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Currently, most organizations continue to increase spending on information system and their budgets continue to rise. Moreover, economic conditions and competition create pressure about costs of information’s. Therefore, the study aimed to examine accounting information system on the performance of NTACCUL, Buea. The specific objectives of the study were first, to examine whether there is a relationship between system quality and performance, secondly to establish whether a relationship exists between information quality and organizational performance and thirdly to find out if there is a relationship between system threats and organizational performance of NTACCUL, Buea. The study used descriptive survey design with population of the study consisting of the employees of NTACCIUL. Data were collected from 35 respondents using questionnaires. The data were analyzed by SPSS. The demographics questionnaires were analyzed by simple descriptive statistic presented in frequency tables. The objectives, one, two and three, with the role of accounting information system on performance was analyzed by regression linear analysis.

The study found that there was a significant positive relationship between system quality and organizational performance. The results further disclosed that, there was a positive relationship between information quality and organizational performance of NTACCUL, Buea. Again, the results also revealed that there exists a significant negative relationship between system threats and performance. For the overall testing of effects of accounting information system on performance, the results reveals that accounting information system have an overall significant effect on the performance of NTACCUL, Buea. The results further show that accounting information system variables such as system quality, information quality and system threat affects performance by 41.5%. This leads to the rejection of the null hypothesis that states that there is no significant relationship between accounting information system and the performance of micro finance institutions in Buea municipality, case of NTACCUL.



1.1Background of study

The ever growing need for business development, growth and expansion in today’s contemporary business environment has necessitated managers to consider more advanced management strategies targeted at improving decision making in organizations. Most of these strategies are tailored towards sustaining businesses in wake of rapid technological innovations, increase awareness and challenging demands from customers. One of such strategies is the adoption of information systems within the business organizations (Davoren, 2019).

Accounting information system therefore, is a structure that a business uses to collect, store, manage, process, retrieve and reports financial data so that it can be used by accountants, consultants, business analyst, managers, chief financial officers, auditors, regulators and tax agencies. The main components that make up AIS include; people, procedures, data, software, and hardware. Such software include; the Alpha software, Peachtree, QuickBooks, and the SAGE software. Accounting Information System is as essential as it helps organizations to fulfill its statutory obligations of preparing and publishing certain accounting records, it analyses data and provides reliable and accurate financial information, and also protects a firms accounting data from theft. Businesses started embracing accounting information system during the year 1955 when a company bought their first computer purely for accounting purposes. Accounting practices were streamlined in the 1960s when the U.S transportation industry developed the EDI (electric data interchange) which was embraced by a lot of companies then. And around the years 1978 and 1998, the Peachtree and QuickBooks soft wares were introduced respectively, which were embraced by lots of companies till date. Early accounting information Systems were designed for payroll functions in the 1970s. By then, accounting information systems were developed “in house” as no packaged solutions were available. Such solutions were expensive to develop and difficult to maintain.

Then, the “The windows age” emerge around the 1990s which supports solid application, but only supporting the basic accounting operations. Getting to the 2000s era-“integration” and “SaaS” concept took birth, bringing along more developed systems that would allow more complex accounting operations and data processing, as well as concurrent access to files and programs. And noting generally that information system is developed using information technology to aid an individual in performing their job, therefore most organizations focus on developing information systems needed for the provision of better financial statements which influences management decision making, thus influencing the performance of organizations.

Because of the minute by minute change in finances, accurate record keeping is critical. Computerizing a business’s data became necessary.

Financial statements are reports prepared by a company’s management to present the financial performance and position at a point in time. Financial statements are therefore, the immediate result of the usage of accounting information system. A general-purpose set of financial statements usually includes a balance sheet, income statement, statement of owner’s equity and statement of cash flows. These statements are prepared to give users outside, the company’s financial positions, as well as their profit or loss. Publicly traded companies are also required to present these statements along with others to regulate agencies in a timely manner. Financial statements are the main source of financial information for most decision makers. That is why financial accounting and reporting places such a high emphasis on the accuracy, reliability and relevance of the information on these financial statements.

AIS remain part of management information system which is use for company’s operation. Based on the excesses of the old management system which was at times random, based on intuition and its unscientific approaches, the MIS was therefore embraced.  Financial statements are used for this purpose. MIS actually help the organization especially the managers, to organize and evaluate information and data, and provide information in a timely and efficient manner. This also helps the manager makes decisions based on the information and analysis that the MIS provides, thus influencing the organizational performance. Since MIS is a computer system just as AIS, it comprises of elements such as software ( that help make the decision), users (managers), databases, all hardware necessary and applications ( people and project management application) as well. It should be noted that the MIS reports allow for the evaluation of the performance of employees, machinery. It also helps in cost control, comparing budgets and plans to actual performance, identifies the strength of the organization, and it finally takes away uncertainty and risk.

          Organizational performance comprises of the actual output or result of an organization measured against its intended outputs (or goals and objective).

Performance according to Conway (2009) is the activity that guarantees that goals are being met in an efficient way. It is from the financial statement that an organizational Performance can be relied on. Organizational performance can be viewed at in two perspectives that is: financial and non- financial performance.

Financial performance is use as a general measure of a firm over all financial strength. In this work, profitability is the main financial measure to measure a firm’s performance. Though other include: earning per share, profit margin ratios, liquidity, return on capital and return on equity. While non-financial performance is the measure that gives out information on a company’s performance in non-monetary or money terms. Though one can’t express non-financial measures in money terms, these measures can be qualitative and quantitative. They include; social reporting, clear social objectives, product and service varieties, learning and growth employee satisfaction, and employee training. So therefore, this research work shall be based on the financial performance of MFSs.

According to Robinson (1999), micro finance institution (MFI) is defined as a development tool that grants or provides financial services and products such as very small loans, micro savings, micro insurance, and money transfer to assist the very or exceptionally poor in expanding or establishing their businesses. In Cameroon, MFIs can be traced as far back as 1963 when the first credit union was established in the North West Region by the St. Anthony’s Discussion Group (Long, 2009). This idea was introduced at Njinikom in the North West Region of Cameroon by a certain Rev. Father Anthony Jansen, a Roman Catholic priest from Holland.

However, it was not until the late 1980s, as a result of the commercial banking sector in Cameroon experiencing a serious crisis, with many major banks becoming illiquid and/or insolvent that Microfinance and MFIs really gained ground. At the root of the banking crisis in Cameroon was multifaceted government intervention, inadequate management, and a virtual lack of enforcement of banking regulations (Brownbridge and Kirkpatrick, 1999). Ever since then, the Microfinance market and the number of MFIs in Cameroon have been increasing. Today, there are over 850 registered MFIs in Cameroon. Under article 5 of the governing regulations, MFIs have been classified into three main categories; that is category 1micro finances, category 2 micro finances, and category 3 micro finances. for purposes of this work, we shall be focusing on category 3 microfinance. It should be noted that the central bank and COBAC acts as agent for the creation of micro finance establishments. The legislative framework and law enforcement of the MFIs are characterized by insufficiencies such as (1) the monitoring is not exhaustive. The organization of the COBAC stipulates that monitoring should be permanent and should be done using functioning computer tools in an identical way as those of banks to guarantee transparency and accountability. However, the accounting chart for MFIs in 2009 and only became applicable in January 2010. (2)MFIs have difficulties in mobilizing long term resources and to sign contracts of long term with their personnel to guarantee sustainability. (3) the prudential ratios are always standardized for the mutuality institutions of saving and credit co-operatives, which do not allow a good evaluation and comparison of the institution at the national as well as at the sub-regional levels. MFIs are regulated by COBAC/ CEMAC law and the OHADA law in Cameroon.

This study has been based on the Contingency Theory, the
Behavioral Theory, resource based view theory, and the Agency theory.

The Contingency Theory of Gordon and Miller (1970), asserts that an accounting information system should be designed in a flexible manner so as to consider the environment and organizational structure confronting an organization. Accounting information systems also need to be adapting to the specific decisions being considered. In other words, accounting information systems need to be designed within an adaptive framework.

The resource-based view theory was propounded by Barney in 1991. The resource-based view avers that the source of sustainable advantage derives from doing things in a superior manner; by developing superior capabilities and resources. The resource-based view proffers a means of evaluating potential factors that can be deployed to confer a competitive edge for business organizations.

The behavioral Theory of Kren and Liao (1988), holds that early behavioral theory
accounting research explored bivariate relations between control system characteristics(for example; reliance on accounting performance measures or budget participation) and various criterion variables (e.g., performance or dysfunctional behavior). Behavioral theory in accounting research evolved rather quickly, however, to more complex contingency models of the organization with a richer view of the organization and of individual behavior. The fundamental premise of contingency theory research has been that organizational structure and control system design is related to organizational context. Thus, the effects of control system characteristics are moderated by contextual factors which impact the individual and the organization, (Kren and Liao 1988).

The agency theory was championed by Jensen and Meckling in 1976. The agency theory describes the owners’ (principals’) delegated authority to manager (the agent) to run the firm on his or her behalf with the owners’ welfare depending on the manager accordingly (Jensen and Meckling, 1976). The agency theory seeks to address the potential conflict of interests between owners and managers, because the interests of managers may opportunistically utilize firm resources to satisfy their personal interests (Brammer and Millington, 2008). Basically, firms aim to maximize the wealth of shareholders, and it might be different with personal interest of managers.

 After thorough reviewing of the theories such as, the contingency theory, the behavioral theory, the resource based theory and the Agency theory. It is the behavioral theory that underpinned the topic under investigation that information system should be designed in a flexible manner so as to consider the environment and organizational structure confronting an organization. AIS accounting information systems need to be designed within an adaptive framework.

In this view, the study examined or investigates the effect of accounting information
system on the performance of MFIs in Cameroon, case of NTACCUL Buea and
find out how accounting information systems has contributed to most organizations
realizing the following results such as automated reports are generated, easy decision
making processes, data storage and retrieval of information, improves production level, efficiency and effectiveness. In Cameroon, there are many MFIs registered and operating where some have had some hurdle slinks to performance of their organizations. Although many factors may influence the performance of organization, there can be little doubts that the role of accounting information systems will be one of the most critical determinates of ultimate financial performance of MFIs operating in Cameroon.            

1.2 Problem Statement

The need of information is basic for concrete decision making and to ensure organizational growth. There has been a remarkable advancement in accounting information systems design for micro finance institutions to adapt for their operation. Adaption of accounting information systems by MFIs can resolve and support automation and procession of large amount of data and produce timely, quality and accurate information. Oguntimehin (2001) submitted that organizational Performance is the ability to produce desire results. Therefore, this is serious omission particularly as technology is changing, MFIs need to change to adapt information technology than relying on the use of manual approach of book keeping accounting which can be ineffective and inefficient thus, leading to delay in procession of reports, difficulties in retrieving of information, poor data quality and storage, delay in decision making regarding investments and low productivity experienced, (Maureen, 2014). However, if accounting information systems is not widely adopted by all or many MFIs in Cameroon, most MFIs will remained behind and be out competed by their rival firms or fail (Augustine, Maurine and Jian 2014).

          ICT deals with the application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data. Applying this in the context of business, it is designed to help management in their stewardship function, support management in their day-to-day operations and decision making. In the 1880, machines where invented to help in the accounting system. As years passed by, advancement on information technology also transform accounting information systems and its processes. There were many developments in AIS. This is designed to help in the management and control of activities related to firms’ economic and financial area. AIS are essential for majority of business entities. The advancements of technology have lead in the creation of AIS which is commonly adopted by business entities at present.  This created competitive market, and thus, entities need to improve their systems in order to match their information needs for better decision making.

     It is therefore, a call for concern to review a series of earlier researches that have been carried out relating to this topic like; Ironkwe and Nwaiwu in the year 2018 carried out a research on the effect of accounting information system on financial and non-financial measures of companies in Nigeria. Qualitative and quantitative data of 16 companies were obtained by the researcher from mainly the primary source of data collection. The data were obtained from questionnaires. One hundred and fifty (150) questionnaires were administered to the sample size, of which one hundred and twenty (120) correct questionnaires were collected back and used for the analysis. Data collected were analyzed using multiple linear regression techniques with the aid of statistical package for social science (SPSS). The empirical investigations found that accounting information system exert significant positive effect on financial and non-financial measures indicators of companies in Nigeria. Again Isa (2017) examines the impact of computerized accounting information system on management performance in public sector in Nigeria. The study adopted an exploratory research method. Data were obtained from secondary sources. The impacts of computerized accounting information system (CAIS) on the executives’ officers of government’s ministries, departments or agencies were considered in terms of accounting framework and operating procedure in the public sectors in Nigeria. The study concluded that the impacts of computerized accounting information system on the executives’ officers of government’s ministries, departments or agencies considered only accounting framework and operating procedure in the public sectors in Nigeria. Also Saeidi (2014) examines the impact of accounting information systems on financial performance. The study employed a survey research design and obtains data from 40 top managers in Tata consultancy services (TCS) companies in India through questionnaire. The study analyzed the collected data using the statistical package for social sciences (SPSS) and uses the one samples t-test statistics to test the hypotheses. Findings revealed that accounting information system has a significant relationship with knowledge and understanding of managers and accountants, decision making, financial performance and organizational resources. The study concluded that there is a positive relationship in Knowledge and understanding of managers and accountants, decision making, financial performance and organizational resources. And lastly, Dekeng and Prabowo (2015) also explore the empirical research investigating the relationship between accounting information systems alignment and small and medium enterprises performance. The study employs secondary data obtained from journals and publications. Results from the review revealed that Accounting Information System alignment is influenced by organizational characteristics, individual characteristics and situational factors which affect SMEs performance.

           So therefore, as information technology grows more progressively, the manual accounting systems have become gradually inadequate for decision needs. Consequently, public and private sector firms in both the developing and developed economies view accounting information system as a vehicle to ensure effective and efficient, information flow enhancing managerial decision-making , thereby increasing the firm’s ability to achieve corporate and business strategic objectives (Manson, McCartney, and Sherer, 2001). The experience of advanced countries is that managing accounting information system project requires considerable management skill. But sometimes, top managers may not be computer literates. The consequences is often the binding constraint, when introducing financial management information system is not the technical capacity to create them but the technical capacity to manage them (Keating and Frumkin, 2003). In most micro finance institutions funds from customers are poorly managed and their accounting systems are in poor order. Many MFIs do not have qualified accountants and have problems preparing accurate and timely financial reports, which is one of the major customer and stakeholder requirements. Since the 1950s, when technology started to be applied in business (otieno and Oima, 2013), most developing countries have gradually moved away from the use of manual accounting recordings to the use of accounting soft wares to facilitate generation of quality, quick and accurate financial reports. so therefore, the main concern of this research work is thus to examine the role of AIS on the performance of MFIs in Buea municipality (ntaccul).

It should be noted that one of the essential reason for AIS is for quality and timely accounting records, thus performance. Accounting records is a means of portraying financial accountability, in order for an organization to review the financial activities of the past year and make plans for the future it prepares and publishes annual financial reports (Collins 1978). These annual reports are in the form of statement of comprehensive income, statement of financial position, statement of changes in equity and statement of cash flow and other annually financial reports which provide an overview of the company’s current financial strength according to Samuel 1991. These financial reports provide information which is used in measuring the performance of the MFI. Again, this research work is aimed at bringing  results to the relationship that exist between AIS and quality financial statements.

Though With the so many advantages accruing from the adoption and implementation of AIS, there still exist some challenges that arose from the fusion of these systems. Sometimes, the systems can be at constant risk of hackers, power failures, viruses or at time loss of information. This therefore, is another worry of this research work which is to examine the challenges confronting the usage of AIS.

1.3 Research questions

After examining and considering the different opinion of previous authors in relation to the role of Accounting Information System on the performance of MFIs, it therefore becomes necessary for this research work to provide answers to the following questions.

Main question

What is the role of accounting information system on the performance of MFIs in Buea municipality?

Specific questions

Is there any relationship between systems quality and the performance of MFI Buea municipality?

What is the role of information quality in the financial performance of MFIs in Buea municipality?

What is the relationship between threats and the financial performance MFIs in Buea municipality?

1.4 Research objectives

The call for concern of this research work would include the following

Main objective

To ascertain the role of accounting information systems on the performance of MFI in Buea municipality, case of NTACCUL

Specific objectives

The specific objectives that drives this research work, is to;

Determine the relationship that exists between system quality and the performance of MFIs in Buea

Examine the role of information quality in the financial performance of MFIs, case of NTACCUL, Buea.

Find out if there is any relationship between systems threats and the financial performance of MFIs in Buea municipality.


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