work provides a clear understanding of one of the social implications of computer application on accounting system. The information obtained will be useful to management, consultants, about unions, professional, students, shareholders, investors, institute of higher learning, training managers, economist, the government and so on.

The study will also be significant to other organizations willing to computerize their accounting operations as well as to A.G. Leventis Plc and Pak – Micro computer centre.

1.5     SCOPE AND LIMITATION OF STUDY

For the purpose of this study, the impact of computer technology on accounting system will in scope be limited to A.G. Levenits and Pak