How To Develop and Improve Accounting System

REVIEW OF RELATED LITERATURE

Hussey (2005) defines accounting system as the system designed to record the

Accounting transaction and events of a business in a way that complies with its policies

and procedures. Manual system of accounting is a system, which uses special journals to

stream line the journalizing and posting procedures. To handle a large volume of

transaction rapidly and effectively, it is helpful to group the transactions into classes and

to use a specialized journal for each. Recording and posting business transactions on

these journals using the double entry record keeping (Ama, Simplified Financial

Accounting , 2004). Tanenbaum (2010) states that manual processing of accounting data

is too slow, and labour intensive in the banking industry.

2. Accounting Technology

In relation with the problem of slow manual process in accounting, the

advancements in information technology have been introduced and eventually led to the

introduction of Computerised Accounting Systems in corporate reporting to help produce

relevant and faithful representative financial reports for both management and external
users (Bhorka, 2005). A computer – based accounting system processes data in the same

manner, as does a manual system. Transactions are manually recorded on sources

documents, the data from these source documents are then key – punched into punched

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