As an unavoidable result of the new technologies like the internet and mobile solutions, new business opportunities and operations emerge. Nowadays, the economy has information and communication technologies, which entails the development of e-accounting. The term "e-accounting" refers to Electronic Accounting, a term used to describe an accounting system that
relies on computer technology for capturing and processing financial data in organizations. It also involves performing regular accounting functions, accounting research and the accounting training and education to provide efficient decision making.
The main objectives of this research project is to evaluate the extent to which small Mauritian accounting firms have adopted e-accounting and to identify the factors affecting the adoption of e-accounting and analyze the impacts of e-accounting in the small Mauritian accounting firms. To achieve the objectives, the descriptive analytical approach reviewing related studies and literature of e-accounting will be used. Questionnaires will be prepared and distributed to a sample of small accounting firms throughout the country in order to provide evidence for the hypotheses. The results will be analyzed statistically. At last, measures to counteract the negative impacts from the adoption of e-accounting will be suggested and also to enhance the potential benefits from the adoption of e-accounting.
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"In the information age, traditional, paper-based accounting systems that showed financial position and results of operations for time periods in the past increasingly seem to be out of sync with current practices. Many economic events are now being captured, measured, recognized, and reported electronically, without any paper documentation; and online, real-time accounting is emerging as the system of choice" Rezaee (2000). There has been a constant growth in the use of information and communication technology in business to support the exchange of data and information within and between organizations. New technologies, like the Internet and mobile solutions, have provided new business opportunities and operations (Gullkvist, 2003:536). The e-business is drastically affecting traditional businesses that cannot continue to work the traditional economic model (Vasarhelyi and Greenstein, 2003:23). The revolution in information and communication technologies has become central to developments in the organizational services (Karen & William, 2000).
According to IFAC (2002:1) e-business is believed to have a significant impact also on accounting systems, through changing business processes and the evidence available to support business transactions, and leading to changes in the accounting records maintained and the accounting procedures followed (Gullkvist, 2003:536). According to Sutton (2000) and Alles et al. (2000) information technology will be the key enabler for accounting information to become accessible on a real-time basis. E-business approach encouraged all firms to use information technologies and the internet in all functions. Accordingly, usage of information technologies and internet in nearly all units like marketing, manufacturing, inventory tracking, management and audit was initiated. In addition to these units, accounting unit was also affected from these developments. Many accounting applications were began to be performed with information technologies. Consequently, these developments gave rise to a new concept called "e-accounting" (Dinc and Varici, 2008:192).
1.1 Problem definition
The problem identified is that technology has evolved to the point that it is a must for all modern business to use e- accounting in order to keep up with the competition. However, there are still certain Mauritian accounting firms that have not adopted e- accounting system and some which have adopted e- accounting system but are not using it to its full extent and some which have adopted e- accounting but having some difficulties with it. So this research helps to understand the factors influencing the adoption of e- accounting and also to know about the impacts of e- accounting and how to improve the situation.
This study attempts to formulate answers to the research objectives mentioned below:
Evaluate the extent to which Mauritian accounting firms have adopted e- accounting.
Identify the factors affecting the adoption of e- accounting in Mauritian accounting firms.
Analyze the impacts of e- accounting on Mauritian accounting firms.
Recommend measures to counteract the negative impacts from the adoption of e- accounting in Mauritian accounting firms and to enhance the potential benefits.
1.3 Chapter Structure
Chapter 1: Introduction
This chapter starts with an introductory note about the research topic being adoption and impact of e- accounting on Mauritian accounting firms including the problem definition and research objectives.
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Chapter 2: Literature Review
This chapter deals with an extensive review of literature where tha works of several authors have been consulted and quoted. It gives details concerning the key terms, advantages and disadvantages of e- accounting among others.
Chapter 3: Research Methodology
The research methodology gives details about the research process used for this study, the different research methods used and data collection techniques that were used like literature review and survey.
Chapter 4: Analysis
This chapter deals with a detailed analysis of the survey. Charts, tables and statistical tools have been used to illustrate the findings of the survey.
Chapter 5: Conclusion and Recommendation
This chapter consists of discussions and possible recommendations based on the analysis of the survey that can help the Mauritian accounting firms in achieving greater benefit from the adoption of e- accounting.
Chapter 2 is structured along several themes. First of all, this chapter explains the basic terminology of e- accounting or digital accounting according to different authors. Second, this chapter outlines the difference between traditional accounting and e- accounting. Third, the advantages and risk of e- accounting are discussed. Fourth, it explains about the electronic accounting principles and it ends with a conclusion.
2.1 Definition of e- accounting
E-Accounting refers to Electronic Accounting, a term used to describe an accounting system that relies on computer technology for capturing and processing financial data in organizations. The primary purpose of an accounting information system (AIS) is the collection and recording of data and information regarding events that have an economic impact upon organizations and the maintenance, processing and communication of such information to internal and external stakeholders (Stefanou, 2006). An e-accounting system could be thought of as an interorganisational system because of its capability to electronically integrate a set of firms. In many operational applications the accounting entries can be generated as a by-product of the underlying transactions (Gullkvist, 2003:537).
Digital, or e-accounting, does not have a standard definition but merely refers to the changes in accounting due to computing and networking technologies (Deshmukh, 2006:1). The digital economy of digital enterprises equipped with coherent information systems, that are or can be integrated in the Internet, has a branch called digital accounting, as a result of the technological development in the context of the adoption of standardization and harmonization (Tugui and Georgescu, 2009:2). Digital accounting, or e-accounting, as a corresponding analog, refers to the representation of accounting information in the digital format, which can then be electronically manipulated and transmitted (Deshmukh, 2006:1). It concerns all accounting cycles, processes and functions in an enterprise that uses financial -accounting information (Genete and Tugui, 2008).
Gulkvist (2002) defined that "Paperless accounting is an accounting, where transactions, accounting entries and data are received, transferred, and stored electronically. Some of these technological and electronic solutions in financial accounting could be summarized as electronic ordering, invoicing, payment, and archives". Also, Larrivee (2005) explained paperless, in terms of the 2005 environment, "The ideal situation is that paper is replaced by electronic formats (imaging), resulting in electronically created information that reduces paper dependency and provides automating processes that effectively make using paper an option rather than a necessity".
2.2 The need for e- accounting
The idea of a "paperless accounting" has been brought forward mainly by authorized auditors during the last decade (Vahtera & Salmi 1998; Mäkinen & Vuorio 2002). Paperless system has become a need for business process. James Blaylock (2005), a CPA (Certified Public Accountant), believed that, "Going paperless is no longer an option, but must. With the trend of moving in this direction, it is imperative to go paperless in order to keep up with the competition". Paperless system has become a need for business process, especially for a company that has higher volumes and more transaction because it will demand a computerized system (Webster 2004). Ramirez and Cosme (2008) have discussed the importance of technology in their article, "It is certainly no secret that technology has evolved to the point that no modern business enterprise can survive without it". "In paperless input systems transactions are input directly into the computer network, and the need for keying in source documents is eliminated." Bodnar and Hopwood (2001:411, 426-427)
2.3 How e- accounting works
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One of accounting tools which is used for going paperless system is Accounting Information System. Auditors and accountants have to know well about the importance of accounting information system. A study of accounting information system will enhance understanding of the basic concept of manual data processing and how this processing is being carried out with the use of computers. Studying accounting information system will help auditors understand how to review computer-based system and help them in their planning and execution of audit procedures using computers. Accountants will work with computerized systems as part of their daily routine and will also become involved in the development of new computer system (Aseervatham and Anandarajah 2003).
The new information and communication technologies represent a vector of development and an important component of the formal information system is represented by computerized information (Alves, 2010:104). Many traditional accounting tasks dealing with recording and processing of accounting transactions can be reliably automated. Thus, accountants add little incremental value to organizations in this regard anymore. Rather, an accountant's worth is now reflected in higher-order critical-thinking skills, such as designing business processes, developing e-business models, providing independent assurance, and integrating strategic knowledge (Hunton, 2002).
2.4 Differences between traditional accounting and e- accounting
According to Yükçü and Gönen, 2011, the differences between the traditional accounting approach and the electronic accounting approach can be analyzed as: "purposes", "entries", "documentation", "archive", "reporting" and "personnel" criteria. These analyses are discussed thus:
The objectives of electronic accounting are as follows (Yükçü and Gönen, 2009):
i. Accounting organization: With electronic accounting, both an efficient accounting organization built to meet the information requirements of the management, and more organized accounting-related transactions will be achieved.
ii. Less paperwork: Together with e-accounting, papers will be redundant and taxpayers will no longer submit any books or documents. Hence, this will serve as less paperwork. It can be deemed as an environmentalist approach.
iii. Fast recognition: With electronic accounting, printing out legal books and financial tables will especially accelerate registration and reporting functions.
iv. Faster data reach: Keeping accounting-related data in electronic environment will enable the required data to be within reach whenever needed.
v. Accuracy: carrying out all transactions, especially four operations, in electronic environment with zero error will increase accuracy rating of accounting
vi. Fast auditing: Along with many audits, particularly internal audit will be performed in computer environment with no paperwork. Thus, the rapidity of the audit will go up.
As seen, the electronic accounting system adds very important possibilities to the traditional accounting system and the role and contribution of electronic accounting for producing accurate, fast and systematic accounting information is extremely high.
When entries are considered within the traditional accounting approach, the issue is entering financial transactions in ledgers. When entries are considered within the electronic accounting, the issue is entering financial transactions on magnetic environments called electronic ledgers. The entries made on those magnetic environments are called e-entry.
The reliability of the entry function in electronic accounting depends on the structure of the accounting package software. On the other hand, within electronic accounting, the account codes, the document related detailed information, entry date and change date in case of essential cases have to be entered. In addition to the security precautions, identifying a separate input password for each computer and software will also increase the reliability of information within electronic accounting (Dinç and Varici, 2008).
Great facilities are provided both for tax management and tax payer with electronic accounting system by keeping the ledgers and documents in electronic environment. The tax payer who avails from that system is saved from protection of ledgers, documents kept on paper and their transfers and paperwork, can reach any information at any time easily and the error possibility on papers is minimized.
Within the scope of traditional accounting approach, it is mandatory that an entry or a transaction have to be based on a document in order to be related to accounting process. In electronic accounting, the documents between the parties are organized in electronic environment. These electronic documents are transferred to the receiver through electronic environment. Organizing documents in electronic environment has also brought forward some concepts such as e-signature, e-contract, e-statement, e-money, etc., as well as - document concept. However, there are some differences for keeping and lifecycle of those documents.
The most important issue to be considered for documentation of electronic accounting is to change those documents subsequently. A precaution against that problem should be taken. For example, a precaution such as, using writable disks that can only be written for once, can be taken. These disks cannot be changed or deleted after they are burned. Also, the software should be kept in hard disks or CDs in order not to enable changing or deleting the commercial documents after a while (Dinç and Varici, 2008).