CHAPTER ONE

1.0 BACKGROUND TO THE STUDY

For many years, all business was undertaken face to face. Gradually, orders started to be placed

by other means –letter, telegram, telex, fax and telephone. However, when transactions were

undertaken between businesses, paper was normally exchanged indicating an order was being

placed and subsequently, indicating how seller required to be paid for the goods ordered.

This is the business environment in which accounting developed. Accountants learnt to use the

documents relating to the transaction in order to make entries in the accounting books. They

ensured than audit trail running from the original paperwork right through to each entry in the

ledger. Checking these entries was time consuming but always possible and where original

records do not exist, auditors would get very concerned as to the validity of transactions.

Sometimes they accepted the word of the proprietor that transactions were valid. On the other

occasions, they did not and an investigation was launched in pursuit of evidence that things were

recorded inaccurately.

Other forms of business started to emerge. Ones where communication was electronic but

initially all payment was by traditional means. Then payments too became increasingly. Now,

not only can communication and payment all be done electronically, but the seller may never

physically possess the goods or services being sold and in fact the seller may not even be aware

that a transaction has occurred (as the sale process is entirely automated). Also products that

1
were traditionally physical- books and CDs, for example can now be sold as electronic files

downloaded off the internet directly into the customer’s PC.

This is electronic commerce and is the environment in which an increasing proportion of

business is now conducted. It was expected that the total value of electronic commerce

transactions would rise by 400% between 2001 and 2004 to around US $5000 billion.

In a report issued in 2001, The Global Online Retailing study the accounting firm Ernst & Young

stated that online retailing is no longer an option but a business requirement. Retail businesses

must move into electronic commerce or watch their markets disappear into the hands of their

competitors. That was seven years ago. If it were important then, it is even more so now. One

obvious change that has occurred since 2001 is the massive switch to purchasing music by

downloading it from the internet. In 2001, this was rare; music was bought on CDs from shops.

Now shops are closing as buyers have switched to other sellers, who are operating virtual shops

and conducting their business as electronic commerce organizations.

1.1 STATEMENT OF THE PROBLEM

Many accountants have performed in adequately over the years. Factors which have contributed

to this include the inadequate techniques, skills and understanding to their role and the failure to

recognize weaknesses and loopholes and how to trap errors in an electronic business

environment and the failure to become technologically competent.

2
1.2 PURPOSE OF THE STUDY

This study seeks to achieve the following purposes:

1. To assess the impact of electronic commerce upon sellers, buyers and accountants

2. To assess whether electronic commerce involves the transmission of confidential,

sensitive and valued information

3. To assess whether accountants who work for the seller or buyer are relatively unaffected

by the shift from a traditional business environment.

1.3 RELEVANCE OF THE STUDY

The result of the study can be used as a workable document by accountants in JVC Ghana to

improve upon decision making, allocating of resources to affected areas, inform consumers of

repair efforts and restore service fast and also to measure the efficiency and transformation of

electronic commerce and finally to measure the accounting function in terms of maintain and

managing the firm’s financial records – receipts, disbursement, depreciations, payroll – to

account for the flow of funds in a firm.

3
1.4 RESEARCH QUESTIONS

The researcher will like to investigate on the following questions:

 Why retail business cannot afford to stay out of electronic commerce?

 Is it true that electronic commerce is having an impact upon the role of the accountant?

 Is lack of technical knowledge in accounting function in JVC Company a case?

1.5 LIMITATION OF THE STUDY

The research will cover only JVC Company in Tema.

During this study, I will face the following problems:

 Financial problem and academic interruption

 Some employees will feel reluctant in providing adequate information.

 Time will not allow me to expand the scope of the study

1.6 ORGANIZATION OF THE STUDY

The first chapter of this research is the introduction. It has to do with the background to the

study, Statement of the problem, Objective of the study, Hypothesis, Scope of the study and

the Significance of the study.

4
Chapter two talks about the literature to be reviewed for adequate understanding of the text

and terminology used in the study.

Chapter three duels on the methodology. It focuses on the population size, the sample and

sampling procedure adopted, research instruments, the method of data analysis, limitation of

the study and assumptions of the study.

Chapter four makes analysis and interprets the data collected for the study through the

method applied in chapter three.

Chapter Five summarizes the work, concludes it with some recommendations.

5
 CHAPTER TWO

2.0 LITERATURE REVIEW

This is intended to review the position of writers on the subject matter.

2.1 WHAT IS INTERNET?

The internet is the framework for the ever talked about information superhighway. The biggest

technological advancement since personal computer and the primarily technological force

causing all corporations to rethink their business model, the internet is a system of millions of

interconnected networks that spans to the earth. (Wilson 1996)

2.3 WHAT IS THE WORLD WIDE WEB?

The World Wide Web is subsets of the internet. It was developed several years ago and credits it

success to a software product known as MOSAIC. MOSAIC gave users the ability to experience

pictures, sound video, graphics, etc in an easy to use print and click environment. The client/

server architecture forms the basis implementation platform of WWW. As this product gained

popularity throughout the world, corporation began to envision the power of the internet and

specifically the web.

Source: Aurel Voiculescu

http://www.aurelvoiculescu.co.MBA
6
2.4 WHAT IS ELECTRONIC COMMERCE?

As with many new service simply defining what constitute electronic commerce is not clear and

differs significantly according to the source .The broadest definition includes all electronic

transactions including electronic funds transfers and credit card transactions ,then the

infrastructure needed to support electronic commerce intermediary services. Businesses

communicate with customers and partners through changing. Internet is one of the newest and

for many purposes, best business communications channel. E-commerce is doing business on

line. It is about using the power of digital information to understand the needs and the

preferences of each customer and each partner to customize products and services for them and

then to deliver the products and services as quickly as possible. Personalized automated service

offer business the potential to increase revenues, lower cost and establish and strengthen

customer and partner relationships.

Electronic commerce is the carrying out of business activities that lead to an exchange of value

across telecommunications networks (ELTO, 1997)

7
2.5 ACCOUNTING

Accounting information systems covers all business transactions from backbone accounting

transaction process to systems to sophisticated financial management planning and processing

systems. Financial reporting starts at the operational levels of the organization, where the

transaction processing systems capture important business events such as normal production,

purchasing, and selling activities. These events are classified and summarized for internal

decision making and external financial reporting.

2.6 HYPOTHESIS

The hypothesis of the study is stated: Accountants will do better at JVC Ghana through the use

of electronic commerce.

8
 CHAPTER THREE

METHODOLOGY

3.0 POPULATION

For the purpose of this study, the target population consists of management of JVC Ghana who

are drawn from the accounting department and the individual customers of the company.

3.1 SAMPLE SIZE

The sample size consists of the Chief Financial Officer, the Marketing Manager and the

individual customers, specifically those in the marketing and financial department. The size

covers 40 of the sampling population.

DEPARTMENT & CUSTOMERS RESPONDENT PERCENTAGE

15 Sales and marketing 5 12.5
2 Accounting and finance 5 12.5
3 Sellers and buyers 30 75
TOTAL 40 100

3.2 SAMPLING PROCEDURE

9
The sample method is by sample random. Here everyone in the target audience has an equal

chance of being presented. The choice o this approach is on the grounds that they are quicker and

cheaper and also has the ability to present a higher degree of accuracy in the data collected.

3.3 RESEARCH INSTRUMENT

In this study the different set of questionnaires were presented to the staff of JVC Company, their

management and their customers. The questionnaires in some areas were also needed as

interview guide especially for the individual customers who had no time to write or answer the

questions which were given to them.

3.4 TOOLS FOR THE DATA ANALYSIS

The researchers employed the use of simple tables, pie charts and bar graph in data analysis.

These methods were selected because they were easy to manipulate, read and interpret.

CHAPTER FOUR

10
 DATA ANALYSIS AND DISCUSSIONS FINDINGS

4.0 GENERAL INFORMATION AND SAMPLE

This section is mainly concerned with analysis and interpretation of the data collection

based on the research methodology for the purpose of the study. The findings are all based on the

data collated through questionnaires.

The number of the target groups is fifteen (15) staffs and twenty five (25) customers.

All questionnaires distributed are retrieved representing 100%.

4.1 DATA PRESENTATION AND ANALYSIS

Below is the analysis from the researcher’s respondents out of which the researcher

derived findings under the various subs-questions. The researcher however, grouped the

questions to reflect the objectives of the study.

4.2 ANALYSIS OF CUSTOMER AND STAFF RESPONSE

Statistical tools such as tables and charts are used to analyze the data for easy analysis

and interpretation in the content of the research problem of the study area.

4.3 GENDER

11
Table 1: Gender distribution of respondents

Gender Frequency Percentage %

Male 28 70%

Female 12 30%

Total 40 100%

Gender distribution

Gender distribution

30
Frequency

20
Frequency
10

0
Male Female
response

Table 1, illustrates the gender distribution of the respondents. It shows that twenty-eight of the

respondents representing (70%) were males, while twelve representing (30%) were females.

Inferring from the analysis, the table indicates that males constitute the majority of respondents.

4.4 DISCUSSION OF RESEARCH FINDINGS

12
 Customer perception and satisfaction about the use of electronic commerce in JVC

Company

This part deals with assessing customer perception and satisfaction about the use of electronic

commerce. This is illustrated by the following tables and charts below;

Satisfaction rate about the use of electronic commerce

Response Frequency Percentage (%)

Yes 32 80%

No 8 20%

Total 40 100%

Satisfaction rate

35
30
f re q u e n c y

25
20
Frequency
15
10
5
0
Yes No
Re s pons e s

From

the table shown above thirty-two (80%) respondent are satisfied with the electronic commerce

procedure used in JVC whiles about nine (20%) respondents are not satisfied. It is however, clear

that the marketing of electronic commerce by JVC is quite unique but a lot has to be done.

13
Furthermore, respondent satisfaction about electronic commerce done in JVC as compared to

other competing companies is favorable.

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

INTRODUCTION

14
 This chapter draws conclusion and discusses the implications of the findings for future

improvement of electronic commerce on accounting.

SUMMARY

The grand objectives of this study were to find out the impact of electronic commerce on

accounting and specifically JVC Company. The sampling of the department, and respondent for

this study were done by adopting a probability sampling procedure of which the simple random

sampling technique was adopted.

The data were collected by means of personal interviews, observation, questionnaire and

secondary sources. The result revealed that, electronic commerce and accounting are used by the

company to achieve its state objectives.

The result shows that a lot has been earned through electronic commerce on accounting

by the JVC Limited in Tema. The positive results include the following point:

 Improved packaging and branding.

 Increased productivity and company competence through efficient employees welfare

policies

Even though, the research revealed more positive results on the use of electronic

commerce, few problems such as lack of staff, limitation in technical know how and low

budgetary allocation for the department hinders the proper implementation of electronic

commerce.

15
CONCLUSION

In conclusion, the study after analysis ascertained that, even though there are few

problems encountered in the act of implementing electronic commerce on accounting, it is

believed that before any company achieve its objectives as stated unless it passes through a route,

that is electronic commerce are use effectively which will enable the company to achieve its

objectives and help the economy to develop.

RECOMMENDATION

From the research findings, if these recommendations are taken into consideration a lot of

success will come in the way of the company, thus JVC Company.

 Accountants should learn to use the documents relating to transaction used in electronic

commerce to make entries in the accounting books.

 Department who are responsible for the implementation of the electronic commerce

strategy should be equipped with the necessary facilities.

 To be able to achieve customer satisfaction the quality of the products of electronic

commerce should be watched closely, incentive package for loyal customers, special

treatments for corporate customers and embarking on a more aggressive promotional tool

should be improved.

 Finally, it is the hope of the researcher that, the research work will be studied by those

who want to enter into the electronic business and specifically JVC Company who is

16
 already in the business so as to improve upon their overall operations to capture greater

market share in the Ghanaian environment.

REFERENCES:

Kenneth,C & Jane P. Management Information System, New York; Pearson Educational

International

Frank,W & Alan, S. Business Accounting 2, 11th Edition; Prentice Hall

17
http://www.aurelvoiculescu.co.MBA

APPENDIX

QUESTIONNIARE FOR CUSTOMERS

This questionnaire is being administrated for the purpose of gathering data for a research

titled “Accounting and Electronic Commerce” A case study of JVC limited in Tema.

18
 This research is an academic exercise to fulfill part of the university requirement for the

award of Bachelor of Science (BSC) in Accounting. All information provided shall be treated as

confidential. Thank for your cooperative.

 Institution: University College of Management Studies

 Researcher: Julliet Ofori-Amoah

Please tick (√) against the one that reflects your understanding about the issue.

Section 1

1) Age ( ) 20-30 ( ) 31-40 ( ) 41-50 ( ) 51-60 ( ) 61- above

2) Gender ( ) male ( ) female

3) Year ( ) fresher ( ) sophomore ( ) junior ( ) senior

4) Marital status ( ) single ( ) married ( ) divorced ( ) widowed

QUESTIONNIARE FOR MANAGEMENT AND STAFF OF JVC COMPANY IN TEMA

This questionnaire is being administrated for the purpose of gathering data for a research

titled “Accounting and Electronic Commerce” A case study of JVC Company in Tema.

19
 This research is an academic exercise to fulfill part of the university requirement for the

award of Bachelor of Science (BSC) in Accounting. All information provided shall be treated as

confidential. Thank for your cooperative.

 Institution: University College of Management Studies

 Researcher: Julliet Ofori-Amoah

Each of the contain options, tick (√) in the box against the one that reflects your

understanding about the issue.

Section 1(PERSONAL INFORMATION)

Age ( ) 20-30 ( ) 31-40 ( ) 41-50 ( ) 51-60 ( ) 61- above

Gender ( ) Male ( ) Female

Marital status ( ) Single ( ) Married ( ) Divorced ( ) Widowed

Nationality; ( ) Ghanaian foreigner (state country)………………………

Rank / status……………………………………………………………………………

For how long have you been working in the company?....................................................

Section 2: (CORPORATE INFORMATION.)

1. When was the company established?

20
 ..................................................................................................................................

2. What types of products are produced by the company using electronic commerce?

…………………………………………………………………………………

3. When did the company start using electronic commerce?

…………………………………………………………………………………..

4. How is the systems built used to track funds flow through pay checks, payment to

vendors, security reports and receipts and daily transaction report?

………………………………………. ……………………………………

……………………………………………………………………………………

5. What processes are involved in managing the capitalization of the firm?

21
…………………………………………………………………………………………

………………………………………………………………………………………….

22