In: Accounting
Read the following article: Kaino, B. J., Waweru, K. M., & Omondi, H. R. (2015). Users' perceptions on the effectiveness of enterprise resource planning system in enhancing the performance of accounting information systems of public universities in Kenya. Journal of Business Studies Quarterly, 7(2), 221-230.
http://jbsq.org/wp-content/uploads/2015/12/December_2015_15.pdf
In addition, research ERP success factors, management and/or user implementation experiences, and share articles with the class. What are the perceptions of ERP? What factors have a positive effect on the implementation and why?
Reliability is an essential characteristic contributing to the
usefulness of accounting
information; it is the quality of information that assures that the
information is reasonably free
from error and bias (Maines & Wahlen, 2010). The implementation
of an ERP system involves
changing disaggregated and individualized systems to a highly
integrated environment, which
can be complex. However, the reliability and continuity of
(automated) processes and the
provision of management information is not necessarily guaranteed
by implementing ERP
software alone (Nichols & Wahlen, 2012). The study’s first
hypothesis is thus:
H1: There is no significant relationship between ERP system
implementation and the
reliability of accounting information system in public Universities
in Kenya.
Timeliness of information is another key characteristic influencing
the performance of
AIS. It is measured by the time taken between organization’s
financial year end and the date of
audit report which is called Audit Report Lag. In a study of the
ERP and timeliness of the annual
reports, Dogan, (2007) report that companies that used ERP systems,
release their annual reports
within a small period of time than companies which don’t use the
ERP systems. A testament of
the importance of timely audited report is exhibited by the number
of studies conducted on the
phenomenon of audit delay in different countries, see for instance
(Afify, 2009) Egypt,
(Leventis, 2013) in Greece, (Hashim & Abdul, Rahman, 2011) in
Malaysia, (Bonsón‐Ponte,
2008) in Spain, (Al-Ajmi 2008) in Bahrain, (Habib & Bhuiyan
2011) in New Zealand, (Alkhatib
& Marji 2012) in Jordan, (Abdelsalam & Street 2007) in UK,
(Fagbemi & Uadiale 2011) in
Nigeria and (Khasharmeh & Aljifri 2010) in Bahrain and UAE. We
therefore hypothesize as
follows:
H2: There is no significant relationship between ERP system
implementation and
timeliness of accounting information system in public Universities
in Kenya.
Finally accuracy is another important parameter bearing upon the
efficiency of the AIS. It
is argued that ERP systems enhances the accuracy of data through
requiring data to enter only
once which eventually helps AIS to generate a more adequate,
reliable and high quality of
accounting information. This contention is supported by studies by
Velcu (2007), Gassen &
Schwedler (2010) and Wu, Li, Chu, Sculli, & Wu (2012). A
divergent view is however held by
Spathis and Contastantides (2009) who argues that ERP systems are
effective in transaction
processing but less effective in reporting accounting information.
In this regard we hypothesize
that:
H3: There is no significant relationship between ERP system
implementation and
accuracy of accounting information system in public Universities in
Kenya.
Methodology
The study employed a descriptive survey design because the
information being sought
was descriptive in nature. Out of the 22 fully charted public
universities, 7 had implemented
fully ERP system for at least three years. The study’s population
therefore comprised of the 7
universities. While the target respondents were drawn from head of
various sections in finance
department, procurement, human resource, ICT, marketing, internal
audit, administration and
public relations who are engaged in financial related transactions.
Census survey was therefore used to collect the data from heads of
eight departments targeted by the study from the seven
public universities (56 in total). A Likert-type self-administered,
structured questionnaire with a
reliability score of 0.83 was used to collect data.
Model Specification and Testing
The general model used in testing the study’s hypothesis was:
j J i
i
ij
x x x
P
P
ln .... 0 1 1 2 2
1
Where:
ln = natural log
Pij = probability of success
Pi1 =Probability of failure or (1-Pij)
β0j = the intercept/constant
β1, β2…..βj = the partial regression coefficients (slope)
X1 = Reliability of information generated by ERP
X2 = Timeliness of information generated by ERP
X3 = Accuracy of information generated by ERP
Findings
Reliability is one of the measures of performance of the AIS. The
first objective of the
study was to find out whether ERP implementation had a significant
effect on the reliability of
information generated and thus the performance of AIS in public
Universities in Kenya.
Reliability was measured in terms of consistency, clarity and ease
of workload. The study
hypothesized that: There is no significant relationship between ERP
system implementation and
the reliability of accounting information system in public
Universities in Kenya. In testing this
hypothesis it was deemed necessary to test the relationship each
measure of reliability of
information generated by the ERP this would help establish if
different reliability factors have
the same or different effect on performance of AIS. To test the
hypothesis, the specific model
was formulated as follows:
0 1 1 2 2 3 3
1
ln x x x
P
P
j
i
ij
Where:
ln = natural log
Pij = probability of success
Pi1 =Probability of failure or 1-Pij
β0j = the intercept/constant
β1, β2….. βj = the partial regression coefficients (slope)
X1, X2 and X3 = Measures of reliability: X1- Consistency, X2-
Clarity, X3- Ease of
workload,
ε = Error term
Findings presented in table 1 indicate clarity of information has a
significant effect on
performance of accounting information system at 5 percent
significance level. The chi-square
statistic for clarity was 8.317 with an associated p-value of 0.040
which is less than 0.05.
Consistency of information and ease of workload were not found to
have a significant effect on performance of accounting information
system. The chi-square statistics were respectively 3.579,
p-value, 0.311 and 0.716 p-values, 0.870 for consistency and ease
workload. The null hypothesis
was therefore accepted.