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Organizations regardless of their types and functions use accounting information for more than one purpose. The account information in an organization, for example, is used for decision making but it can also be used according to the needs and requirements of an organization. Primarily, the accounting information needed by an organization was prepared manually by the accountant which has a number of problems and disadvantages. Fortunately, the developments in technology have bring about to introducing “computerized accounting systems” which helped accountants to overcome their accounting difficulties and facilitate their work. These systems have become to be used in business worldwide and they have brought up with them competitive gains and benefits. Thus, organizations should improve and develop their systems in such ways that they can offer “quality information” and use it for ” better decision making”.
Accounting information system (AIS) is a tool which was established in the field of Information and Technology systems. It is essential for business elements and it is in charge of creating reliable financial data required for decision making. This system (AIS) has been designed in different ways to match with the needs and objectives of organizations and has taken into consideration those aspects that ” influence the way in which information is gathered and reported “. The system has also taken into accounts the potential users as well as the kind of decisions the user seeks and needs. However, the type of the design of the systems also depends on the “size of the firm, the volume of transaction data, nature of operations, organizational structure and business form” .
It has been noticed through several meetings and interviews with Budget accountants at the university colleges that many of them still use paper and manual devices in keeping their records. These tools and devices are too traditional to keep up with the recent electronic ways of managing financial budget activities used in modern organizations. It has been also observed these tools have several negative aspects and met different problems such as:
First, in term of time, it is time consuming as it takes a very long time to transfer the information to the related units.
Second, in terms of value added activities, paper records are non-value added activities because they are difficult to be retrieved, altered, and re-filed.
Accordingly, we believe that this traditional system is not efficient enough, to satisfy the beneficiaries’ needs and requirements and the provided information lacks quality.
Based on the above mentioned assumption, the main purpose of the current thesis is to design an AIS that can help improve the cooperation processes among several units as regard to sharing information, skills and resources that are related to the preparation of budget information. Furthermore, this system aims at providing a complementary relationship between the management of financial units.
1.2 Literature Review
The overall objective of a literature review is to provide historical background to key concepts and to provide a strong argument that guides the research problem. This section aims at creating a good base that supports the current study by reviewing a number of related previous studies that have dealt with financial budget. The related work and studies will also help us to assess the findings of earlier researchers and to start from where they ended up so that we can complement each other’s studies and research. Moreover, literature review provide us with insight to evaluate different methodologies adopted in this field and to identify appropriate methods for investigating the research questions. It is also an attempt to determine the significance of the current thesis and how it can be distinguished from other previously conducted studies. Finally , review of previous studies will help identify a place for a new contribution that could be made by this study. The following is a review of studies in the financial budget field.
- Watt in 2004 , introduced a study entitled “Design and Implementation of Web-Based Financial Information System” in which he designed and implemented a web-based financial information system. The researcher stated there was no simple way to make the data in a Microsoft Access database accessible to the web. Microsoft Access’s .mdb file format is proprietary, therefore only licensed software can interact with it. The aim of the thesis is to reimplement the system to the web in order to provide beneficiaries across the country (and ultimately around the world) who can have access to the project’s financial information. The researcher believed that Web Based System can be accessible to users when compared to traditional software applications. They also concluded that access to a Web-Based System can be obtained from any place as far as the user has access to a web browser and an internet connection.
- In 2005 Diamond and Khemani , wrote a paper entitled ” Introducing Financial Management Information Systems in Developing Countries”. The researchers stated that in most developing countries (DCs), budget execution and accounting processes are either manual or supported by very old and inadequately maintained software applications. This has had deleterious effects on the functioning of their public expenditure management systems. The main objective of the paper, was to investigates the reason for almost universal failure to implement and sustain financial management information systems (FMIS)s in DCs. It starts with a review in implementing these projects, and then analyzes problems in its application in the DC context to identify key factors to explain why FMIS projects have been so problematic. The results of the study showed that, the decision to introduce an FMIS needs to be accompanied by strong commitment, sufficient manpower and financial resources, widespread internal support, and an agenda for effective change management. As well as the implementation strategy both in terms of functionality and number of entities needs to be phased.
- Chalu and Kessy in 2011 , carried out a study on the accounting information available in local government authorities in Tanzania. They found that there were challenging problems of transparency and accountability in terms of financial matters based on the fact that many people had never received information on the amount of revenue and expenditure. There has been a also lack of communication on various decisions making levels, no cost analysis has been done and financial information was of poor quality. The main objective of the paper, however, was to improve the financial management, accounting, financial reporting, auditing and budgeting by designing and introducing effective accounting information system (AIS). It was found that accountability, participation, prediction, transparency and decision-making increased as a result of introducing and using their AIS .
- In 2011 Anohene , conducted a study in which she referred the lack of effective financial control system to poor budget formulation and implementation. The study concluded that the budget deficits occur due to the following reasons:
- poor database for planning and budgeting,
- poor budgetary control that leads to “misuse of funds culminating in over expenditures”.
- lack of ownership and responsibility when it comes to budgetary control.
The main objectives of the study were to find ways by which financial management could enhance development. However, the specific objectives of the study are to:
- Identify some of the limitations faced in budget preparation and implementation;
- Find out if poor financial performance can legitimately be traced to poor budget formulation and implementation.
The case study included interviews and questionnaires to seek data for the study. The research data clearly demonstrated that “poor budget formulation and implementation and low revenue generation base make it difficult for the responsibility as partners to the central government in national development”.
- Bo and Yan in 2011 , conducted a study in which they designed and implemented a computerized budget management system based on ExtJS and ASP.NET”. The researchers thought that there were some common problems in the current budget managements as explained below.
- A lack of budget management awareness; the process of “Editorial budget, budget implementation, budget adjustment, budget analysis” could not be firmly executed.
- The foundation work of the budget is not prepared, and the specific assessment indicator is not clear.
- Monitoring and tracking of the budget implementation are not in place.
Finally, the study provided solutions to those problems.
- In 2012 Abdulaziz et.al , wrote a paper entitled “Analysis of Budget Allocation for Different Categories of Faculties in Higher Education Institutions”. This study dealt with the budget allocation in one of the public universities in Malaysia. They thought that managing a budget for best efficiency and use at different levels of the university was always a challenging task especially in accounting and reporting. The aim of this study was “to analyze and determine the allocation proportions among these groups and to identify the faculties that have the greatest cumulative effect on the university budget allocation and to achieve effective accounting and reporting of the budget“. The results have given deep insights and understanding for the management of budget allocation, and minimizing the human accounting errors.
- In 2012 Kelvindra et.al , performed a study in which they dealt with the analysis and design of the accounting information system in medicine manufacture in Indonesia. They found that there were problems of costing process, financial accounting and decision making. The paper aimed at achieving an effective accounting information system (AIS). The analysis and design of the proposed accounting information system were done according to the Object-Oriented Analysis and design (OOAD), the design was drawn using the Unified Modeling Language (UML). The paper came up with the conclusion that the implementation of an accounting information system can help the company perform its daily activities, process costing and financial decision making.
- Vaznonienė and Stončiuvienė in 2012 , proposed a paper dealt with the formation of company budgeting system with its importance, problems and solutions in Lithuanian organizations. The researchers argued that annual budgets in organizations have suffered from flaw and limitation in management and control, inaccurate data processing and inefficient planning of the costs of the organization. Accordingly, the aim of this research focused on the importance of budgeting to an organization. The paper also dealt with the analysis of the common budgeting processes and problems and it finally suggested solutions. The study mad use of the following research methods: scientific literature review analysis and synthesis, induction and deduction, comparison, and graphic imaging in order to achieve its objectives. The authors perceived that there was a possiblity to continue research that was subsequent to analysis of the budgeting system formation practice in Lithuanian organizations. They also asserted that a case study of a budgeting system with logical schema can be used to produce and implement a budgeting system formation model.
- In 2014 Zhijun , analyzed and designed a dynamic management system for the budgets of university scientific research projects. The researcher found that the management of scientific research project funds suffer from a number of problems, specifically in budget management. Series of functions were realized in this study including source management, budget management, expenditure management and inquiry statistics. The study made use Visual Studio 2005 was used as a development tool, whereas the SQL Server2005 was used as a background data management system. The designer asserted that this design could help the financial management department and the scientific research management departments to efficiently carry out dynamic management and supervision for scientific research project funds and it also successfully guided the project director to make the best use of funds.
- Pardamean in 2014 , in a study entitled “Information System Model of A Work-Plan Budget”, confirmed that the use of manual budgeting process in many government agencies with various documents has lead to “a long processing time, numerous errors, and difficulty in data searching”. Moreover, the absence of data integration hindered “the need to meet requirements, standards, and budget-planning deadlines”. The research was carried out through using field observations, interviews, and models based on literature review. The proposed model was designed by making use of ” the unified model language (UML), class diagram, usecase diagram, sequence diagram, and activity diagram”. The study came up with an information system model of Work-Plan budget that could effectively support the management performance of a government agency in performance-based budgeting. The Information System Model of a Work-Plan Budget has recommended a solution to such occurred problems as: non-current time of receipt of the budget information, discrepancies between proposed budget and predetermined time frame, difficulties in data access between the units of work, data errors in meeting budget targets and conditions, length of time the process manually, and inefficiency in the processes.
- In 2014 Ferrer and Carillo , conducted a study in which they designed a web-based system for economic and financial management for a university department. The aim of the proposed system is to raise management transparency, control income, ease the expenditure and make users more aware of the economic effect of their decisions. They argued that the most concrete outcome of the system is that it is able to create a year-on-year budget surplus. They have shown that their system actually contributed to facilitate the economic and financial management activities done by the administrative staff. Thus this system prompts the more effective utilization of public resources, information and communications technology are important aspects of this task, and the web application described contributes to achieving the goals”.
- Bosire and Mbonimpa in 2014 , carried out a study investigating the different computerized financial management systems used in Rwanda Supreme Court. They tried to find out about the variety of functions of Rwanda Supreme Court used by computerized financial management system. The study offered very important details to different users of the system and made them aware of the importance of the computerized system to functions of the financial management of the Supreme Court of Rwanda. It is worth mentioning that this study has made use of the quantitative research technique as it used a questionnaire to obtain the key data. In addition to that the study made use of textbooks, Supreme Court Financial reports, journals and other documents related to the contribution of computerized financial management systems. It also referred to different publications, government webs during the period of study . The Statistical Package for Social Sciences (SPSS) was used for data analysis and for statistical purposes to produce results and interpret them. It was found that the Computerized Financial management Systems have significantly assisted the Supreme Court in performing its functions and the court has fully benefited from the contribution of the system. The researcher considered that as a contribution to financial management at the supreme court of Rwanda.
- In 2015 Song , proposed a system design for colleges and universities entitled a “College Financial Management System Research and Design”. He aimed at simplifying the complexity of financial management tasks of colleges and universities and at improving the financial management efficiency and competence of universities under study. The user management module, account management module, the student fee module, payroll management module and employee information management module were included in this study. Although the study included the five modules in order to surrender a better interpretation to the content of financial management information system, the designer maintained that the system design still had many deficiencies, and it needed more investigation and further improvements.
- Almurtada and Hamdan in 2016 , wrote a paper on the Role of Government Financial Management Information System in Raising the Effectiveness of the Government Budgeting. The study aimed at measuring the role of the (GFMIS) in raising the efficiency and success of the government budgets preparation. It included accounting reports, operational of the budget, financial reports and analytical reports. The researcher argued that most previous studies indicated that applying (GFMIS) in the government budgets was effective by 73% in order to achieve the quality of financial reports. The results of the study showed that there was a significant role for (GFMIS) in raising the effectiveness of the government budget.
The related works reviewed above were all addressing topics dealing with financial budget management and accounting systems. The researcher also has noted that those studies focused mostly on descriptive and analytical approaches without taking the analysis of the applied environment or the assessment of the usability of the system into accounts. The current study is distinguished from those studies mentioned above as it is characterized by the following aspects:
- The proposed system can be applied in universities of one unit and multi units budget accounting.
- Moreover, the current proposed system is the first system that includes automation of all auditing processes.
- MySQL transactions have been used in this system to ensure the integrity of data in databases due to having insertion to many tables at the same time. In case a failure occurs during the insertion, a command will be issued to return every table to its previous state
- This system used responsive web design which detects the visitor’s screen size and orientation and changes the web page layout accordingly
- The proposed system has been designed according to certain specifications by the potential users and their desires and preferences. Thus the system can be described as a customizable system.
- The current study is a part of a comprehensive strategic project that requires coordination and compatibility with all information systems working within the campus.
- The case study of this work includes four universities, one of them is private and the other three are governmental, as a sample to represent the academic community under study properly.
- This work adopts the well-known SWOT matrix, as a tool to analyze the internal and external factors in the environment under study in order to select suitable strategies that support the design of the proposed system. On the other hand, the researcher uses (SUS) as a tool to evaluate the usability of the proposed system after implementation.
1.3 Thesis Identification
1.3.1 Problem Statement
Organizations, in order to be able to keep up with the recent developments in the advanced environments, need to practice business processes and to reengineer their practices and operations by the implementation of the enterprise resource planning (ERP) systems. These systems have to meet by necessity the ROI benchmarks. Due to the above statement, it is believed that most universities face major challenges to keep up with rapid advances and to be able to work with large amounts of operational data. In addition to that, any education reform should start with effective performance of management and efficient use of data to improve instruction [17, 18].
It is worth emphasizing that a computerized financial budget has become a necessity and one of the important factors tht contribute to the success of modern organizations. Such systems should help the management units in the universities in order to facilitate the administrative tasks and activities and to provide a real-time access to the financial data. Certainly, the lack of such a system represents a major challenge to the progress of the university. The universities under study use a manual system to manage their financial records which requires a lot of paper work ; it is extremely time-consuming, costly, and it needs to employ more manpower.
Based on the foregoing assumptions and according to the results obtained from several interviews conducted by the researcher, all the universities under study manage activities and accounting operations manually. As we have mentioned before and to reiterate, we believe that the lack of a computerized system certainly represents a major challenge to the advancement of the university in order to be able to keep pace with sophisticated environments.
1.3.2 Objectives of the Thesis
This main objective of this thesis is to develop a computerized financial budget information system that consequently will help the universities under study to manage their own budget information efficiently and effectively.
To achieve this goal successfully through strategic planning concepts, the thesis has taken into consideration the following sub-objectives as well:
- Applying SWOT technique in order to:
First: know the challenges being faced by the application of the manual system currently used by the universities under study and to gather data needed as requirements to design the proposed system.
Second: analyze the environment under study to explore the strengths, weaknesses, opportunities and threats surrounding it.
- Designing and implementing the proposed system under study in this thesis.
- Assessing and evaluating the possibility of using the proposed system after implementing it from the standpoint of the potential users by using the system usability scale(SUS).
The following questions are derived from the above sub-objectives:
- How will the environment under study be selected?
- How does SWOT analysis support the design of the proposed system?
- How is the environment under study able to maintain and retrieve the data?
- How will IT team play the role of partnership in the implementation of the proposed system?
- Which data will be used to test and evaluate the proposed system?
- How much knowledge have the university staff had about the advantages of using the proposed current system?
The above questions will be answered within the text of the chapters of the thesis.
1.3.3 Significance of the Study
The proposed financial budget management system included in this study is of great importance to the universities understudy as it academically addresses an issue which has become so crucial in sophisticated organizations especially in university environments aiming at E – government. The system, in practice will convert manual connection into electronic one between the university accounting units. Once the system is put in application, it will help increase the efficiency and competency of the senior management, academic staff and Faculties’ management as they will be able to access budget records and handle its activities and operation throughout the day. Consequently it will improve the quality of services provided within the faculties.
- Scope of the Study
The study covers the period from 2015 to 2016 fiscal (financial) years. It should be noted that the rationale behind selecting the applied environment lies in the following considerations:
- It provides optimal representation of the community under study.
- It also provides the study factors that help lead to the successful implementation of the proposed system.
Accordingly, and in order to cover all the required information, the researcher has chosen two governmental universities namely University of Duhok, and Zakho University; one private university i.e. Nawroz University as well as Zakho Technical Institute which is also governmental and affiliated to Duhok Polytechnic University. For the purpose of evaluation the proposed system has been tested at Zakho University, University of Duhok and at Zakho Technical Institute for the purpose of evaluation. The researcher has conducted the actual application of the proposed system in Zakho University.
1.4 Thesis Methodology
In order to answer the targeted questions of the study, and to achieve the objectives of the thesis, the researcher has followed a methodology that includes the following procedures:
1.4.1 Data Collection
Data collection and analysis are considered the first step for developing the system. Thus the researcher has started her study by collecting data and requirements from multiple environments in order to be able to design the proposed financial budget system. Accordingly, the researcher has used more than one means or tool at one time to perform this process successfully:
- Qualitative method: This research method is represented by using SWOT to obtain the required details about the environment. The researcher has used both a questionnaire and an interview which lead to access information directly and accurately from beneficiaries. The aim of the interviews was to learn about the employees (respondents) points of views on what is considered to be the most critical successful factors in information system projects, and to gather ideas from their experiences and lessons-learned that can be from them.
- 2.Quantitative method: The researcher used the System Usability Scale (SUS) as a quantitative method to evaluate the implementation of the proposed system.
Moreover, observations inside the university campus have also been made which have had an impact on the conclusions and discussion of results, through which we directly got some of the required data.
The findingsof the interviews are compared to theories presented in the literature review. Building on the foregoing tools and on a careful review of studies related to the topic of the current thesis, undoubtedly, those mentioned procedures have offered great benefits to the researcher as follows:
- They enabled the researcher to understand the concepts and the architecture of the budget System within the framework of IT concepts and by adopting relational databases both theoretically and practically.
- The Review of related works have provided great support in the building the framework of the proposed system in detail.
- They enabled the researcher to learn more and to understand the budget system concepts within the context of information technology.
- They help to direct the researcher towards the necessity of applied SWOT Analysis.
- They enabled the researcher to acquire skills in a way that she can create a connection among accounting units within the universities under consideration.
- They have offered the researcher a good opportunity to search through the topic literature and other sources that helped her taking out the information needed for implementing the proposed system.
1.4.2 Environmental Analysis
It is axiomatic among scholars and researchers that the environment plays a very crucial role in educational establishments like universities and it also has a very important impact on the functions of those institutions. The current study has carefully taken the trends and environmental factors into utmost consideration. It is critical that such information systems must be developed to make sure that universities keep pace with progress in the surrounding environment as well as to share information and built a strategic planning for satisfying the needs of the community .
This, in turn, requires a careful analysis not only of the internal environment of the educational institutions understudy but of the external environment as well. As earlier mentioned, there are various analysis tools among which the SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is considered the most common one.
To reiterate, the current thesis has used SWOT as a tool of analysis to assess the internal and external factors of the project problem and to stand on the strengths and weaknesses of the surrounding environment, according to the following steps:
1. A questionnaire was developed according to SWOT factors and it was related to the design of an integrated system for managing financial budget information system with the possibility of applying it successfully to the beneficiary universities. The items of the questionnaire are shown in Appendix A.
2. The questionnaire was revised by a group of experts in the field of strategic planning and due adjustments and modifications have been taken into account. A list of the experts’ names who assessed the questionnaire items and contents are shown in Appendix A.
3. The researcher conducted many interviews during the period of the observation (December 2014- January 2015) at the universities under study to explore strengths, weaknesses, opportunities and threats related to the campus information technology services.
4. The researcher met with the president and members of the (IT) Units at universities understudy. The meetings aimed to inform the key decision-makers about the strategic planning process and to encourage them to conduct a SWOT analysis with the concerned authorities as partnerships within the process.
It should be noted here that the planning and the analysis processes require targets that have clear and smart objectives and to ensure that specific objectives are achievable. This, in turn,requires identifying the objectives of the SWOT analysis clearly, whereas the main purpose of the analysis is to support the problem of the current thesis.
1.5. Structure of the Thesis
The remaining parts of this thesis are organized as follows:
Chapter Two includes the theories of the financial budget management system that can provide the reader with brief details about the concepts. They also provide the reader and the researcher with the concept of information management system depending on a relational database through the concepts of information system and information technology.
Chapter Three offers the conceptual design and the related aspects and assumption of building the proposed financial budget management system. It starts with the results of (SWOT) analysis of the applied environment. In addition to some diagrams, SQL and procedures explaining the architecture of the proposed system are included in order to give a better insight to the reader.
Chapter Four deals with the implementation of the proposed system and the testing results of the system using (SUS) technique. This chapter shows the results of the applied system in detail by figures.
Chapter Five is concerned with the conclusions of the study as well as includes suggestions and recommendations for future work.
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