Computerized Accounting and Performance of Selected Wholesale Companies in Mogadishu, Somalia

ABSTRACT This study established the relationship between computerized accounting systems and performance of selected wholesale companies in Mogadishu, Somalia. The study was based on these three objectives; I) to examine the effectiveness of computerized accounting systems; 2) to assess the performance of selected wholesale companies; and 3) to find out whether there is significant relationship between computerized accounting systems and performance of selected wholesale companies in Mogadishu, Somalia. A descriptive correlational and cross sectional survey design involving both qualitative and quantitative approaches was employed. Using Slovene's formula, a sample size of 114 was used to collect data from employees of the selected wholesale companies through purposive and systematic random sampling techniques. a researcher made questionnaire was used to collect data, which was analyzed using frequencies and percentages, mean scores and ranks, Pearson's Linear correlation coefficient and Linear regression analysis. The findings revealed that computerized accounting was effective in the selected wholesale companies (overall mean= 2.78); performance of the selected wholesale companies was also found to be high (overall mean = 2.71); the relationship between effectiveness of computerized accounting and performance of the selected wholesale companies in Mogadishu was also positive and significant (at r =.988; R2 = 0.978; and sig. = 0.000). Basing on the individual items under computerized accounting, this study found out that effectiveness in data validation; financial security and financial information and reporting have positive and significant relationship with performance of the selected wholesale companies. This finding is demonstrated by the p values of 0.379; 0.217 and 0.264 at significant values of 0.003; 0.000; and 0.009 respectively at standardized significant value of 0.05. However, data storage and accuracy did not have any significant relationship with performance of selected wholesale companies as its significant value computed in 0.121 and this is greater than the standardized significant value of 0.05, so the null hypothesis was accepted. The researcher concluded that computerized accounting in the selected wholesale companies in Mogadishu is effective; the performance of the selected wholesale companies is high; and that there is a strong, positive and significant relationship between computerized accounting and the performance of the selected wholesale companies in Mogadishu. The study recommends that the management of the selected companies should work hand in hand with their accountants to ensure improvements are ensured in the areas of data validation financial repmting and information as well as data storage and accuracy such that improvement in performance of the compani'es can be enhanced.

TABLE OF CONTENTS

DECLARATION ........................................................................................................................ i

APPROVAL ......................................................................................................................... ii

DEDICATION .................................................................................................................... iii

ACKNOWLEDGEMENT ................................................................................................... iv

TABLE OF CONTENTS ...................................................................................................... v

LIST OF TABLES ................................................................................................................ i

LIST OF FIGURES .............................................................................................................. ii

ABSTRACT ........................................................................................................................ iv

CHAPTER ONE .................................................................................................................. 1

INTRODUCTION ............................................................................................................... 1

I. I Introduction ..................................................................................................................... I

1.2. Background of the Study ................................................................................................ I

1.2. I Historical Perspective ................................................................................................... I

1.2.2 Theoretical Perspective ................................................................................................ 3

I .2.4 Contextual Perspective ................................................................................................. 6

I .3 Statement of the Problem ................................................................................................ 7

1.4 Purpose of the Study ........................................................................................................ 7

1.5 Specific Objectives .......................................................................................................... 8

1.6 Research Questions ......................................................................................................... 8

1.7 Research Hypotheses ....................................................................................................... 8

1.8 Scope of the Study ........................................................................................................... 8

1.9 Significance of the study ............................................................................................... 10

I .IO Operational Definition of Key Terms ......................................................................... 1 I

V

CHAPTER TWO ............................................................................................................... 12

LITERATURE RE VEIW ................................................................................................. 12

2.1 Introduction ................................................................................................................... 12

2.2 Theoretical Review ........................................................................................................ 12

2.5 Business Performance ................................................................................................... 18

2.6 Computerized Accounting and Business Performance ................................................. 21

2.7 Existing Gaps in the Literature ..................................................................................... .23

CHAPTER THREE .......................................................................................................... 25

METHODOLOGY ............................................................................................................ 25

3. I Introduction ................................................................................................................... 25

3.2 Research Design ............................................................................................................ 25

3.3 Research Population ..... , ................................................................................................ 25

3.4 Sample Size ................................................................................................................... 26

3.5 Sampling Procedure ...................................................................................................... 27

3.6 Data Collection Instruments .......................................................................................... 28

3.7 Validity and Reliability of the Instruments .................................................................. .29

3.8 Data Gathering Procedures ............................................................................................ 31

3.9 Data Analysis ................................................................................................................ 32

3.10 Measurement ofVariables .......................................................................................... .32

3.11 Ethical Considerations ................................................................................................ .33

3.12 Limitations of the Study .............................................................................................. 33

CHAPTER FOUR ............................................................................................................. 35

DATA PRESENTATION, ANALYSIS AND INTERPRETATION ............................ 35

4. I Introduction .................................................................................................................. .35

4.2 Profile of Respondents ................................................................................................. .35

vi

4.3 Effectiveness of Computerized Accounting in Wholesale Companies ........................ .38

4.4 Level of Performance of Selected Wholesale Companies in Mogadishu ..................... 44

Source: primary data, 2014 ................................................................................................ .45

2.52 at standard deviation of0.773) ................................................................................... .45

4.5 Relationship between Computerized Accounting and Performance of the selected

Wholesale Companies in Mogadishu ................................................................................. .48

CHAPTER FIVE ................................................................................................................. 52

DISCUSSION OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS .......... 52

5.1 Introduction ................................................................................................................... 52

5.2 Discussion of Findings ................................................................................................. .52

· 5.3 Conclusions ................................................................................................................... 57

5.4 Recommendations ......................................................................................................... 59

5.5 Areas for Further Research ............................................................................................ 60

REFERENCES .................................................................................................................... 61

APENDICES ......................... ,. ................................................................................................. 67

APPENDIX 1 A: TRANSMITTAL LETTER .................................................................... 67

APPENDIX lB: TRANSMITTAL LETTER FOR THE RESPONDENTS ....................... 68

APPENDIX II: CLEARANCE FROM ETHICS COMMITTEE ....................................... 69

APPENDIX III: INFORMED CONSENT .......................................................................... 70

APPENDIX IV: QUESTIONNAIRE .................................................................................. 71

APPENDIX VI: TIME FRAME FOR RESEARCH PROJECT ......................................... 78

APPENDIX VII: THE PROPOSED BUDGET .................................................................. 79