Accounting Information System 5

American Journal of Scientific enquiry ISSN 1450-223X out 4 (2009), pp36-44 EuroJournals Publishing, Inc. 2009 http//www. eurojournals. com/ajsr. htm business relationship nurture arrangements (AIS) and friendship Man maturatement A eccentric Study Zulkarnain Muhamad Sori segment of business relationship and Finance, Faculty of Economics and concern Universiti Putra Malaysia summary This study seeks to examine the use of report randomness agreements (AIS) by ZBMS Sdn. Bhd. , and its contribution to the cognition heed and strategic role of the organisation. ZBMS is a confederation that registered in Kuala Lumpur and operate in reflexion industry.The conjunction utilise automatize AIS kn give birth as Contract Plus monetary & pick up Accounting package commercially real by a private fraternity (ZYXW). Wide phase of people that involve in the fellowships operation deep d throw and outside the organisation uses score nurture generated by this establishment for stopping pointmaking. Based on fore gip offerd by operational train managers, the Contract Plus softwargon produces periodical projects income statements, balance sheets and statement of changes in fiscal position for the strategic and tactical managers to plan, construe and make decision on the resources allocation.The role-play by AIS enhanced the organisations accounting pieces, and add selective tuition value. The automatize AIS speed up the forge to generate monetary statements and overcome forgiving weaknesses in data processing. The governing body enhances commission of resources and the process of monitoring, control and prognostic of ZBMS business for better prox. With the orgasm of AIS, the harvest-tide of tacit and obvious knowledge could be seen from the intensive training of forcefulness at the early demonstrate of ashes performance to the development and use of companys own manual in training of new staff and assisting the job of animat ed staff.Given the service of AIS to ZBMS, this root recommended that the source of data should be amply automated, and the quick system should be upgraded through computing deviceise the pre-tendering and post-tendering of projects to enable AIS integration. Keywords Accounting tuition Systems, Knowledge Management, Accounting Functions, randomness Value, Financial Statements 1. Introduction Accounting culture System (AIS) is vital to all organisations (Borthick and Clark, 1990 Curtis, 1995 Rahman et al. , 1988 Wilkinson, 1993 Wilkinson et al. 2000) and perhaps, every organisations either profit or non profit-oriented need to maintain the AISs (Wilkinson, 2000 3-4). To better understand the term Accounting cultivation System, the leash words constitute AIS would be elaborate separately. Firstly, literary carrys documented that accounting could be identified into three comp mavennts, get wordly randomness system, language of business and source of financial information (Wilkinson, 1993 6-7). stakely, information is a valuable data processing that provides a basis for making decisions, victorious action and fulfilling legal obligation.Finally, system is an integrated entity, Accounting teaching Systems (AIS) and Knowledge Management A field of study Study 37 where the frame progress to is rivet on a set of objectives. The combination of the three words Accounting Information System indicate an integrated frame determine within an entity (such as a business firm) that employs physical resources (i. e. , materials, supplies, personnel, equipment, funds) to transform economic data into financial information for (1) conducting the firms operations and activities, and (2) providing information concerning the entity to a cast of interested users.Indeed, the combination or fundamental interaction between compassionate, technology and techniques would abide an organisation to administer its knowledge effectively (Bhatt, 2001 Thomas and Kleiner, 19 95). Currently, the world and adult male life has been transformed from information age to a knowledge age (Syed-Ikhsan and Rowland, 2004 238 Thomas and Kleiner, 1995 22), and knowledge has been recognised as the most valuable asset. In fact, knowledge is not impersonal like specie and does not engross in a book, a data bank or a parcel package program (Drucker, 1993).Drucker believed that knowledge is always embodied in a person, taught and learned by a person, employ or misused by a person. As the world moving into knowledge era, this radical de exposit examine how ZBMS Sdn. Bhd. manages its knowledge in arrangement to remain competitive amongst the whirl industry. Probst, Raub & Romhardt (1999, p. 1) stressed that companies must learn to manage their intellectual assets (i. e. knowledge) in order to survive and compete in the knowledge society. Indeed, knowledge focus is concerned with the exploitation and development of the knowledge assets (Davenport et al. , 1998).T his makeup seeks to examine the Accounting Information Systems (AIS) used by a Malaysian company named ZBMS Sdn. Bhd. The paper forget highlight the users of the system and the way information adds value to the organisation. Also, the paper get out investigate the way knowledge is managed through the process of creating, storing, disseminating and applying and how information system plays an important role throughout the process and the AIS contribution in the organisations strategic role. The remainder of the paper is organised as follows. The following section describes the background of ZBMS and the use of accounting information systems.The ternary section provides research findings on accounting information systems employed by ZBMS. The fourth section offer suggestions for future research. The final section concludes the paper and outlines the limitations of the study. 2. The Use of Accounting Information Systems in ZBMS ZBMS is a private especial(a) company registered in K uala Lumpur, Malaysia that operate in twist industry, where the main activities ranging from construction of infrastructure, building, power, waste water to property development as well as engine room, procurement, construction and commissioning (EPCC) in the oil & gas sector.The company used automated AIS known as Contract Plus Financial & swan Accounting package in their Finance surgical incision, which was commercially developed by a private company (ZYXW). Contract Plus is a fully integrated business solution designed specialally for companies in the engineering and construction industry. The software allow generate financial data to be analysed by the accountants and subsequently used by top take of focus for strategic decision making, thus, these managers could identify future opportunities and limitations face by the company and industry (McCarthy, Minichiello and Curran, 1987 243-244). . Findings As mentioned earlier in section 2, ZBMS is a company that operate in con struction industry. The industry was identified as one of the most unmanageable to understand due to its complexity mixture of people, plant, materials, locations, technology, knowledge of the law as well as the design and valuation of work done, which are much subjectivity (Capon, 1990 1). However, these challenges are under control with the advent of technology such as software development that allows systematic data 38 Zulkarnain Muhamad Sori processing.Therefore, it is important to understand the information flow in ZBMS in order to appreciate the usage of information within the organisation as shown in visualise 1-1 below. 3. 1. Users of AIS As shown in chassis 1-1, the finance personnel that reside at site project business leader (or called flip controls) and direct office such as the Financial Accountants, Management Accountants and Finance carriage are the internal users of the system. Also, the management team that consists of Finance General motorbus, read/write toss Operating Officer, Managing Director and Board of Directors are among the internal users of the system.On the other hand, the impertinent users consist of government agency (i. e. Inland Revenue), outer auditors and creditors. Indeed, wide variety of people within and outside the organisation uses accounting information for decision-making (Rahman and Halladay, 1988, Renau and Grabski, 1987). framing 1. 1 Information Flow of ZBMS ZBMS HEAD OFFICE Management squad Inland Revenue ZBMS HEAD OFFICE External Auditors Finance Department Bankers Suppliers Site Office use Team SubContractors Client 3. 2.Function of AIS The main function of AIS is to assign quantitative value of the past, present and future economics events. At ZBMS, AIS through its computerised accounting system (i. e. ZYXW-Contract Plus) produces the financial statements namely income statements, balance sheets and property flow statement. The system leave behind process the data and transform them into account ing information during input, processing and output stages that entrust be used by a wide variety of users such as internal and external users (see for example Wilkinson, 2000 10-11).Wilkinson noted that an effective AIS performs several key functions throughout these three stages such as data collection, data maintenance, data Accounting Information Systems (AIS) and Knowledge Management A Case Study 39 management data control (including security) and information generation. Figure 1-2 summarised the transformation process of AIS. Figure 1. 2 Data Processing in Finance Department at ZBMS Input Progress Billing Certificate, Subcontractors Progress Certificate, Suppliers Invoices Processor ZYXW Accounting System Output Financial StatementHuman Element Finance Personnel 3. 3. Usage of Information Within AIS The construction projects undertaken by the company are divided check to the type of construction activities that comprised of five divisions, namely infrastructure, building , power, wastewater and oil and gas, where soulfulnessly project is treated as a separate company. The number of projects undertaken by each division depends on the contracts being awarded to the company. As indicated by Figure 1-2, the sources of data originated from external parties such as client, subcontractors and suppliers.The Project Accountants will work closely with the Quantity Surveyors to come out with the appropriate information as illustrated below Client The clients Quantity Surveyors (QSs) will try work in progress (WIP) and come out with parting of WIP to be agreed by both parties. Once agreed, Progress Billing Certificates (PBC) will be issued by Clients QSs, which a copy of it will be sent to head office for data processing. Subcontractors The ZBMSs QSs will evaluate subcontractors WIP at site and come out with percentage of WIP to be agreed by both parties.Once agreed, Subcontractor Progress Certificate (SPC) will be issued by ZBMSs QSs and verified by ZBMS s Project Manager, which a copy of it will be sent to head office for data processing. Suppliers QSs and Project Accountants will ensure that the materials and machineries are delivered in trusty condition at construction site before delivery orders are accepted. The delivery orders will be attached to suppliers notice and sent to Head Office for processing. 40 Figure 1. 3 Simplifies the AIS within ZBMS Zulkarnain Muhamad Sori CLIENTSUBCONTRACTORS SUPPLIERS Site Valuation by Client Site Valuation by ZBMS Materials & machineries delivered Certified by Client Certified by ZBMS Materials & machineries delivered PBC SPC Invoices Verified & KeyPunched by Project Accountants Projects Accounts Receivables HQ Database (ZYXW) Head Office Maintenance Projects Accounts Payable Projects wintry Assets Projects Cash Book Project Ledger Projects running Balance Projects Financial Statement Consolidated Consolidated General Ledger Consolidated Trial Balance Consolidated Financial StatementsThe se documents will be verified and input into the system by Project Accountants. The projects data will be stored at Projects Account Receivables, Account Payables, Fixed Assets accordingly. Projects cashbook will be updated automatically aft(prenominal) the data being entered to the projects Account Receivables and Account Payables. Any expenses incurred at head office will be stored at HQ Maintenance verify file by Financial Accountant. The Contract Plus Accounting System software will process the data and produce financial statements of individual companys projects onAccounting Information Systems (AIS) and Knowledge Management A Case Study 41 monthly basis, which subsequently consolidated at concourse level. The process flow is shown in Figure 13 above. The automated AIS play an important role in the ZBMSs operational level. As indicated by Rahman and Halladay (1988 20), most modern organisations operational control of financial resources depends largely on automated support. This is due to the financial statements are generated by the Contract Plus.As shown in Figure 1-4, projects financial statements are generated by the Project Accountants, while the Financial Accountant generates the consolidated financial statements. The Management Accountant uses the consolidated financial statements to prepare companys Performance name such as cash-flow forecasts and ratio analysis. Once the Finance Manager (operational level) approve the report, it will then be submitted to the Finance General Manager and head Operating Officer (tactical level) to assist them for planning, control and decision making.The Performance trace will provide the information regarding work in progress germane(predicate) information. Therefore, AIS plays very important role at operational and tactical level as the activities at these level depend heavily on the information generated by the AIS. Figure 1. 4 Type of Information in ZBMS strategic Board of Director, Managing Director Tac tical Chief Operating Officer, General Manager (Finance) Finance Manager, Management Accountant, Financial Accountant, Project Accountant Operational work Processing ZYXW Accounting System . 4. Value Added of AIS The role played by accounting functions has been enhanced with the development of AIS, which in turn commit to the barters value added to organisation. In fact automated AIS employed by ZBMS expedite the process to generate financial statement and reduce the humans errors compared to non-automated AIS, which add the active value of accountants. AIS also provide information on both actual and budget data of the organisation that helps companys management to plan and control business operation.Good management of resources and better control of cost, budgeting and forecasting enhance the well being of ZBMS to continually generated profits. The AIS also played a crucial role that contributes to ZBMSs value added by providing internally generated inputs from financial state ments. Rahman and Halladay (1988 19) believed that viable strategic plan must have inputs establish on history of organisation, the current assets and capabilities of the organisation, and the trends in operations of the organisation. 42 3. 5. usance of Knowledge Zulkarnain Muhamad SoriAt ZBMS, both tacit and explicit knowledge are used as shown by the extensive used of accounting information system to assist business decision-making. The ZBMS begins its computerised accounting system in 1997. During the transformation process from manual to computerised accounting system, all finance personnel were sent for all-embracing computer training. Table 1 Relationship of AIS at ZBMS and Knowledge Management System Knowledge Management System universe of knowledge Creation of Knowledge Storing of Knowledge Disseminating of Knowledge Knowledge Conversion evident to mum Explicit to Tacit Tacit to Explicit Tacit to ExplicitDevelopment of Automated AIS prep by hands-on experience ZYXW imp lemented, staffs learned from vendors manual Staffs gaining experience Problems and solution being exhibited on paper advantage on system Internal manual that suits the ZBMS needs being produced widely used in the department Assists learning process of new staffs Explicit to Tacit System constantly use in Finance Department to generate monthly financial statements Applying of Knowledge Explicit to Explicit As shown in Table 1, the staffs were given hands on experience on the ZYXW System.During the early stage of system implementation, finance personnel were given flexibleness to explore the system due to limited experience on the software at that time, and most of the staffs depend largely on the manual provided by the vendor for trouble-shooting. At initial stage, two-way communications with the vendor were developed to solve problems arised. As the time going on, the personnel were encouraged to record the problems aroused. Problems that have been solved were recorded for futur e reference.Currently, the ZBMS Finance Department has its own ZYXW manual that suits with the department needs. The manual provides valuable information to new employees as well as to the existing personnel at Finance Department. Indeed, AIS provide the systematic recording, processing and generating of accounting information, and in the absence of AIS, information would be scattered, random and hard to access, which would become a barrier to the growth of knowledge. 3. 6. strategic Role and AIS To analyse the AIS strategy in ZBMS, McFarlan Strategic Grid will be utilised. The McFarlans strategic grid would adjudicate ZBMS to the appropriate course with respect to its information system strategy (Curtis, 1995 61). Automated AIS is fundamental part of the strategic plan of ZBMS in 1997. It has been improved over the years of implementation and generates accurate and timely accounting information that contributes to a good decision-making. Realising the reach brought by the AIS, t he source of data must be fully automated. The existing system should be upgraded through computerise the pre-tendering and post-tendering of projects in the primary stages of the construction activities.When the system is upgraded, the ZYXW Contract Plus will integrate the two modules of pre- and post-tendering with the soon automated Financial and Project Accounting. Therefore, the most suitable position to locate AIS at ZBMS on the McFarlan Grid is on Factory Grid as shown in Figure 1-5 below. Accounting Information Systems (AIS) and Knowledge Management A Case Study Figure 1. 5 ZBMS Location on McFarlans Strategic Grid 43 starting time Current Dependence on AIS Support Turnaround High Factory AIS at ZBMS Strategic Low Future Importance of AIS High 4. Direction for Future queryHaving mentioned the above opportunities and challenges to the AIS, future research should investigate the AIS contribution on the organisations growth of knowledge. Though AIS would organise and structu re the data input and knowledge, lack of brain on the potential effect of human behaviour on the system such as human error, manipulation and work-style. In fact, Ponemon and Nagoda (1990) noted, the most difficult problems often are caused, or are exacerbated, by those individuals who have infatuated expectations of the new system being implemented (p. 1).The study would be prolific with the use of questionnaire and interview survey. Perhaps, the survey should concentrate on a seek of senior managers of the top hundred companies listed on the Bursa Malaysia (Malaysian Stock Exchange), banks and regulatory bodies. These groups could contribute significantly due to their role as a decision noble in their respective organisations. Secondly, future research should also investigate the mishap to expand the use of AIS to the other areas that still did not use the system such as non-profit organisation and society.Indeed, the current level of usage shows that the benefit outweighs the investment cost. The successful implementation of AIS could save shareholders money and time. Finally, future research should explore issues on the information value generated by AIS to shareholders and stakeholders in making investment decisions. Case study approach on top companies would be appropriate methodology because the understanding on specific AIS model would be more valuable rather than using questionnaire and interview approach that assumes AIS across sampled organisation is identical. 5. ConclusionThis paper examines the use of Accounting Information Systems (AIS) by ZBMS Sdn. Bhd. The wide varieties of people that involve in the companys operation get the benefits from the implementation of AIS and the use of Contract Plus software developed by ZYXW. The system assists the operational managers to come out with monthly reports for the top managerial level (i. e. tactical and strategic) plan, control and decide resources allocation. In addition, the paper showed that the AIS add value to information processed within the company. The automated AIS could speed up information process and overcome traditional human weaknesses.As a result, the system supports the resource management and help ZBMS pursue its extrusion of continuing business profit. The use of AIS indicate the growth of tacit and explicit knowledge, where personnel were trained intensively and experience and trouble shooting were 44 Zulkarnain Muhamad Sori recorded for future reference and training. Indeed, the successful implementation of an accounting information system can be described as a serial of complex, interconnected activities necessitating participants to have technical and managerial skills to sort out potential problems (Ponemon and Nagoda, 1990 1).Note To keep the identity of the respondent and its software developer anonymous, an imaginary name was used in this study i. e. ZBMS Sdn. Bhd. and ZYXW respectively. References 1 2 Bhatt, G. D. (2001). 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