THE CHALLENGES OF COST BENEFIT ANALYSIS, IN A COMPUTERIZED ACCOUNTING SYSTEM

THE CHALLENGES OF COST BENEFIT ANALYSIS, IN A COMPUTERIZED ACCOUNTING SYSTEM

(A CASE STUDY OF COCA-COLA BOTTLING COMPANY, ENUGU)

ABSTRACT

This research is on the challenges of cost benefit analysis in a computerized Accounting System. The purpose of this study is to enquire into the viability or other wise of computerized accounting Systems, with particularly reference to coca-cola Bottling Company, Enugu. The objective of the study is to ascertain if the introduction computer system may lead to industrial unrests as workers resists change. Also, the method used in this study is chi-square while the findings in the process of this research work is the implementation of computerization of coca-cola bottling Plc Enugu and also the recommendation for the work is that the company should motivate its personnel more on the use of computers.

CHAPTER ONE
INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Computer has been defined as electronic machine that accept data (input) processes it to produce useful result (output). It is also capable of storing information. It uses predefined instruction known as computer programs to execute the task in order to produce output. Computers technology has helped in no small measure in activating the problems encountered using the manual tools and machines. Computerization ranks prominently in the commanding heights of economic activities of the business world. Through computerization, industries have been able to control their cost of production heading to high profit margin, sustainable growth and development, accurate and lasting records.

The manufacturing industry has come a long way from the manual era of machine operation to modern day science and technology. Within this period, a number of major changes took place in the business world with significant positive impact on the business world. Notable among these changes are those changes in manipulation of accounting records, fantastic computer designs etc.

We have various types and categories of computers which perform diverse functions; however, the one of interest and relevance to this research is the digital type of computer.

The history of the digital computer data back to the Abacus which was intended in China more than a thousand years ago and used to add, subtract, multiply and divided . This was followed by the counting invented by John Napier in the 1600’s. Blaise Pascal followed closely with a mechanical machine that could do similar jobs more efficiently. GOH friend Von Liebritz invented a more improved version of Pascal’s machine. Other great mathematicians and investors like Jacuard, Babbage, Grace Hopper etc made greater strides towards, building calculating machines. An American Herman Hoterrith, developed the mechanical members calculator which was used to read punched cards and greatly facilitated the sun of 1890 in that country. Hoterrith founded a company to sell his inventions and today that company has grown to become IBM which is (international Business machines) the largest computer company in the world.

The era of modern computers began sometime in the period preceding the end of the Second World War when the vast calculations required in the production of the first bomb necessitated he buildings of a giant computer which operated on vacuum tubes. This computer was huge and expensive and only affordable by few.

Thus, from this period on wards, with the introduction of new technologies, computer became smaller in size and cheap as well: such that today we have the micro computer which costs a few thousand naira and can do job undreamed of forty years back.

There are three classes of computers now in use viz;

1. The micro – computers

2. The mini- computers

3. The mainframe computers

i. MICRO – COMPUTERS: These computers are designed to handle simple data processing functions; it is the smallest general purpose computer. Micro computers are capable of handling independent task and do not led themselves to integrated network. Some just j contain a keyboard for input entire, where data is keyed in by an operator of programmes. Others can contain sophisticated input/output forms. Micro computers and their speed are designed to be stand alone computer, which means that they operate independently, on they can be part of a network or system. Their memory is smellier than that of mainframe or mini computers and their speed of processing data is slower also.

ii. A mini computer – is a small computer relative to mainframe and maybe be defined as a seated down mainframe, as the processor and peripherals are physically smaller. Although the processor may be physically smaller, it is powerful than the micro computers; several people can make use of the mini computer to do different jobs simultaneously through a linkage channel called the work-stations or terminals. It can be used to in inventory control, customers account records and employees payroll.

It can also be used to prepare final accounts of companies using computerized accounting system.

iii. The mainframe computer is large and powerful. They have higher processing speed and capability than both mini and micro computers. These are used by large organization with immense data processing deeds. Computers can be used in several fields as widely diverse as law, medicine and architecture. However, the principal concern within the scope of this research work is a data processing and analysis for business organization.

In the past thirty year or so, there has been a tremendous advance in technology of automation. The introduction and adaptation of the computer to business has led to revolutionary changes in data processing methods in advanced countries.

These changes are fast spreading to the developing world. In present day Nigeria, there is a noticeable and marked trend towards computerization of computers, often with little or no back-up capability often with little or no hack-up capability as guards’ maintenance and utilization.

Companies are begin attracted to this computerization possibly with the belief that it is sound business to sight coupled with the feeling that it is in vogue for a company to say it is fully computerized.

In answering the question why any organization should consider the transition to computerized accounting system Larry J. Campbel (1979) observes that research by behavioral scientists reveal that he fundamental reasons for transferring to some form of mechanization in information systems are the same as any other tact of an enterprise.

Companies turn to mechanization because.
1. Company growth exceeds the capability to expand the present processes by any other reasonable scheme.

2. Technology changes, force different and more computer tactics that can best me mechanized.

3. Efforts to cut costs force searches for alternative. Added it all these is the requirement of data for decision making at a faster speed to meet up with competition.

1.2 STATEMENTS OF THE PROBLEM

The problem of this study includes:

1. The problem of industrial unrest

2. The problem of obsolesce or unsuitableness for the needs of the company.

3. The problems of companies not realize the full potentials of the computer system they have installed thereby leading to inefficiency.

4. The problem of company’s data processing operation which are amiable to automation may be over looked.

1.3 STATEMENT OF THE OBJECTIVE

1. To ascertain if the introduction of computer system may lead to industrial unrest as workers resists change.

2. To identify the wrong computer systems either in terms of obsolesce or unsuitableness for the need of the company.

3. To determine how companies can realize the full potentials of the computer systems installed thereby leading to efficiency.

4. To examine how companies data processing operation can be amenable to automation so that they cannot be over looked.

1.4 RESEARCH QUESTIONS

The followings are the research questions

Research questions help in obtaining adequate information within the preview of any chosen topic. Answers to questionnaire will help in the discussion of a research question, some of the research questions which will help to achieve the objective of the study Viz:

1. Is the turnover of workers higher now that you use computer system?

2. Is the high cost of procurement and installation yielding good returns?

3. Are your computers very expensive to maintain? Yes/No

4. If yes, what is the maintenance cost of your computers yearly?

5. Is the usage of computers advantageous to your company? Yes/No.

1.5 RESEARCH HYPOTHESIS

These are problems that put together all the concepts construct, and variables and give the researchers a clear view of the problem under study. That is, they are prepositions put forward by a researcher to enable him or her solve the problem(s) formulated and to achieve the objectives of the research exercise.

The following research, hypothesis are used where

HO: Stands for Null hypothesis

Hi: Alternative hypothesis

1. Ho: Cost benefit analysis, computerized accounting system does not helped coca-kola bottling company Plc Enugu.

Hi: Cost benefit analysis, computerized accounting system helped coco-kola bottling company Plc Enugu.

2. Ho: Here is no programme of computer training skills and acquisition.

Hi: There is programme on computer training skills and acquisition.

3. Ho: Computerized accounting system has no impact on the staff of coca-kola bottling company Enugu.

Hi: Computerized accounting system has impact on the staffs of coca-kola bottling company Enugu.

4. Ho: The staffs of coco-kola bottling company does not benefit from the cost of using computerized accounting system.

Hi: The staffs of coca-kola bottling company benefit from computerized accounting system.

1.6 SCOPE OF THE STUDY

The challenges of cost benefit analysis, in a computerized accounting system. The project is restricted to coca-cola bottling company plc 9th mile, Emene, Enugu State.

1.7 SIGNIFICANCE OF THE STUDY

1. The study will be of immense benefit to the company by improving the use of computer system.

2. The implementation of computerization of coca-cola bottling company Enugu has significantly saved cost and has increased profit maximization.

3. The computerization of coca-cola bottling company Enugu has led to reduction in labour costs.

4. The introduction of computer did both undermine workers morale.

1.8 LIMITATIONS OF THE STUDY

During the course of this study, some constraints were encountered by the researcher which limit the scope of and details of the study. The constraints were numerous as they prove formidable and able to determine to some external the ultimate outcome of the study.

1. Time was one of the constraints, the little time I have as a student had to be apportioned between studies, research and other social endeavors since all the these activities are very important to my well-being none had to be forgone.

2. Financing a research of this nature is not easy, money is needed to sought for material, print questionnaires, and post to respondents and to compile the report. Finance being a scare resource was a very big constraint to the smooth conduct of this study.

3. The uncooperative attitude of some people and due to the duty of secrecy they owe to their company staff makes the not be make available some important fact.

1.9 THE COST BENEFIT ANALYSIS

1. The benefit of an organization using a computerized accounting system is important because the organization will be modernized in its cost of using computer systems for its business.

2. An organization will benefit from the cost of using computers systems whereby the organization will no longer have to spend much money on employees to be employed in the cost of using manual system in the organization because there is no computer system to make their work faster.

3. The cost benefit which an organization will benefit from using a computerized accounting system will include the organization benefiting from the account of the organization not having errors like in the case of using manual system. In using a computerized accounting system, an error cannot occur because the computers will be there to detect error.

4. The organization will also benefit from using a computerized accounting system if in the case of centralize organization whereby their staff can at home it they need anything, from the office, they can go to the computer and get the information they need from their organization to ease the stress of them going to the office to get information.

5. In the cost of an organization benefiting from using a computerized accounting system, the work of the organization will also be fast and will not be left behind unlike using a manual system that lead to the organization been slow in their activities.

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