International Journal of Corporate Finance and Accounting

Volume 5 • Issue 2 • July-December 2018

Applying Multiple Linear Regression

and Neural Network to Predict Business
Performance Using the Reliability of
Accounting Information System
Ahmed H. Al-Dmour, Brunel University, London, UK
Rand H. Al-Dmour, The University of Jordan, Amman, Jordan

ABSTRACT

This article aims to predict business performance using multiple linear regression and neural network.
It compares the accuracy power of ANN and multiple linear regression (MLR) using the reliability of
accounting information system as independent variables, and business performance as a dependent
variable. It is based on primary data collected through a structured questionnaire from 162 out 202 of
public listed companies in financial service sector in Jordan. The data were analysed using ANN and
MLR. Testing results of the two methods ANN and MLR confirmed that the business performance
indicators (financial, non-financial and combined) were significantly could be predicted by the
reliability of AIS and they also revealed that in terms of predictive accuracy test, the ANN has a
higher accuracy than regression analysis.

Keywords
Business Performance, Financial, Non-Financial, Reliability of AIS

1. INTRODUCTION

For the purpose of improving their business performance, both financial non-financial measures,
business companies employ accounting information systems, techniques and tools. The use of such
information systems (IS) becomes essential and justified by the need to enhance and bring efficiency
into being; a fact evidenced by most researchers. (Al-Dmour et al., 2018) At the increase of importance,
the performance of accounting information systems is prioritized highly and this is mainly led by
increased competition and revolution of business environment at various levels, especially on the level
of decision making, since such systems are adopted in such a way that is designed for aiding in decision
making and enhancing an organization’s competitive position. Furthermore, information technology
in business is essential as long as it is reliable and secure. System reliability in administration
primarily assures the validity of data and accounting framework. However, an unreliable system
can show a number of side effects, as mentioned by Boritz et al. (1999) and McPhie (2000) such
as regular system disappointments and accidents that deny inner and outside clients’ access to key

DOI: 10.4018/IJCFA.2018070102

Copyright © 2018, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.


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system administrations; failure to prevent unauthorized access to the system, making it vulnerable to
viruses, hackers and loss of data confidentiality; loss of data integrity, including defiled, inadequate
and invented information, and genuine support issues bringing about unintended negative reactions
from system changes, such as loss of access to system administrations, loss of information privacy or
loss of information trustworthiness, and unreliable system. Thus, the American Institute of Certified
Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) developed
a new assurance service called SysTrust, whereby a public accountant can write about the adequacy
of controls over the reliability of a system (AICPA, 2006).
Accounting information systems (AIS) researchers can and should employ their knowledge
of both technology and business to examine these issues. Furthermore, there is no clear empirical
evidence on the extent of the relationship between the reliability of AIS and business performance.
Therefore, this paper aims to compare and test the accuracy power of ANN and MLR model in
making prediction. It is expected that, the ANN can be used as adequate model due to its ability in
self-learning which impacts to providing a better prediction. According to the authors’ knowledge,
this paper might be considered to be the first one has attempted to compare ANN and MLR model
for performing business performance prediction using reliability of AIS as independent variables.
Furthermore, the study aims to overcome the limitations of the previous studies, and to improve
understanding of the importance of the reliability of the AIS process in the environmental context of
Jordanian organizational culture as a developing country (Masa’deh et al., 2015).

2. LITERATURE REVIEW

Accounting Information System (AIS) has been recognised as one of the most important tools for
measuring and reporting the activities and the profitability of the business organizations (Mansour,
2016). The real importance of adopting and use of information technology in the structure of AIS
comes from the fact that it redesigned the internal AIS financial control in the direction of promising
larger operational efficiency, it aligned the company’s functions to meet the needs of e-business, as
well as it resulted in an objective and trustful performance. However, this heavy reliance of today’s
businesses on the use of information technology makes the reliability of their AIS very critical.
According to the AICPA (2013), The reliable system is defined as: “…a system that operates
without material error, fault or failure in system availability, privacy, integrity, and maintainability
during a specified time in a specified environment…” (Saitio, 2012). The core importance of a
reliable computing system is specifically identified by the developers of the SysTrust project:
The computing system – are running business, producing products and services and dealing with
consumers and business partners… As business dependencies on information technology increases,
tolerance decreases for systems that are unsecured, unenviable when needed, and unable to produce
accurate information on an instant basis. Like the weak link in a fence, the unreliable system can
cause a chain of events that negatively affect the company and its customers, suppliers and business
partners (ACICPA/CICA, 2013). SysTrust is an assurance service that independently tests and
verifies a system’s reliability. The AICPA succinctly describes the overall purpose of SysTrust in
the following way: developments in information technology provide far greater power to companies
at far lower costs. As business dependence on information technology increases, tolerance decreases
for systems that are not secure, and these systems become unavailable when needed and unable to
produce accurate information on a consistent basis. An unreliable system can cause a chain of events
that negatively affect a company and its customers, suppliers, and business partners (Al-Dmour, et
al., 2018; Hunton, 2002).
In recent years, firm performance has received considerable attention as a substantial academic
subject for investigating in the financial and management literature. Researchers and academicians
have chosen different approaches for the exploration of this issue. In the previous studies, the effects
of using AIS have analyzed on business performance by financially and non-financially. Researchers

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have always looked at business performance as the ultimate goal concerned with almost every area
in management. This is because business performance allows researchers to evaluate organizations,
their actions, and environments and compare them to those of their competitors (Richard et al., 2009).
Existing literature offers scant evidence of the relationship between these AIS and performance
measures; though it is important to highlight the study made by Ismail and King (2005) which
discovered a positive association between AIS alignment and SME strategy and performance
measures. In the Spanish case, Naranjo-Gil (2004) posits an indirect relationship between AIS and
firms’ performance via the varying strategies that may be adopted by companies.
Most literature suggests that when it comes to business performance, researchers find it difficult
to define, conceptualize, and measure this concept (Taghian, et al., 2015). Regarding the definition
of business performance each author tends to have a different conceptualization of performance in
general and business performance in particular. For example, Anderson and Reeb (2003), Petersen
and Schoeman (2008) consider performance as a calculation of how well a company can use its assets
from its primary method of business and produce revenues. Where, modern literature sees performance
as a result of the actions of a company or investment over a specific time. Performance has also been
defined as the achievement of particular business objectives calculated against recognized standards,
totality and cost (Davis and Cobb, 2010; Özer, 2012). Mawanda (2008) also defines performance as the
ability to operate efficiently, profitability, survive grow and react to the environmental opportunities
and threats. Performance is assessed by how efficient the enterprise is utilizing resources in achieving
its objectives. It is the degree of achievement by an individual, team, organization or process. Other
definitions consider performance as the outcome of approaches which the company uses to accomplish
market-oriented and financial aims (Harash, et al., 2014).
In business studies, Richard, et al. (2009) see that performance encompasses three areas of
company outcomes: (i) financial performance, such as return on assets, return on investment, profits;
(ii) market performance, such as sales, share, market; (iii) shareholder return, such as economic value
added, total shareholder return. So, based on the above-mentioned literature, financial measures of
performance can be considered as the results of a company’s operations in monetary terms. Financial
measures of performance are linked to the accounts of a company or can be originate in the company’s
profit and loss statement or the balance sheet. Furthermore, financial measures are also defined as
objective measures as they can be individually measured and established. But it is key to introduce
nonfinancial measures of performance as well as financial measures, in order to have the optimal
measure of performance (Petersen and Schoeman, 2008; Selvarajan, et al., 2007). The non-financial
measures are also known as the subjective performance measures of performance (Petersen and
Schoeman, 2008).
A literature review draws attention to the fact that a combination of financial and non-financial
measures has become a popular framework in various fields such as economics, strategy, finance
and accounting (Porter, 1992; Handy and MacDonald, 1989). This will provide a complete picture
of business performance from both quantitative (objective) and qualitative (subjective) perspectives.
Depending on the context, performance measurement may require indicators that are difficult to access
(Ketokivi and Schroeder, 2004). They propose that objective performance measures are less fitting for
nonfinancial performance measurement and for inter-firm comparison, particularly when firms have
diverse ways of registering information. In these cases, researchers (Forker, et al., 1996; Slater and
Olson, 2000) should embrace subjective measures and request informants to compare performance
criteria in relation to a benchmark. The critique over subjective performance indicators is that they rely
on human reasoning and knowledge. As a result, the data may be over- or underestimated, may suffer
from halo effects or may be subject to conjecture (Ketokivi and Schroeder, 2004; Richard, et al., 2009).
Nonetheless, subjective and objective performance indicators have proved to be positively correlated
(e.g., Venkatraman and Ramanujam, 1986; Wall, et al., 2004, Antonio and Machado-Cabezas, 2015).
These studies tested mainly financial measures and found statistically significant correlations
(p less than 0.5) ranging from 0.44 to 0.69. Correlations are not particularly high, but they are

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significant and positive, demonstrating that subjective and objective measures all point in the same
direction. Furthermore, when objective and subjective performance measures were correlated to
other constructs, similar results in terms of significance and magnitude were found for both types
of measure (Wall, et al., 2004). An important issue has evolved with respect to the relevance of the
exclusive use of traditional financial criteria (financial measures) with respect to other non-financial
criteria. For example, Falshaw et al. (2006) have noted that financial measures of performance can
capture only one slice of the company’s profitability. Furthermore, subjective scale measures have
been commonly featured in the business literature and supported it as a valid and reliable method
(e.g., Chenhall and Langfield-Smith, 1998; Otley and Bisby, 2004; Hoque, 2004). So, these results
maintain that subjective measures can be used to assess the firm’s performance and probably lead to
convergent results of different magnitudes. In this context, Ketokivi and Schroeder (2004) support
practices aimed at improving validity and reliability, such as collecting data from multiple respondents,
and using diverse methods and indicators. Therefore, in this study, both dimensions of business
performance; financial and non-financial performance will be used to measure business performance
either separately or together using reliability of AIS

3. THE STUDY’S CONCEPTUAL FRAMEWORK

Theoretical background and empirical studies on the importance of AIS as well as the relevant
theoretical literature on business performance were reviewed and integrated to develop a conceptual
framework to guide this study. The model proposed here is used in order to investigate whether
business performance could better predicted by the reliability of AIS using MRA and ANN. The major
constructs of the study’s model are presented below Furthermore, the expected relationship among
these constructs are clearly defined and discussed throughout the presentation of each constructs.

3.1. Dependent Variable: The Business Performance Dimensions

Despite the dearth of research available on separate performance dimensions. The choice of adequate
performance measures is likely to be influenced by the several contextual factors identified in the
contingency-based research (Chenhall, 2003). In response to the debate relating to the advantages
and disadvantages of considering financial or non-financial performance measures and the
appropriate choice of measures, some empirical evidence indicates that financial and non-financial
measures are not substitutes, but that non-financial measures are used as supplements to financial
measures. Yet effective frameworks of performance measures that integrate both financial and
non-financial measures have developed. Such frameworks are based on the fact that management
accounting information systems cannot solely be based on financial information (Berrah et al.,
2006); a combination of financial and non-financial information is needed to give a more balanced
representation of the overall performance of the organization (Hoque and James, 2000; Laitinen,
2002). An examination of the performance measurement systems in the literature demonstrates that
many management accounting scholars (e.g. Malina and Selto, 2001; Laitinen, 2002; Drury, 2008;
Elg and Kollberg, 2009) incorporated non-financial performance measures, as an essential part of
management information system.
As far as operationalization of performance measures is concerned, apart from the dimensionality,
another challenge is the selection of the kind of measure, i.e. objectives subjective measures. Several
scholars have argued the necessity to use subjective performance measures as a substitute for objective
measure (Vij and Bdi 2016, Masa’deh, et al., 2015, Wall et al. 2004 and Kim et al., 2004). The use of
subjective measurements for business performance is made more necessary by the relative difficulty
of gathering objective financial data. Either these types of data are unavailable, or they are obscured
or manipulated by managers eager to protect their firms’ reputations or avoid personal or corporate
taxes. In addition, subjective measures would allow comparison across firms and contexts, such as
industry types, time horizons, cultures or economic condition (Vij and Bdi 2016). Indeed, it could be

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a good alternative if the measures focus on the firm’s current condition and the objective data may
not be compatible with the intended level of analysis (Wall et al., 2004). Furthermore, subjective
scale measures have been commonly featured in the business literature and supported it as a valid and
reliable method (Masa’deh, 2015). Therefore, these results maintain that subjective measures can be
used to assess the firm’s performance and probably lead to convergent results of different magnitudes.
In the validation issue, for example, Dess and Robinson (1984) state that subjective measurements
are strongly correlated with objective measurements in terms of the absolute changes in return on
assets and sales, over the same time period. For example, the result of the correlation (r) between
objective and subjective measures to total sales gives a value for r of .80, and to ROA gives a value
for r of .79. This supports the validity of the performance evaluation through subjective measures.
Based upon these above arguments, this study will use subjective measures for both dimensions of
business performance (financial and non-financial) since recording standards of objective indicators
vary across firms and industries. The respondents will be asked to point out the degree of their business
performance relative to industry /service sector average using a seven-point Likert scale with anchors
‘very low’ to ‘very high. Comparing the firm’s performance relative to its industry or service average
is considered reasonable and preferable when researchers interested in measuring firm performance
across industries with subjective indicators (Santos and Brito, 2012). The items making up this scale
were divided into two subscales: financial performance (e.g.: return on assets (ROA), return on equity
(ROE), sales growth, market value, and profitability growth), and non-financial performance (customer
satisfaction, employees satisfaction, shareholder satisfaction, environmental performance, and social
performance). These most common measures were selected in order to facilitate the comparison with
the findings of prior studies in this filed (Table 1).

3.2. The Reliability of AIS

According to the AICPA, SysTrust is an assurance service that independently tests and verifies a
system’s reliability. It is assumed expect that any system that satisfies the SysTrust principles and
criteria should be viewed as being more reliable and thus be trusted more than one that does not. In
other words, trust in the system of specific provider is influenced by the extent to which the system
meets the SysTrust principles. It is referred to as trust in system reliability in the present study.
According to the AICPA, SysTrust is an assurance service that independently tests and verifies a

Table 1. The business performance dimensions

Description References
Financial Performance
Shareholders satisfaction Dozier and Chang, (2006); Benner and Veloso, (2008);
Santos and Brito, (2012); Ejoh and Ejom (2014)
Employees satisfaction
Customer satisfaction
Social performance
Environmental performance
Non-Financial Performance
Economic value added (EVA) Tuanmat and Smith (2011), Santos and Brito, (2012);
Antonio Pérez-Méndez, Ángel Machado-Cabezas, (2015)
Return on equity (ROE)
Return on assets (ROA)
Return on investment (ROI)
Level of profitability (Net margin)

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system’s reliability. Depending on that assessment of the reliability of a system, a set of principles and
criteria exists which are classified into five categories that are mainly relevant to systems’ reliability
and the reliability of an organisation’s financial data reporting as follows (AICPA, 2017):

1. Availability: Agreed and committed system and information thereof that are used for operations
(legal obligation);
2. Security: Protected systems against unauthorised access - physically and logically;
3. Confidentiality: Confidential information that is protected as committed to or agreed;
4. Processing Integrity: Processing data accurately, fully, in due timing and exclusively with
proper authorization;
5. Privacy: Gathering, usage, disclosure, maintenance of personal information and its
protection from unauthorised disclosure in accordance with internal policies and external
regulatory requirements.

These principles can be used individually or in combination in order to provide the relevant
stakeholders who have an interest on the reliability of AIS process (top management, auditors,
suppliers, governments, customers, and business partners) and in levels to ensure that the system
actually works objectively and mechanically to ensure less risky levels.

4. RESEARCH HYPOTHESES

Based upon the study’s conceptual framework, the study hypotheses are formulated and proposed
as summarized as below:

Ho (1): The reliability of AIS will have a significant relationship with non-financial business
performance dimension; taken alone.
Ho (2): The reliability of AIS will have a significant relationship with financial business performance
dimension; taken alone.
Ho (3): The reliability of AIS will have a significant relationship with both dimensions of business
performance (combined); taken together.

5. RESEARCH METHODOLOGY

5.1. Study’s Population

To obtain the empirical data needed to validate the study’s conceptual framework and examine the
research hypotheses, a self-administered questionnaire was used to collect the required data from the
key respondents. The target respondents were the accounting and auditing managers in the financial
service public listed companies in Amman Stock Market (2017). Table 2 demonstrates the size of
the study’s population.
A total of 202 self-administered questionnaires were distributed to the respondents by e-mail,
postal, and hand from and the response rate was 80% after a period of sixteen weeks and two follow-
up reminders. Researchers have gained support from several official bodies in collecting data and

Table 2. The domain of the study’s respondents

No. of Companies No. of Respondents* Percentages

202 162 0.80
Sources: ase.com.jo 2017

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motivating companies to response and collaboration including University of Brunel, Chamber of

Commerce, Jordanian bank Association, Ministry of Higher Education and Ministry of Industry and
Commerce. Initially, the research assistants called the companies to have appointments to distribute
copies of the questionnaire to their companies. After the respondents answered the questions,
the assistants collected the copies from them. In editing stage, the responses were reviewed for
completeness and 16 questionnaires were eliminated because the respondents either failed to respond
to all item measures for latent constructs used in this study or responded “no basis for answering”
to some of the item measures.

5.2. Measurement Instrument

The survey instrument is based on constructs validated in prior research, standardized and revised to the
context in this study. In this survey, some variables are factual (for example, companies’ demographic
information such as the type of sector, number of employees, number of years in business), whereas
others are perceptual (reliability of AIS and business performance). The dependent (i.e. business
performance dimensions) and the independent variables (reliability of AIS) were measured using a
seven-point Likert scale. The questionnaire’s content (constructs and measures) were mainly selected
from the AICPA framework (2017), and prior relevant studies and they were modified to the practice
of Jordanian public listed companies’ culture context based on the results of a pilot study and feedback
from five professional academic staff in this field.

6. DATA ANALYSIS TECHNIQUES

For the analysis, the collected data was coded into SPSS Version x. The analysis part consists of
several different statistical analyses and tests including MRA and ANN.

6.1. Development of Multiple Regression Analysis Model

The developed MRA model has five independent variables (reliability of AIS: availability, security,
integrity processing, confidentiality and privacy) and three dependent variables; business performance
indicators (financial, non-financial and combination). The multiple regression analysis technique is
used to examine the study hypotheses. Table 3 summarizes the results of multiple regression analysis,
with the F-ratio test, for the study hypotheses (Ho1, Ho2 and Ho3). The results indicate that each of
these hypotheses is correlated significantly with each business performance indicators at 0.000 level
of significant. Accordingly, it may be concluded that there is a significant relationship between the
reliability of AIS and business performance (financial, non-financial and combination). This result
empirically proved that the business performance indicators could be predicated significantly by the
reliability of AIS.
According to the multiple regression model, the factors of reliability of AIS which highly
correlated with each dependent variable (i.e. financial and non-financial, combination) are
expected to enter into the regression equation. The F value at 0.00 level of significance is

Table 3. A summary result of the multiple regressions: The business performance

Std. Error
Adjusted R Durbin-
Hypotheses Dependent R R Square of the F-Sign
Square Watson
Estimate
Ho1 Financial 0.681a 0.463 0.455 0.64222 1.364 0.000b
Non-
Ho2 0.724a 0.523 0.516 0.65597 1.255 0.000b
financial
Ho3 Combined 0.732a 0.536 0.529 0.59469 1.243 0.000b

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used to determine the “goodness of fit” for the regression equation. The F value is the ratio
of explained to unexplained variance accounted for by the regression equation, when the total
variance accounted is low, interpretation of the individual beta coefficient has little meaning
(SPSS, 2016). Therefore, when the adjusted R square is around 0.10 or above and the F value
of the regression equation reaches to 0.05 level of significance, the individual beta weight
is prior to interpreting the results of the multiple regression analysis, several assumptions
were evaluated. First, stem-and-leaf plots and box plots indicated that each variable in the
regression was normally distributed and free univariate outliers. Second, inspection of the
normal probability plot of standardized residuals, as well as the scatter plot of standardized
residuals against standardized predicted value, indicated that the assumptions of normality,
linearity and homoscedasticity of residuals were met.
Also, in this study the severity or degree of multicollinearity is tested by examining the
relative size of the pairwise correlation coefficient between the explanatory independent factors.
An examination of the correlation matrix indicates that the correlation for each coefficient is less
than about (0.50). Therefore, it is possible to interpret the findings since the multicollinearity
is not severe (Hair, et al., 2010). Hair et al. (2010) recommended assessing the tolerance and
variance inflation factor (VIF). Tolerance refers to the assumption of the variability in one
independent variable that does not explain the other independent variable. The VIF reveals much
of the same information as the tolerance factor. The common cut off threshold is a tolerance
value of 0.10, which corresponds to VIF value above 10. Multicollinearity was indicated in
a tolerance level of less than 0.10 or a VIF value above 10. The tolerance l value for each
independent variable which above the ceiling tolerance value of 0.10, is in consistent with
the absences of serious level of multicollinearity. This judgment was further supported by a
VIF value for each independent variable above the threshold value of 1.0. For more details
as presented in Table 4.
The results of multiple regression analysis also show that the combination of the two business
performance indicator (i.e., financial and non-financial) give slightly better explanation (predictive
power) than upon each factor acting alone by the reliability of AIS. The rate of explanation which
they account for is increased from 46% (financial performance) and 51% (non-financial performance)
to about54% as presented in Table 4.
The importance factors of reliability of AIS that related to each type of business performance
(i.e., financial, non-financial and combined) are summarized in Table 5. This conclusion implies that
a better understanding of the impact reliability of AIS upon their business performance requires that
the two dimensions of financial and non-financial performance should be viewed and investigated
together rather than only viewing each of them alone. Furthermore, viewing non- financial performance
alone would also give better understanding than viewing -financial performance alone. This result is
supported by Onaolapo and Odetayo (2012).

Table 4. Collinearity diagnostics: The reliability of AIS

Constructs Construct Reliability(CR) Average Variance Extracted (AVE)

Confidentiality 0.879 0.646
Availability 0.832 0.555
Privacy 0.897 0.686
Integrity Processing 0.873 0.633
Security 0.901 0.694
Business Performance 0.875 0.780

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Table 5. A summary of the multiple regression analysis: The importance of reliability of AIS factors related to
business performance

Reliability of AIS Factors Financial Non- Financial Combined

Availability 5 2 4
Security 3 5 5
Integrity Processing 4 4 3
Confidentiality 2 3 2
Privacy 1 1 1

6.2. Results of Artificial Neural Network

The aim of using linear models and neural networks, multilayer perceptron in order to predict the impact of
the reliability of AIS using SysTrust’s framework (the five main principles and related criteria) on business
performance indicators (financial and non-financial and combined). The recent upsurge in research activities
into artificial neural networks (ANNs) has proven that neural networks have powerful pattern classification
and prediction capabilities. ANNs have been successfully used for a variety of tasks in many fields of business,
industry, and science. Comparison of neural nets with more multiple regression analysis techniques has been
the focus of many recent studies. To do so, neural network models were built using the Weka data mining
tool (Witten et al., 2016). The ANN multilayer perceptron algorithm was used for training neural network
models with three layers consisted of an input layer, a hidden layer, and an output layer. In order to avoid
the overfitting problem of generated models, cross validation procedure was applied. The number of hidden
layer nodes was determined through trial and error, since there is not a mathematical model or heuristic to
determine the exact number of hidden nodes for predetermining the optimal number of hidden layer nodes
(Tu, 1996). The number of hidden layer neurons was selected to lead to a predictive network with the best
performance (accuracy). Accordingly, the NN model was run by changing the number of hidden nodes from
one to ten. Activation function in hidden layer was a hyperbolic tangent.
There are several ways to check the accuracy of the study assumptions, some are printed directly in
R within the summary output and others are others are just as easy to calculate with specific functions.
For examples, Mean Absolute Error (MAE) and Root mean squared error (RMSE) are two of the most
common metrics used to measure accuracy for continuous variables. Both MAE and RMSE express
average model prediction error in units of the variable of interest. Performance of the two methods
under study, namely multiple linear regression and artificial neural network, in predicting the business
performance is measured by using R. square score, F. Ratio and Mean Square Error (MSE). The same
data obtained from the regression analysis is used to determine the mentioned values.
Using these statistical criteria as shown in Table 6, the results demonstrate that the artificial
neural network outperformed the multiple linear regression models. The neural network gives value

Table 6. Performance comparison between ANN and MRA model using statistical criterion

Statistical Model Input Output R. Square Score F. Ratio Score Mean Square Error

Reliability of AIS Combined 0.536 0.786 0.594

Multiple Regression
Results Reliability of AIS Financial 0.463 0.673 0.642
(MRA)
Reliability of AIS Non-financial 0.523 0.747 0.655

Reliability of AIS Combined 0.580 0.731 0.350

Neural Network
Results Reliability of AIS Financial 0.510 0.586 0.380
(ANN)
Reliability of AIS Non-Financial 0.563 0.705 0.410

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of estimation mean square error (MSE) less than linear relationship in all business performance
predictions models (financial, non-financial and combined). Furthermore, the predictive ability of
the artificial neural network (ANN) is very high and gives a highly accurate prediction as a result of
pattern recognition or generalization made by the network.
The neural network shows R. square scores (R2) is higher than linear relationship for all predictive
measures used in this study. The performance of the network during the training phase is very high
for different numbers of neurons. The testing data set gives the lowest mean square error (MSE) value
when the network contains five hidden neurons. For example, the testing data gives a low R2 value of
about 0.580 for business performance. This value indicates the proportion of total variation explained
by the results is about 58%. Results are said to be satisfactory if the R2 value is more than 0.80.
Nevertheless, results obtained from the network have a higher R2 value than the multiple linear
regression model. Based upon this comparison, it may be concluded that ANN model can be used
for predicating the impact of the reliability of AIS on business performance indicators (financial and
non-financial); either taken separately or together due to its better performance compared with MRA
model. The results of these two tests (ANN and MRA) confirmed that the business performance
indicators (financial or non-financial or together) could be predicated by the reliability of AIS. The
Table belows (7) showed up the relative importance of each predictor variables (factors) for three
business performance indicators (financial and non-financial and combined). Based on both tests
MRA and ANN, as shown in Table 7, privacy is the most important independent variable in predicting
the business performance indicators.

7. RESEARCH CONCLUSION, CONTRIBUTIONS, AND IMPLICATIONS

The results provide empirical evidence that the business performance indicators (financial. non –
financial and combined) could be predicated by using the reliability of AIS as a predictor variable.
This result supports the proposition that reliability of AIS positively linked to both business
performance indicators (financial and non-financial) either taken separately or together. Therefore,
a better understanding of the influence of reliability of AIS upon business performance indicators
could viewed as a together or individually. However, the study’s findings show that the powers of
influence of the reliability of AIS upon both business performance indicators together (combined)
is better then taken each indicator separately.
In order to understand whether a multiple regression analysis or an ANN is making good
predictions, the test data which has never been presented to the network is used and the results are
checked at this stage. The statistical methods of R. square score, F. Ratio and Mean Square Error (MSE).
values have been used for making comparisons. The same data obtained from the regression analysis
is used to determine the mentioned values the results demonstrate that the artificial neural network

Table 7. The relative importance of reliability of AIS factors related to business performance indicators based on MRA and
ANN analysis

Business Performance Financial

Non-Financial Performance
Predictors (Combined) Performance
MRA ANN MRA ANN MRA ANN
Availability 4 4 5 2 2 5
Security 5 5 3 4 5 3
Integrity 3 2 4 5 4 4
Confidentiality 2 3 2 3 3 2
Privacy 1 1 1 1 1 1

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Volume 5 • Issue 2 • July-December 2018

outperformed the multiple linear regression models. The neural network gives value of estimation
mean square error (MSE) less than linear relationship in all business performance predictions models.
Furthermore, the predictive ability of the artificial neural network (ANN) is very high and gives a
highly accurate prediction as a result of pattern recognition or generalization made by the network.
The neural network shows R. square scores (R2) is higher than linear relationship for all predictive
measures used in this study. In summary, the results show that the neural network model which is
non-linear generates a better fit and forecast of the data than the regression analysis, and that the
neural network model is able to capture more sophisticated non-linear integrating effects in business
performance decisions. Both ANNs and regression analyses indicate the positive relationships.
In terms of theoretical contributions, this study has extant reliability of AIS and business
performance literature by providing the following. First, it is explained the relationships between
the reliability of AIS and the business performance measures (financial and non-financial). Previous
research examined and linked reliability of AIS with only financial performance using MRA (Casolaro
and Gobbi, 2004 Mansour et al., 2017). Second, testing the role of the reliability of AIS in the
predication of business performance in a new context culture using ANN (i.e. Jordan as a developing
country) considered another contribution for the current study.
This study has also important implications for studies aiming to understand the relationship
between reliability of AIS and business performance in developing countries. Although Jordan is
a valid indicator of prevalent factors in the wider MENA region and developing countries, the lack
of external validity of this research means that any generalizations of the research findings should
be taken with caution. Future research can be conducted in other national and cultural settings and
compared with the results of this study. The data analysis was cross-sectional. As with all cross-
sectional studies, the parameters tended to be static rather than dynamic. This drawback limits the
generalization of the study’s findings to further situations and beyond the specific population from
which the data was gathered. Future longitudinal studies could provide a better understanding of the
implementation of innovation over time. In conclusion, in order to have a clear picture, Jordanian
business organizations should comprehensively understand and give more attention to the reliability
of AIS for enhancing the business performance, either financial or non-financial performance.

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Volume 5 • Issue 2 • July-December 2018

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Ahmed Al-Dmour is a PhD student at Brunel University.

Rand Al-Dmour is an assistant professor of MIS, Department of Management of Information system, School of
Business, the University of Jordan.

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