Influence of Accounting Information Systems (AIS) on Financial Reporting Accuracy
DOI:
https://doi.org/10.47672/ajacc.1787Keywords:
Accounting, Information Systems, (AIS) Financial Reporting, AccuracyAbstract
Purpose: The aim of the study was to assess the influence of accounting information systems (AIS) on financial reporting accuracy.
Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
Findings: Accounting Information Systems (AIS) have a substantial positive impact on financial reporting accuracy through error reduction, data integrity assurance, consistency enforcement, audit trail provision, and facilitating timely reporting, ultimately leading to more reliable financial statements.
Implications to Theory, Practice and Policy: Agency theory, information economics theory and structuration theory may be use to anchor future studies on assessing the influence of accounting information systems (AIS) on financial reporting accuracy. Research should explore the potential synergy between different advanced AIS technologies, such as AI and blockchain, to better understand how their combined use can enhance financial reporting accuracy. Organizations, especially in industries like healthcare, should consider investing in AIS automation to reduce reporting errors and improve financial reporting accuracy.
Downloads
References
Adegbite, E., et al. (2019). Challenges of financial reporting in Sub-Saharan Africa: An international capital market perspective. Accounting Forum, 43(3), 238-257. DOI: 10.1016/j.accfor.2019.05.001
Akamah, H., & Sawai, Y. (2017). The impact of corporate governance on the accuracy of financial reporting: Evidence from Japanese firms. Journal of International Accounting, Auditing, and Taxation, 29, 103-116. DOI: 10.1016/j.intaccaudtax.2017.09.001
Akerlof, G. A. (1970). The market for 'lemons': Quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84(3), 488-500.
Amoo, T. O., & Adegbite, E. (2011). Corporate governance and accounting in Nigeria. Managerial Auditing Journal, 26(5), 466-487. DOI: 10.1108/02686901111127280
Bonga-Bonga, L., & Nhavira, L. (2018). Financial management and the quality of financial reports of South African municipalities. Journal of Economics and Behavioral Studies, 10(2), 1-14. Available at: https://ifrnd.org/journal/index.php/jebs/article/view/2406
Chakraborty, I., & Hossain, M. (2016). Financial reporting quality in India: A survey of the issue. Research in Accounting in Emerging Economies, 16, 1-18. DOI: 10.1108/S1479-3563(2016)0000016006
Chen, X., & Wang, Y. (2020). Accounting Information Systems Integration and Financial Reporting Accuracy: Evidence from Chinese Manufacturing Firms. International Journal of Accounting Information Systems, 38, 100438.
Debreceny, R., & Gray, G. L. (2017). The production and use of semantically rich accounting reports on the Internet: XML and XBRL. International Journal of Accounting Information Systems, 11(2), 174-201.
DeFond, M. L., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2-3), 275-326. DOI: 10.1016/j.jacceco.2014.09.002
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14(1), 57-74.
Garcia, M., & Rodriguez, A. (2019). Cloud-Based Accounting Information Systems and Financial Reporting Accuracy in Small and Medium-Sized Enterprises. Journal of Small Business Management, 57(4), 1708-1731.
Giddens, A. (1984). The constitution of society: Outline of the theory of structuration. University of California Press.
Harjoto, M. A., & Hodge, F. D. (2015). The impact of corporate governance on sustainability disclosure. Journal of Applied Business Research, 31(5), 1905-1922. DOI: 10.19030/jabr.v31i5.9414
Iyoha, F. O., & Idode, A. O. (2017). International Financial Reporting Standards (IFRS) adoption and corporate financial reports in Nigeria. International Journal of Economics, Commerce and Management, 5(12), 91-102. Available at: https://ijecm.co.uk/wp-content/uploads/2017/12/5129.pdf
Kadir, D., et al. (2016). Challenges facing the South African public sector in complying with International Financial Reporting Standards. Critical Perspectives on Accounting, 37, 12-26. DOI: 10.1016/j.cpa.2015.05.007
Kim, H., et al. (2018). The Impact of Accounting Information System Data Quality on Financial Reporting Accuracy: Evidence from South Korean Banks. International Journal of Accounting Information Systems, 31, 70-83.
Lee, J. Y., et al. (2019). Enterprise system implementation and its impact on the alignment of IT and business goals. Information & Management, 48(2-3), 112-120.
Lima, G. A., et al. (2017). Financial reporting quality in Brazil: Evidence from state-owned and privately controlled enterprises. Emerging Markets Review, 31, 89-108. DOI: 10.1016/j.ememar.2016.12.004
Liu, Y., & Li, X. (2021). The Role of Accounting Information System Internal Controls in Mitigating Reporting Errors: Evidence from Chinese Listed Companies. Accounting, Organizations and Society, 88, 101296.
Mooya, M. M. (2014). The quality of financial reporting in the extractive industry: The case of the mining sector in Zambia. The International Journal of Accounting, 49(2), 234-263. DOI: 10.1016/j.intacc.2014.05.007
Ochieng, E. G., et al. (2018). Adoption of international financial reporting standards (IFRS) by SMEs in Kenya: A case of selected SMEs in Nairobi County. International Journal of Economics, Commerce, and Management, 6(6), 88-104. Available at: https://www.econjournals.com/index.php/ijecm/article/view/6606/4134
Sackey, F. G., et al. (2017). Financial reporting quality in the Ghanaian banking industry. Journal of Financial Reporting and Accounting, 15(2), 181-203. DOI: 10.1108/JFRA-08-2015-0096
Smith, J., et al. (2021). The Impact of Artificial Intelligence on Financial Reporting Accuracy: Evidence from Fortune 500 Companies. Journal of Accounting Research, 59(3), 743-774.
Tchamyou, V. S., et al. (2021). The role of artificial intelligence in accounting, auditing, and finance: A review of the literature. International Journal of Accounting Information Systems, 40, 100529. DOI: 10.1016/j.accinf.2020.100529.
Wang, L., & Zhang, H. (2020). The Impact of Accounting Information System Automation on Financial Reporting Accuracy: Evidence from U.S. Healthcare Organizations. Health Care Management Science, 23(4), 546-558.
Xu, X., et al. (2019). The Impact of Blockchain Technology on the Accuracy of Financial Reporting: Evidence from Cryptocurrency Exchanges. Journal of Information Systems, 33(3), 23-47.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Bonface Kimani
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
