SORSOGON STATE UNIVERSITY

Bulan Campus

Zone8, Bulan, Sorsogon, 4706

EXTENT OF IMPLEMENTATION OF ACCOUNTING INFORMATION SYSTEM OF

BUSINESS ENTERPRISES BULAN, SORSOGON

In Partial fulfillment of the Requirements of

Bachelor in Science of Accounting Information System

Major in Accounting Research

Submitted to:

Professor Randy G. Delumen

Submitted by

ALTICHE, Airene B.

GAVARRA, Marie Joy

GENETIA, Jodelon Q.

HONA, Nikki Jean

JAVIER, Samantha

MACAREZA, Dazzel B.

December 2021
 CHAPTER 1

INTRODUCTION

A. Background of the Study

In recent years, firms have begun to change at an increasing rate and accounting
information system is one aspect of the way businesses have started to adapt to
globalization technology; any change is dependent on data and information; in order
to improve an international accounting information system or to make it more
successful, businesses should collect high quality data that will result in high quality
information about this enterprise; this information will serve as the foundation for
planning, controlling, and reporting and make the best decisions possible. (Borthick
and Clark, 1990; Curtis, 1995; Rahman et al., 1988; Wilkinson, 1993; Wilkinson et
al., 2000). That is why businesses must invest in information technology (IT) systems
to improve business control and decision-making. Small and medium-sized
enterprises (SMEs) may face difficulties when implementing IT systems due to their
limited financial resources. However, in order for them to be competitive in a
challenging business environment it leads them to implement an AIS which always
been an important tool for enterprises to achieve better financial performance.
(Diavastis et al., 2012)

In the development of business world Accounting Information System (AIS) is

needed to support operational activities and decision making. Accounting Information
Systems (AIS) are a tool which, when incorporated into the field of Information and
Technology systems (IT), were designed to help in the management and control of
topics related to firms’ economic-financial area. But the stunning advance in
technology has opened up the possibility of generating and using accounting
information from a strategic viewpoint. Since this is important for all firms, it is more
important even for medium-sized and small ones which need this information to deal
with a higher degree of uncertainty in the competitive market (El Louadi, 1998).
Thus, they need to improve their systems and data processing capacity to match their
information needs (Van de Ven and Drazin, 1985). Investing in staff training,
improving the quality of products and internal processes and increasing AIS
investment will be the leverage for achieving a stronger, more flexible corporate
culture to face continual changes in the environment. Innovation is the incentive with
which a virtuous circle will be put in place, leading to better firm performance and a
reduction in the financial and organizational obstacles, while making it possible to
access capital markets.
 The creation of new accounting systems, enhanced economic models, and internet-
based commercial transactions are all products of information technology (IT)
advancement. By enabling more and better commercial transactions and
communication, these improvements have reduce time, cost, and money. By
computerizing current processes to increase operational performance, many firms
utilize information systems to progress and improve the efficiency of commercial
transactions. The management of an organization and the implementation of an
internal control system both depend heavily on accounting information systems. The
main objectives of an accounting information system (AIS) are to maintain
operational effectiveness and efficiency as well as to gather and record information
and data related to issues that could have an economic impact on businesses. (Yang et
al 2012). Hence, computerized accounting tools are directly related to the economic
and financial results and productivity in small and medium-sized business
organizations. (Cramm, 2008).

Furthermore, success in the implementation of Accounting Information System

(AIS) is critical to micro-enterprises because one of the most challenging
responsibilities involved in running a business is managing finances, no matter how
big or small a business is, it needs an accurate flow of financial and accounting
information through several channels. For this reason, the collection, storage, and
processing of the data must be done in a systematic and automated manner in order to
produce meaningful financial reports. That is why the functions of accounting
information system (AIS) are crucial for any organization nowadays. According to
Faisal (2022), that is simply because it helps businesses by ensuring optimal accuracy
in their financial reporting and transactional record-keeping wherein the information
is readily available to the respective authority whenever they need it. Thus, an
accounting information system facilitates the decision-making process of a company.
Moreover, accounting information system are businesses’ instrument or tool used to
keep track of their finances, reports, transaction and other accounting data for it
enables the decision-makers to comprehend the general state of a business in order to
cope with appropriate actions. In addition, (Diavastis et al., 2012) stated that AIS
implementation will enable managers to improve decision making process taking
advantage of high quality financial information, with a view to improve financial
performance.

Nowadays, using AIS is a must in many businesses. It is difficult to gain

competitive advantage and survive without some adoption or implementation of this
advancement in technological products. Studies have shown that the most widely use
of AIS, specifically in financial reporting aspects (Marriott & Marriott, 2000;
Riemenschneider & Mykytyn Jr., 2000; Ismail, 2007. An optimal implementation of
AIS by SMEs means adapting more successfully to a changing environment and
shows a high degree of competitiveness, thus enhancing the dynamic character of a
company (even when a company is small, it must assimilate the use of AIS). In other
words, there are improvements in administrative management regarding accountancy
and finance. By using AIS, it is possible to gauge the risk of some operations or
predict future earnings with sophisticated statistical software applications. All these
benefits have been developed and tested in larger companies and it should be possible
to extend them to SMEs.

Currently in Spain, in the majority of area, information society and the new
computer tools have allowed the companies to make a better use of their accounting
systems in their relations with suppliers and customers. In the same way the
development of the electronic banking allows the companies to save a lot of time in
their transactions moreover AIS have fastened tax management. On the other hand, to
what extent this investment in specific technology for the economic-financial area is
related to performance and productivity indicators is a question as yet insufficiently
analyzed. Studies have been made by many authors regarding the potential IT
contribution, in general, to increasing SME productivity. The latter, even in moments
of crisis such as the present time, opt for the need to continue investing in this type of
technology to achieve continuous company improvement (Cramm, 2008). AIS are
systems used to record the financial transactions of a business or organization. This
system combines the methodologies, controls and accounting techniques with the
technology of the IT industry: user interface, computers and sophisticated software.
The software used to track transactions provides internal reporting data, external
reporting data, financial statements, and trend analysis capabilities. The research work
has focused on SMEs because these firms in Spain account for more than 90% of the
country’s business (Central Companies Directory, 2010).

Now that small and business enterprises (SMEs) has been arising in the
Philippines. Small and medium-sized enterprises in the Philippines plays a vital role
in the economic growth. More than half of the total businesses in the Philippines are
composed of SMEs. AIS is being a factor that need to be considered weather it will
create a positive and negative impact to SMEs. Information and communication
technology(ICT) has brought major changes to large major business industries the
Philippines, it is still unsure that it will bring the same to SMEs. According to Elliot
(2002), accounting is one among the important business areas facing unprecedented
challenges thanks to the rapid development of IT. Knowing the fact that they has a
big contribution in the Philippine economy, not all the small and medium-sized
enterprises has the capabilities on having the accounting information system which
 they can use in improving the quality of the financial information that they are
providing. These are aspect of accounting practices reformed fundamentally by
advances in IT, including financial reporting, managerial accounting, auditing and
taxation (Scapen and Jazayeri, 2003; Chade and Best, 2005). These are still small
enterprises that uses a manual approach of recording, storing and reporting of
financial data because of the cost of acquiring such syatem. Small and medium- sized
of enterprises also rely on the reliability of the information that are produced by the
accounting system itself. These small scale of businesses may not have the best
quality of information unlike to those large scale of businesses. SMEs has lower
employment or much lesser operational transactions. With this, the brains working in
an organization is also limited. SMEs may have their own accounting information
system or they may not have for the reasons of the accuracy and capability of such
firms. The 2020 List of Establishments of the Philippine Statistics Authority (PSA)
recorded a total of 957,620 business enterprises operating in the country. Of these,
952,969 (99.51%) are MSMEs and 4,651 (0.49%) are large enterprises. Micro
enterprises constitute 88.77% (850,127) of total MSME establishments, followed by
small enterprises at 10.25% (98,126) and medium enterprises at 0.49% (4,716).

Therefore, this study will discuss and measure the extent of implementation of
accounting information system in connection with the demographic profile of micro
enterprises in Bulan, Sorsogon as well as to identify the challenges of managers in
implementing Accounting Information System. The researchers chose to study this
problem because this study will aid readers who will work in business in the future to
comprehend how accounting information systems are used nowadays to assist
businesses in many ways. Given that AIS is a system that has technology integration,
it may not be enough reason for the micro business to succeed in presenting and
reporting financial information.

B. Statement of the Problem

This study seeks to determine The Extent Of Implementation Of Accounting Information

System Of Business Enterprises Bulan, Sorsogon. Specifically, it aimed to answer the
following question:

1. What is the profile of Micro Enterprises in Bulan, Sorsogon in terms of:

a. type of business
b. b. work-force size
 c. capitalization

2. What is the extent of implementation of Accounting Information System of business

enterprises in Bulan. Sorsogon?

3. Is there a significant relationship between the profile of business Enterprises and the
extent implementation of Accounting Information System?

4. What are the challenges of the managers in the implementation of Accounting

Information System?

5. What can be proposed based on the results of the study?

C. Hypotheses

D. Scope and Delimitation

E. Significance of the Study

We will assess the significance of our research. The bulk of internal stakeholders,
including management and accountants or financial managers, as well as some external
stakeholders, such investors, are specifically touched by this study. Additionally, it will
be useful for researchers and students.

• Knowing the procedures that took place to produce the financial report in the manner it
is can be helpful to management. Additionally, he will be knowledgeable of the
significance of an accounting information system for the efficient and effective
management of businesses.

• Accounting professionals or financial managers will find it useful for case gathering,
analysis, and report creation.

• Other internal stakeholders of the company will also benefit from the time savings since
specialization is a simple process.

• This research will assist investors in comprehending accounting information systems

and in building accounting information systems by demonstrating the steps involved.

• To Students and Researchers, this will act as a guide to Accounting Information System
as well as how they can improve on applied information already.

F. Conceptual Framework
Definition of Terms
 CHAPTER II

RELATED LITERATURE AND STUDIES

This chapter provides the extensive writings that enclose literatures and

studies, which were established to be relevant to the present studies. This section

also provides the construction of comprehensive materials and resources from

different books, webpage, published and unpublished works, electronic books, and

journals. This is to substantiate that the stuffing have enough basis that would

support the development and validity of the present undertaking. It will also present

the synthesis of the art and gap-bridged by the study, to fully understand the

research to be done and lastly the theoretical framework for better comprehension

of the study.

Related Literature
Related Studies

Synthesis of the Art

Theoretical Framework

CHAPTER 3

METHODOLOGY

The methodology of the research in this chapter discusses the very aspects of

research method and procedures use in conducting the whole present study.

Research Design
Research Instruments

Research Sample

Data Gathering

Ethical Issue

REFERENCES