CERTIFICATION

This is to certify that this research proposal entitled “THE EFFECT OF

COMPUTERIZED ACCOUNTING SYSTEMS ON THE QUALITY OF
FINANCIAL REPORTING IN SMALL AND MEDIUM SIZE
ENTERPRISES IN DOUALA” is the original work of MOCHE KOM Clemence
Aurelle. This work is submitted in partial fulfillment of the requirements for the
award of a Bachelor’s of Science Degree in Accounting and Finance, in IUC
DOUALA

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 LIST OF ABBREVITIONS
CAS Computerized Accounting Systems.

IFRS International Financial Reporting Standard

MAS Manual Accounting Systems

SME Small and Medium size Enterprise

MUGFIC Mutual Guarantee Financing Company

PLC Public Limited Company

CEMAC Economic and Monetary Community of Central Africa

U. K United Kingdom

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 TABLE OF CONTENT

CERTIFICATION.............................................................................................................. i
LIST OF ABBREVITIONS .............................................................................................. ii
TABLE OF CONTENT ................................................................................................... iii
INTRODUCTION ............................................................................................................. 1
1.1 BACKGROUND OF STUDY ..................................................................................... 1
1.2 STATEMENT OF THE PROBLEM ......................................................................... 3
1.3 RESEARCH QUESTIONS......................................................................................... 4
1.3.1 Main Question ......................................................................................................... 4
1.3.2 Specific Questions ................................................................................................... 4
1.4 RESEARCH OBJECTIVES....................................................................................... 4
1.4.1 Main Objective ........................................................................................................ 4
1.4.2 Specific Objectives.................................................................................................. 4
1.5 RESEARCH HYPOTHESIS ...................................................................................... 5
1.6 SIGNIFICANCE OF THE STUDY ........................................................................... 5
1.7 LITERATURE REVIEW ........................................................................................... 6
1.7.1 Definition of key concepts ...................................................................................... 6
1.7.2 Theories Mobilized ................................................................................................. 9
1.7.3 Previous works summary ...................................................................................... 12
1.8 PROPOSED METHODOLOGY ............................................................................. 15
1.8.1 Research Design .................................................................................................... 15
1.8.2 Area of Study ........................................................................................................ 15
1.8.3 Scope of the study; ................................................................................................ 15
1.8.4 Sources of Data ..................................................................................................... 16
1.8.5 Variables and Their Measures ............................................................................... 16
1.8.6 Data Analysis Methods ......................................................................................... 17
1.9 REFERENCES .......................................................................................................... 18

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INTRODUCTION

1.1 BACKGROUND OF STUDY

Today’s business environment is dynamic and undergoes rapid changes as a result
of technical innovation, increased awareness and demand from customers. During the
primitive age, records and notes were stored by human beings in their memory and some
were marked on trees or on the ground. As time went on, man evolved from this primitive
era to a more complex economy where there was a need for systematic record keeping and
storage. This led to manual accounting systems. With this system, important records were
kept manually for future use. It was however a tedious exercise. Systematic technological
advancement, however, gradually gave birth to what is known today as computers
(Hartzell, 2006). A computer is an electronic device capable of accepting data as input,
applying prescribed processes on such data and giving out an output which is called
information. Put differently, a computer is an electronic machine for processing
information automatically (Hartzell, 2006).
Advances in information technology have led to the introduction of computerized
accounting systems, in displacement of manual accounting systems in corporate reporting,
to help produce relevant and accurate representative financial reports used by management
and external users for decision-making (Greuning, 2006). Computerized accounting has
become the norm in many firms and financial institutions, although some still prefer to use
manual accounting systems. Computerized accounting system as defined by Muinde
(2013), is the application of a computer-based software which serves as a tool for inputting,
processing, storing and transforming data in management information.
Accountability according to the business dictionary is the obligation of an individual
or organization to account for its activities, accept responsibility for them and to disclose
the results in a transparent manner. Kogan (1986), refers to accountability as a condition
under which an agent renders account to another (the principal) so that judgement may be

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made about the adequacy of performance. The Accounting Department is an essential part
of every business, be it large or small, profit making or non-profit making organizations.
Accounting is a system in organizations wherein, the accountant observes, analyses,
records, files and synthesizes in order to inform. The primary objective of the accounting
department in every organization is to process the financial information of the organization
and prepare financial statements at the end of the accounting period. computerized
accounting system has changed the way accounting data is being entered and thus it is no
longer necessary to have a huge room full of ledgers and records, (Nkah, 2016). According
to Pandey (1998), financial report to the company's stakeholders for instance the
government, public donors are a statutory obligation for every organization. Financial
reporting therefore involves the disclosure of financial results and related information to
management and external stakeholders such as investors, customers, debt providers,
government and non-government agencies about how a company is performing over a
specific period of time.
In Africa, the effect of computerized accounting systems has been felt in many ways
such as easy accessibility to information which has led to an improvement in financial
reporting. For instance, in Tanzania, Computerized accounting system (CAS) was initially
introduced at the Tanzania Public sector in 1992 wherein the government assessed several
computerized aspects of professional deals on the financial management function which
assisted them to move from manual accounting systems toward the automated (Anaeli,
2017). Before computerized accounting systems were introduced in Tanzania, all
accounting processes were performed manually. Tanzania has been updating their
computerized accounting system over the years and this system has improved financial
efficiencies both in the public and private sectors. These accounting packages greatly
reduce the amount of tedious manual work associated with data management.
In Cameroon, small enterprises have highly welcomed computerized accounting
systems in most areas of their operation such as recording of daily transactions, customers’
savings, preparation, and presentation of their year-end financial reports. As a result,
financial information is prepared on time and free from errors thereby enabling the
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management to make good and reliable decisions. Because SMEs in Cameroon has realized
that one way in which they can provide quality services is through the use of technology.
However, some small enterprises have not been able to meet up to the standard of
employing these new systems due to their small nature. So, financial transactions in these
small enterprises are still recorded manually. The researcher therefore focuses on finding
out the effects of computerized accounting systems on the quality of financial reporting in
SMEs in Douala.

1.2 STATEMENT OF THE PROBLEM

Prior to the introduction of computerized accounting systems, manual accounting
was the popular method of accounting where the business had to hire a private or public
accountant who would manually record transactions books and ledgers and then prepare
financial statement on paper. This brought about many problems as accounting practices
were time consuming, boring, had no backup records in computerized accounting system
of loss and human error. With the awareness of information technology, manual accounting
is gradually becoming outdated. Although most SMEs have computerized accounting
systems, some still find it difficult to track down errors and fraud, Adetayo et al (2009).
This could be due to the fact that the accountant or those in charge of the computerized
accounting system are not computer literates and so face difficulties in using the
computerized system. This research work will be carried out to evaluate the effects of
computerized accounting on the quality of financial reporting in SMEs and also suggest
ways in which it can be improved.

Though computerized accounting systems are advantageous, some of these

advantages includes the point that it can generate all types of reports needed by the
management (McBride, 2000) and it is easy to carryout accounting functions such as
posting transactions to the ledger (Carol, 2002). Their importance has not been fully
appreciated by some small and medium enterprises. Even the small enterprises that have
put in place good computerized accounting systems are still not aware of how these systems

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affect their financial reporting. In this research, specific elements of computerized
accounting systems are assessed with respect to their effects on financial reporting.

1.3 RESEARCH QUESTIONS

1.3.1 Main Question
What is the effect of computerized reporting systems on the quality of financial
reporting in SMEs?

1.3.2 Specific Questions

To answer the main research question above, answers will be sought to the
following specific research questions

1. What is the effect Computer literacy systems on quality financial reporting in SMEs?

2. What is the effect of Accounting software on quality of financial reporting in SMEs?

3. What is the effect of Systems security on quality of financial reporting in SMEs?

1.4 RESEARCH OBJECTIVES

1.4.1 Main Objective
To study the effect of computerized accounting systems on quality financial
reporting in SMEs

1.4.2 Specific Objectives

This research will further be guided by the following specific research objectives:
1. To examine the effect of Computer literacy systems on the quality of financial reporting
in SMEs.

2. To examine the effect of Accounting software on the quality of financial reporting in

SMEs

3. To examine the effect of Systems security on the quality of financial reporting in SMEs.

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1.5 RESEARCH HYPOTHESIS
In order to ensure the verification and validation of the primary data gathered through
administration of questionnaires. A research hypothesis is formed comprising of the null
Hypothesis (Ho).

• HO1: Computer literacy has no effect on the quality of financial reporting in SMEs.
• HO2: Accounting software has no effect on the quality of financial reporting in
SMEs.
• HO3: System security has no effect on the quality of financial reports in SMEs.

1.6 SIGNIFICANCE OF THE STUDY

This study will help enhance SMEs’ capability to build mechanisms to increase the
quality of financial reports through Computerized Accounting systems. This study will
help the management and staffs of SMEs work on the gaps within, since it will enable
them identify and understand the benefits, risks and problems associated with
computerized accounting and financial reporting. This information obtained will also be
of great importance to other business companies and bodies that have adopted and those
that are yet to adopt the system of computerized accounting in knowing the pressure points
to be emphasized and well managed in order to pursue the system successfully. Finally,
this research adds to the current body of knowledge relating to accounting systems, which
can be used by future researchers.

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1.7 LITERATURE REVIEW
1.7.1 Definition of key concepts
Accounting

According to Osmond, (2011). accounting is the way business owners manage their
company’s financial information in orders to make better decision regarding their
companies. As per the researcher, accounting as a systematic process of identifying,
recording, measuring, classifying, verifying, summarizing, interpreting and
communicating financial information.

Computerized accounting systems

Waburoko (2001) defines a computer as a general-purpose machine, which can

receive, store, manipulate and output information. It is therefore agreeable that a computer
is an electronic device that operates and runs under the control of instructions or commands
stored in its own memory unit, accepts data through input, stores it, processes the data and
produces output. Computerized accounting is defined by Wood & Sangster (2005) as a
total suit of components that together comprises all inputs, storage, transactions,
processing, collecting and reporting of financial transaction data. Individuals and
companies both big and small manage their money and assets one way or another. They
hire accountants to help them carry out the mathematical requirements of accounting and
balancing their books. Before the introduction of information technology into accounting,
these accounting protocols were performed manually.

In my own view computerized accounting refers to using computers for a range of

performing accounting tasks.

Manual Accounting Systems

According to the oxford learner’s dictionary, manual refers to something done with
hands. A manual accounting system is a system in which the accountant or the bookkeeper
is required to post business transactions to the general ledger and workshop by hand.

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Manual accounting system in itself is said to have a cycle that includes the following steps;
journalizing the transactions, posting them to ledger account, preparing a trial balance,
making adjustments entries, preparing adjustments to end of period trial balance, preparing
financial statements and appropriate disclosures, journalizing and posting the closing
entries and preparing after closing trial balance (Weber, 2011). And all these are done by
hand using a pen and paper.

Quality of Financial reporting

Saleemi (1981) defined financial reporting as the process of supplying financial

information which is reliable, accurate and complete to the various stakeholders for making
economic decisions. Rose & Hudgins, (2008). Financial Reporting can be defined as the
process of presenting financial data about a company’s financial position, the company’s
operating performance, and its flow of funds The researcher defines quality of financial
reporting as a written report for the company’s managers and investors and government
agencies. These reports are also most useful to users iii helping them make decisions about
the reporting entity on the basis of information availed.

• Relevance; Wood (1999), indicates that financial information is relevant if it is

capable of making a difference in decisions made by helping users to form
predictions about the outcomes of the past, present and future events.
• Reliability; this implies that the information should be free from material errors and
it should be misleading.
• Neutrality; According to Turner (2000), neutrality is the demand that accounting
information should not benefit one class and neglect the others. Reliable information
is verifiable, not neutral and has representative faithfulness.
• Timeliness; According to Indira (2008), timeliness arises as a result of perishability
of accounting information. To benefit users, financial information must be presented
at the right time otherwise it loses its relevance.

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 • Understandability; Understandability is a quality of financial reporting that
enables users to perceive the significance of financial information.
• Comparability; The information must be comparable to the financial information
presented for other accounting periods, so that users can identify trends in the
performance and financial position of the reporting entity.
Computer Literacy

Sreenivasulu (1998) defined computer literacy as the level of expertise and

familiarity with a computer. According to German (2000), computer literate people are
those who are able to plunge into new technology and at the same time feel confident that
they will eventually master it.

Accounting Software Packages

Accounting software can be defined as an application software that records and

processes accounting transactions. (Daniel Bricklin, 2009). Accounting software describes
a type of application software that records and processes accounting transactions within
functional modules such as accounts payable, account receivables, payroll and trial
balance.
The type of Accounting Software packages used in businesses depends on the size
of company operations, members of users and different segments or departments in a
company. Some of the Accounting software are:

• QuickBooks
QuickBooks is an easy-to-use software that allows individuals to quickly set up their
business. QuickBooks products are geared mainly toward small and medium-sized
businesses.

• Peach tree accounting sage’s Software packages

Sage’s Software packages can be server-or-web-based allowing users to access company
Information from multiple locations and it is a mid-size Software programs of more

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functionality for multiple users of business Software. Companies can select different
models based on business size and the number of users accessing the Software.

• Alpha
This software is used by most if not all category one microfinance institutions, Credit
unions to be more precise. Given its low cost and ease of usage, the said credit unions with
their small capital easily afford this package.

• Enterprise Resources Systems

Enterprise Resources Systems are fully customizable packages that can take several weeks
to fully implement in a company. Large companies with several operational department or
multiple locations may use Enterprise Resources Systems as their preferred accounting
Software packages.

System Security

Computer Security is the protection of computing systems and the data that they
store from unauthorized access. Security systems attempt to prevent fraud and other misuse
of computer systems, they act to protect and further legitimize interests of the system
constituencies. Most of the computer accounting software have inbuilt internal control
system. These Internal control systems aim at ensuring the reliability of financial
information, the effectiveness and efficiency of operations and the compliance of laws and
regulations. It also helps in double checking errors of entry before data is posted on the
central database.

1.7.2 Theories Mobilized

Stakeholder Theory
This theory was written by Dr Edward Freeman in 1974 and it emphasizes that some
individuals or groups are very important for the survival of the organization. Stakeholder
theory suggest that the purpose of a business is to create as much values as possible for
stakeholders. (Freeman, 1974). It is thus a theory on organizational management and
business ethics that addresses morals and values in managing an organization. In an early
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research, Freeman reported that a stakeholder refers to any group or individuals who can
affect or who is likely to be affected by the achievements of an organization’s objectives.
Stakeholders can equally refer to external users of financial statements and they are highly
dependent on corporate financial reports for making their economic decisions (Hasan,
2013). The stakeholders in most organizations include; shareholders, suppliers, customers,
non-profit groups, local charities, the government just to name a few. The main idea of
stakeholder theory is that organizations that manage their stakeholder’s relationship
effectively will survive longer and perform better than organizations that do not.

Diffusion of Innovation Theory

The diffusion of innovation theory originated in the first half of the 20th century and
was later popularized by an American sociologist called Everett Rogers in his book titled
Diffusion of Innovations, first published in 1972. According to Rogers (2003), innovation
is an introduction of any idea. Practice or object that is perceived to be new. Rogers equally
defines diffusion as the process by which an innovation is communicated through certain
channels over time among the members of a social society. The diffusion of innovation
theory seeks to explain how, why and at what rate new ideas and technology spread. The
diffusion process consists of a few individuals who first adopt an innovation, then spread
the word among their circle of acquaintances a process which usually takes about a month
or years. Rogers (2003) believes that an innovation has two parts; first is the generation of
an idea or invention and second is the conversion of that new idea into business or other
useful application. Technical innovation has caused most local and international
organizations to adopt the use of computerized accounting systems. For example,
businesses, industry and government are completely woven in their organizational
structures and strategic planning process (Glover, 1993). This theory is related to this work
as it shows how computerized accounting has evolved over time.

The Technology Acceptance Model (TAM)

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 The Technology Acceptance Model (TAM) is an information systems theory that
models how users come to accept and use a technology. The model suggests that when
users are presented with a new technology, two specific factors influence their decision
about how and when they will use it. [he two factors are; perceived usefulness (PU), and
perceived ease-of-use (PEOU) (Davis, 1989). TAM has proven to be a useful theoretical
model in helping to understand and explain use behavior in the information system
implementation. It has been tested in many empirical researches and the tools used with
the model have proven to be of quality and to yield statistically reliable results. However,
parsimony has been one of TAM’s strengths but also major weakness as it is having limited
use in explaining users’ behavior. As a result of the shortcomings, many authors have
extended TAM with additional constructs. Mbogo (2010) for instance, employed TAM and
extended it to include other factors such as perceived ease of accessibility. perceived low
cost, perceived security, perceived convenience, perceived satisfaction and perceived
support to investigate the success factors attributable to use of CAS. Tobbin (2011)
modelled adaptation of CAS expanding TAM to investigate the consumer 12 behavior
towards CAS adaptation in Ghana. Similarly, Odia (2012) applied TAM with additional
factors such as perceived trust, security, and perceived convenience. Saleh (2011)
mentioned that individual’s attitude using the CAS can motivate the actual usage of it. It is
a function of an individual belief when using the technology and the value he or she was
looking for. CAS has been valued by accountants not only for face-to-face conversation
but also for making interest based decision as they seek any chance to maintain business
group booking on the internet. Moreover, when there is a lot of integration rather than the
past systems, the process will be more efficient and accurate. Analysing the perceived ease
of use (PEOU), perceived usefulness (PU) effects on the intention towards using CAS as
dependent variable, required the basis of TAM in exploring the actual usage of CAS.

Agency Theory

Meckling and Jensen developed the agency theory in 1976 to explain the
relationship between principals (shareholders) and agents (managers) (Mwaniki, 2013). In

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this context, the principal delegates an agent to perform work in the best interest of the
principal (Oluoch, 2014). However, this delegation of the decision-making authority can
lead to a loss of efficiency and consequently increased costs (Mwaniki, 2013). In the
context of the financial reporting accuracy, the agency theory is concerned with the
corporate disclosures that provide an enabling environment for the managers to disclose
negative information voluntarily. This corporate disclosure is critical in the context that
there is conflict of interest between managers and shareholders and conflicts between the
firm and its creditors (Oluoch, 2014). The firms make disclosures through regulated
financial reports including financial statements, footnotes, management discussion and
analysis, and other regulatory filings (Barako et al., 2013). However, these corporate
disclosures are affected by several factors, which compromise the quality of financial
reporting. The corporate disclosures are shaped by the manager’s reporting and disclosure,
mandated reporting and disclosures regulations, and analyst’s expectations (Oluoch, 2014).
The agency theory is important to this study as it has explained the role of discretionary
financial statement declarations and how they may influence the financial statements
accuracy.

1.7.3 Previous works summary

Powell and Xiao (2006), surveyed major UK companies to determine the extent of
ICT use in accounting. Among the indicators used include the extent of computerization,
types of computerized accounting system in use, types of computerized accounting system
applied, workstation to staff ratio, and years of computerized accounting system use.
Results showed that 94% of the companies have fully or largely computerized their
accounting system. And Xiao’s (2006), results showed that the extent of computerization
is greater in larger companies than small and medium companies. The results also
confirmed earlier findings in other studies that argued firm’s size as the determinants of
the sophistication of computerized accounting system (Thong, 1999), and the ones found
by Hunton and Flowers (2007), that company size was significantly negatively correlated
with the extent of computerized accounting system use in accounting. They suggested that

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the differences might be attributed to lower capital and risk barriers due to dramatic
decrease of computerized accounting system cost at which firms of all sizes can benefit
from the latest computerized accounting system development. Another possible
explanation is that medium companies may have expanded from small companies but their
managers may have limited abilities, namely time and education to appreciate the benefits
of using integrated accounting systems. Powell and Xiao (2006), further found that nearly
eighty percent of companies are almost or fully satisfied with their computerized
accounting system-based accounting systems. Nearly 90% claim that their objectives of
computerized accounting system applications have been fully or almost satisfied. The
results revealed that most of the firms had computerized their accounting systems.
Computerized accounting system adoption depends on the type of business and the
management awareness on computerized accounting system and its benefits. In addition,
due to the nature of business being less complex, public institutions show a greater
tendency to purchase commercialized accounting packages that are much cheaper than
internally or externally custom-tailored packages (Gray, 2011).

Mutiso and Kamau (2013), carried out a study on the factors influencing complexity
in financial preparation evidence from the banking sector in Kenya. The objectives
included assessing whether the disclosures adoption of international reporting standards
regulations and lack of competence by the papers have contributed to the complexity of
financial reports preparation. Management interference, lack of guidance on interpretations
and frequent updates of standards were identified as the main challenges of preparing
financial reports. Nyabo Romaric (2015), studied the impacts of Information Technology
on accounting practices in microfinance institutions. The study showed that the use of
accounting software is very important in the preparation of financial reports and can
manage multiple and complex types of operations. After meeting the objective of the study,
he concluded that computerized accounting is more efficient than manual accounting
system and the advent of information technology has significantly improved the
performance of accounting tasks and has led to improvement of accounting.

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 Breen (2003), conducted a study to investigate small business usage of a
Computerized Accounting System to ascertain if there are obstacles that prevent small
businesses from migrating to such a system. Two groups of small businesses were
surveyed. The study found that development of an understanding of the obstacles that
inhibit the use of a computerized accounting system is very useful. Challenges encountered
with the Use of Computerized Accounting Systems Despite the numerous benefits of
Computerized accounting systems that can be listed they are not without challenges. The
weaknesses to implementing a computerized accounting system include: lack of time
(Proudlock et al. 1999), owner-manager’s view that the computerized accounting system
is costly (Head 2000), perception that the technology is not suited to the nature of the
business (ABS 2000), and lack of IT expertise (ABS 2000; Burgess 1998).

Amveko (2011), carried out a study in which she aimed to identify the impact of
computerized accounting on financial reporting in Kampala, the financial reports generated
conform to some of the quality attributes of good financial information. This was
emphasized by a positive correlation of response on quality attributes of timeliness and
accuracy though it was on a low scale her findings were that that computerized accounting
system actually have an influence on the quality of financial reports for publication
purposes.

Nganti M. (2020), conducted a study aimed at assessing the influence of

computerized accounting systems on the quality of financial reports in MUGFIC PLC and
she had as major finding that computerized accounting systems has a strong positive effect
on the quality of financial reports ion MUGFIC Plc.

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1.8 PROPOSED METHODOLOGY
1.8.1 Research Design
Saunders and Philip (2012), states that research design is a general plan of how you
will go about answering your research questions. Ani and Ugwu (2007), add that research
design composes of series of prior decisions that taken together provide a master plan for
executing a research project.

This study will use qualitative research design which refers to the process of
collecting and analyzing non-numerical data to understand concepts, opinion and
experiences. Qualitative research design was adopted because the study seeks to identify
respondent’s opinion about the effects of computerized accounting system on the quality
of financial reporting in SMEs in Douala.

1.8.2 Area of Study

The determination of sample size will be drawn from a population. The sampling
techniques that will be used in this research are probability sampling; simple random
sampling techniques to enable them to conclude the findings back to the larger population.

Kothari (2006) stated that sampling is the collection of some parts that used to
present the all respondents based on judgment or suggestion, in other words it is a process
of deriving sample from the population. There are different types of sampling but for this
research a purposive sampling method will be used. We therefore, take out a representative
portion of the population, called a sample, and investigate all the items in the sample
thoroughly. The respondents from SMEs were selected in Douala city involved in
accounting.

1.8.3 Scope of the study;

This study could have covered the effect of CAS on the quality of financial reporting
of all sectors of the Cameroonian Economy but due to the challenges of such a task
especially the financial resources with which to execute it, this is now limited to a sample
of 3-4 SMEs in Douala during a period of 3-4 months.
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1.8.4 Sources of Data
The main source of data collection will be primary data which refers to data
collected at fresh and for the first time Kothari (2006). It can equally be referred to as data
collected directly from the field and it is usually collected by the researcher himself. Data
will be obtained through questionnaires. A self-administered questionnaire will be used for
this purpose. A questionnaire is a simple form with questions to be answered by a
respondent providing information on a specific issue. Using questionnaire is good because
it improves response rate and it is quick and limited to answers relevant for the survey. The
questionnaire will be designed based on the specific objectives and research variables. The
effects of the independent variable on the dependent variable will be assessed by the 5-
point Likert scale ranging from Strongly agree (5), agree (4), disagree (3), strongly disagree
(2) to undecided (1). This will enable the researcher to determine the respondent’s degree
of agreement or disagreement with respect to the statement provided.

1.8.5 Variables and Their Measures

For this research project, we are going to use two variables. These variables are the
dependent and the independent variables.

➢ Dependent Variable: This is the main factor that you’re trying to understand or
predict. Which is Quality of Financial Reporting

➢ Independent Variable: These is the factor that you hypothesize have an impact on
your dependent variable. Which is Computerized accounting system

In order to measure how the independent affects the dependent variable, we will
have to use regression analysis. Regression analysis is an important statistical method for
the analysis of data. It enables the identification and characterization of relationships
among multiple factors. The model will look as follows;

Y = a + b × X, where a is the y-intersect of the line, and b is its slope. First, the parameters
a and b of the regression line are estimated from the values of the dependent variable Y
and the independent variable X with the aid of statistical methods.

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r = ± 1: perfect linear and monotone relationship. The closer r is to 1 or –1, the stronger
the relationship.

r = 0: no linear or monotone relationship

r < 0: negative, inverse relationship (high values of one variable tend to occur together
with low values of the other variable)

r > 0: positive relationship (high values of one variable tend to occur together with high
values of the other variable)

1.8.6 Data Analysis Methods

Data analysis involves the process of inspecting, cleansing, transforming,
interpreting and modelling data with the goal of discovering useful information to support
the hypothesis underlying each question (Judd & McClelland, 1989) depending on nature
of the sampling, measurement and data collecting method. Quantitative analysis for
questionnaire will be performed. Analyzing all sorts of data due to its effectiveness in
managing data with wide range of options, generate better results and is specifically
designed to analyze statistical data (Green and Salkind, 2010). Descriptive analysis such
as frequencies and percentages and inferential analysis such as regression analysis will be
used to present quantitative data in form of tables.

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1.9 REFERENCES

ABS (2000 Information Technology in Small Business in Australia: Paper presented to the
USASBE Conference, Florida; pp 15-18

Amveko, A. 2011). Computerized Accounting Systems and Financial Reporting,

unpublished B.S, Makerere University, Kampala

Adetayo. J. 0. Sanni. S. A. and Ilori, M. 0. (1999). “The Impact of Information Technology

on Product marketing: A Case Study of Multinational Factories in Nigeria” Elsevier Science
Ltd. Pp 691-699 Reporting, Unpublished B.s, Makerere University, Kampala.

Breen, J. (2003). The use of Computerized Accounting Systems in Small Business. A Paper
for the Small Enterprise Association of New Zealand 16th Annual Conference, pp. 1-12.

Carol, L. C (2002). How Computers has Simplified Accounting. [Link]

Christen, R. P., Lyman, T. P. and Rosenberg, R. (2003). Guiding Principles on Regulations

and Supervision of Micro finance, Micro finance Consensus Guidelines. Washington

Daniel Bricklin. (2009). Bricklin on Technology, Wiley Publishing. Pp 512

Frankwood and Alan Sangester (2005).Business Accounting, 19th edition, Pitman Publishers
London.

Gelinas, U.J, Sutton S.G & Hunton J.E. (2005). Accounting information systems. 6th edition.
Thomson, OH, USA: South-Western.

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