Project - Randika Sandaruwan MS08 - Impact of Integrated Accounting System On Performance of The Organzation WSR Ruhunu Hospitals PDF

THE IMPACT OF INTEGRATED ACCOUNTING SYSTEM EFFICIENCY
ON THE ORGANIZATIONAL PERFORMANCE WITH SPECIAL

REFERENCE TO RUHUNU HOSPITALS (PVT) LTD
Submitted by.
P. K. Randika Sandaruwan
EUSL/TC/IS/2016/MS/08
DEPARTMENT OF BUSINESS AND MANAGEMENT STUDIES,
FACULTY OF COMMUNICATION AND BUSINESS STUDIES,
TRINOMALEE CAMPUS
EASTERN UNIVERSITY OF SRI LANKA
2022
Submitted by.
An Independent Research Report Submitted to the Department of Business and Management

Studies, Faculty of Communication and Business Studies, Trincomalee Campus, Eastern
University, Sri Lanka as a partial fulfillment of the Bachelor of Science in
Accounting and Financial Management (Special) Degree Programme.
DEPARTMENT OF BUSINESS AND MANAGEMENT STUDIES,
FACULTY OF COMMUNICATION AND BUSINESS STUDIES,
TRINOMALEE CAMPUS
EASTERN UNIVERSITY OF SRI LANKA
2022
ii
This is to certify that the research report titled,

Submitted by.
This is to certify that the Research report titled above has been accepted by the Department of
Business and Management Studies, Faculty of Communication and Business Studies,
Trincomalee Campus, Eastern University, Sri Lanka as a partial fulfillment of the Bachelor of
Science in Accounting and Financial Management (Special) Degree Programme.
Supervisor: ......................................................... Date: ................................................
First Examiner:........................................................ Date: ................................................
Head: ......................................................... Date: ................................................
Dean: ......................................................... Date: ................................................
iii
Declaration of the Student
I, P. K. Randika Sandaruwan, do hereby declare that this work originally carried out by me
under the guideline of Senior Lecturer (Grade II) Mr. D. Ruwan Lakjeewa, Department of
Business and Management Studies, Faculty of Communication and Business Studies,
Trincomalee Campus of Eastern University - Sri Lanka, and this work has not been submitted
elsewhere for any other degree. I certify that this Project does not incorporate without due
acknowledgement of any material previously submitted for degree or diploma in any
university. It does not contain any material previously publish or unpublished by any other
person except where due reference is made in the text.
............................................................ .........................................................
Signature of Candidate Date
iv
Declaration of the Supervisor
I hereby endorse the declaration by the candidate,
............................................................ .........................................................
D. Ruwan Lakjeewa (Grade II) Date
Senior Lecturer,
Department of Business and Management Studies,
Faculty of Communication and Business Studies,
Trincomalee Campus
Eastern University, Sri Lanka.
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Table of Contents
Declaration of the Student ....................................................................................................... iv
Declaration of the Supervisor ................................................................................................... v
List of Figures .......................................................................................................................... ix
List of Tables ............................................................................................................................ x
List of Abbreviations ............................................................................................................... xi
Abstract ...................................................................................................................................xii
Acknowledgement ................................................................................................................ xiii
CHAPTER ONE: INTRODUCTION ...................................................................................... 1
1.1. Introduction ..................................................................................................................... 1
1.1.1. Integrated Accounting System.................................................................................. 1
1.1.2. Background of the Study. ......................................................................................... 2
1.1.3. Problem Statement. ................................................................................................... 4
1.1.4. Study Questions ........................................................................................................ 6
1.1.5. Study Objectives ....................................................................................................... 6
1.1.6. Main Objective: ........................................................................................................ 6
1.1.7. Sub Objectives: ......................................................................................................... 6
1.1.8. Significance of the study. ......................................................................................... 6
1.1.9. Micro and Small Business Owners and Entrepreneurs ............................................ 7
1.1.10. The Government ..................................................................................................... 7
1.1.11. Studiers and other academicians............................................................................. 7
1.1.12. Scope of the study................................................................................................... 7
1.1.13. Chapter organization............................................................................................... 8
1.1.14. Chapter Summary ................................................................................................... 9
CHAPTER TWO: LITERATURE REVIEW ........................................................................ 10
2.1. Introduction ................................................................................................................... 10
2.2. Theoretical Approaches................................................................................................. 10
vi
2.2.1. Contingency Theory ............................................................................................... 10
2.2.2. Innovation diffusion theory .................................................................................... 11
2.2.3. Decomposed Theory of Planned Behaviour ........................................................... 11
2.2.4. Integrated Accounting System................................................................................ 12
2.3. Review of Empirical Studies ......................................................................................... 16
2.3.1. Integrated Accounting System................................................................................ 16
2.3.2. System Quality & Information Quality .................................................................. 17
2.3.3. Individual Impact & Organizational Impact ........................................................... 19
2.4. Literature Review Summary ......................................................................................... 21
2.5. Chapter summary .......................................................................................................... 22
CHAPTER THREE: RESEARCH METHODOLOGY ......................................................... 23
3.1. Introduction ................................................................................................................... 23
3.2. Research Site ................................................................................................................. 23
3.3. Conceptualization of variables ...................................................................................... 23
3.4. Development of Hypothesis .......................................................................................... 24
3.5. Operationalization ......................................................................................................... 25
3.6. Research Design ............................................................................................................ 26
3.7. Population...................................................................................................................... 26
3.8. Sample Design............................................................................................................... 26
3.9. Sample Technique ......................................................................................................... 26
3.10. Sample Framework ..................................................................................................... 27
3.11. Method of Data Analysis and Presentation ................................................................. 27
3.11.1. Data Collection ..................................................................................................... 27
3.11.2. Equipment validity and reliability ........................................................................ 27
3.11.3. Regression ............................................................................................................ 28
3.11.4. R-square and prepared R-squares ......................................................................... 29
3.11.5. Variable coefficients ............................................................................................. 29
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3.11.6. Model development .............................................................................................. 29
3.12. Chapter summary ........................................................................................................ 30
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS ........................................ 31
4.1. Introduction ................................................................................................................... 31
4.2. Data Screening .............................................................................................................. 31
4.3. Data collection............................................................................................................... 31
4.4. Demographic Information ............................................................................................. 32
4.5. Reliability ...................................................................................................................... 34
4.6. Analysis of Research Information ................................................................................. 35
4.6.1. Normality Test of Variables ................................................................................... 35
4.6.2. Descriptive Analysis ............................................................................................... 35
4.7. Correlations of all variables .......................................................................................... 37
4.8. Multiply Regression Analysis ....................................................................................... 38
4.9. Hypothesis Testing and Results .................................................................................... 41
4.10. Chapter Summery ........................................................................................................ 41
CHAPTER FIVE: CONCLUSION AND RECCOMENDATION ........................................ 42
5.1. Introduction ................................................................................................................... 42
5.2. Conclusion..................................................................................................................... 42
5.3. Recommendation ........................................................................................................... 43
REFERENCES ....................................................................................................................... 44
APPENDIX 01 ........................................................................................................................ 48
viii
List of Figures
Figure 2.1 - Information System Success Model ..................................................................... 16

Figure 3.1 – Conceptual Framework ....................................................................................... 24
Figure 4.1 - Gender characteristics of respondents .................................................................. 32
Figure 4.2 - Age Group of the respondents.............................................................................. 32
Figure 4.3 – Working Experience of Employees ..................................................................... 33
Figure 4.4 -Work done by the employees within computerized working environment .......... 33
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List of Tables
Table 3.1 – Operationalization of Variables ............................................................................ 25

Table 3.2 – Sample Framework ............................................................................................... 27
Table 4.1 – Reliability Statistics .............................................................................................. 34
Table 4.2 – Descriptive Statistics............................................................................................. 36
Table 4.3 - Correlations ........................................................................................................... 37
Table 4.4 – Model Summary ................................................................................................... 38
Table 4.5 – Analysis of Variance ............................................................................................. 39
Table 4.6 – Analysis of Coefficients........................................................................................ 39
Table 4.7 – Testing of Hypotheses .......................................................................................... 41
x
List of Abbreviations
OP – Performance of the Organization

SQ – System Quality
IQ – Information Quality
RH – Ruhunu Hospital (Pvt) Ltd
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Abstract
The problem is to be addressed through this study is how to use an integrated accounting system
to achieve higher organizational performance and its impact in Ruhunu Hospitals (Pvt) Ltd.
Therefore, the main objective of this study is to identify the impact of Integrated Accounting
System efficiency on the organizational performance. The population selected for this study
consists of personnel in Accounts and Finance division and the sample selected includes 50
respondents using convenience sampling method. Based on the survey data collected through
a structured questionnaire in 2022. To achieve the objectives of the study, hypotheses were
developed according to the objectives. This study examined the applicability of two theoretical
perspectives of independent variables of study namely system quality and information quality
and used organizational performance as the dependent variables of the study. Author have
examined the relationship between the variables and impact of those factors on dependent
variable to assess the hypotheses created.
The results of the study show that there is a positively significant association between the
impact of integrated accounting system efficiency and organizational performance. This
analysis is useful to gain insights on the performance of accounting division of Ruhunu
Hospitals (Pvt) Ltd.
Keywords: Integrated Accounting System, System Quality, Information Quality,

Organizational Performance
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Acknowledgement
I am especially grateful to my supervisor Mr.D. Ruwan Lakjeewa, the senior Lecturer whose
encouragement, supervision, and support from the initial steps to the final level of the study.
My deepest gratitude goes to all other lecturers of the campus who helped me to prepare this
study.
Most importantly I thank the of all the respondent for their kind corporation in collecting data
whose support is essential to me in preparing this report and researchers whose findings were
valuable in preparing this research.
I wish to express my sincere gratitude to Prof. (Mrs). Chandravathany G Devadason, Rector

of the Trincomalee Campus of Eastern University Sri Lanka, Mr T. Baskar, Dean of the
faculty of Communication and Business studies and Head of the Department Senior Lecturer
Mrs. Vithya Leninkumar for their support in my university period.
Finally, I would like to thank all well-wishers who inspired and supported me in this project
writing venture and I would like to offer my sincere gratitude to my family for their immense
support given to pursue my dreams from the beginning of my life and all my teachers who
helped me to be the person I am today and raise me to this position in my life.
Thank you and best regards,

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CHAPTER ONE:
INTRODUCTION
1.1. Introduction
1.1.1. Integrated Accounting System.

The main objective of this project is to identify and assess the impact of integrated accounting
system on the organizational performance. Integrated accounting systems are broadly defined
as software tools for processing financial information in a business (Petter S, DeLone W,
McLean E., 2008). Meigs & Meigs, (1998) defined integrated accounting system as a
computerized accounting system used by computers to capture, process, store and publish
financial information. Meigs & Meigs, (1998) said the integrated accounting system records
all transactions that usually occur in connection with events that affect the company's financial
condition and performance. This implies that integrated accounting system activities are not
solely for financial reporting purposes. Its role goes beyond this traditional vision. AIS should
be used to plan and manage business operations. It can also be used as a budget control
mechanism. Therefore, in order to take full advantage of the system, the method must be fully
followed.
An integrated accounting system is a type of software that combines major financial accounting
functions into one application. Replacing several discrete systems or programs eliminates the
need for separate books or records for ordering, costing and other management accounting
purposes. Integrating these features helps standardize procedures for recording transactions and
disseminating financial information and interconnects the reporting activities of companies’
different functional areas such as point of sale terminals, offices and stock facilities (Petter et
al., 2008).
Integrated accounting systems furnish information regarding the cost of each product, job or
operation as well as comprehensive information about the profit or loss of an entire
organization. These systems help management achieve and maintain control over operations
by enabling companies to determine marginal costs, variances and abnormal losses or gains.
Additionally, integrated accounting systems can be used to estimate, report and monitor a
company’s job costs as well as track and convert employee time into payroll. These systems
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can also handle additional processes such as inventory purchases, assembly and sales and
sending information like statements and invoices to customers or vendors (Meigs and Meigs,
1998).
A key benefit of an integrated accounting system is that information is entered once and shared
with other modules, including the general ledger. Information database is used and accessed
by all applications. Not having to re-enter data from one system to another reduces the
likelihood of human error and eliminates the need to reconcile various ledgers and functions,
which update automatically and in real time (Soh Yong and Mohammed Esmail Abu AL-Rejal,
2017)
This means the financials are always up-to-date and that sophisticated accounting operations,
such as job costing and commission calculation, are performed automatically just by processing
the orders. Additionally, maintaining one set of accounts avoids duplication of efforts and
provides decision-makers with accurate information in a timely manner (Beltrán, 2010).
1.1.2. Background of the Study.

Accounting aims, as an information system aims, to provide various users with different forms
of use full information to meet their various needs. Therefore, accounting seeks to take
advantage of the surrounding circumstances in order to improve the quality and quantity of
information and the delivery mechanism to users. (Petter et al., 2008) The relationship between
accounting and the computer began later 20th century. This relationship continued to evolve
and expanded in the eighties of the last century due to the development of the network and
decision-support systems when it took a broader dimension and more flexible known as the
computerization of accounting. As a result, recently the several accounting software were
developed and popular on the shelves shops to become accessible to most interested in them at
reasonable cost. On the other hand, although there are some organizations that prefer to develop
their own programs, either by themselves or through professionals, multi business
organizations recently adopted the use of comprehensive business systems contain several sub-
systems including accounting system. These integrated systems are providing integrated
incompatible results to the departments and assist them to improve the quality of their decisions
and the preparation of comprehensive integrated plans (Petter et al., 2008)
2
An integrated system is a complex set of computer application designed to integrate the
processes and functions within the same company. This system is able to present a holistic
vision of the company’s business by sharing a common and integrated database. In the era of
the integrated system, the integrated accounting system has become richer (Petter et al., 2008)
The importance of the information has increased, and the statistics are current and pertinent.
the application of modern management accounting methods to the demands of the organization.
As a result, the integrated accounting system offers financial accounting, management control,
and financial analysis information that is both historical and predicting. Additionally,
organizations work to deal with the ongoing technological advancements that have made it
possible to produce and use accounting information to address the high degree of complexity
in the current competitive market environment (Soh Yong and Mohammed Esmail Abu AL-
Rejal, 2017)
Therefore, an accounting information system is one of the most effective decision-making tools
of the finance division of Organizations in dealing with this complexity and uncertainty. It also
a tool of management that provides an orderly method of gathering and organizing information
about various business transactions and therefore it may be used as an aid to management, in
operating the business (Soh Yong and Mohammed Esmail Abu AL-Rejal, 2017)
In a highly competitive global business environment, firms seek to improve or maintain their
competitiveness by using information system to improve customer service, shorten cycle times
and reduce cost. Integrated systems provide many benefits to changing expectations by
providing accurate, timely and integrated information to improve decision making (Trott and
Hoecht, 2004).
When the various accounting systems (financial accounting, cost accounting, and cash flows)
are integrated, accounting as a whole becomes a basis for long-term management of the
company and a tool for decision-making.
There are many links between the two systems: although management accounting needs
financial accounting, where the basic information is entered, it is also true that financial
accounting use data from management accounting, particularly the calculation of costs used to
value certain balance sheet items such as finished product inventories, work in process, self-
produced assets and capitalized (Ram and Pattinson, 2009).
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Therefore, integrated systems generally have much more functionality and can provide more
and better report in following way. Faster and efficient in processing of information by
automatic generation of accounting documents like invoices, cheques and statements of
accounts with larger reduction in cost of hardware, software and maintaining a manual
accounting system. Information can be produced on time and no more manual processing of
data and all the data automatically been posted to several ledgers / accounts and many types of
useful reports can be generated. Finally integrated accounting system reduces the effort, save
the time, improve efficiency and reduce the errors.
Therefore, integrated systems generally have much more functionality and can provide more
and better report in following way.
• Faster and efficient in processing of information by automatic generation of accounting
documents like invoices, cheques and statements of accounts with larger reduction in
cost of hardware, software and maintaining a manual accounting system.
• Information can be produced on time and no more manual processing of data and all
the data automatically been posted to several ledgers / accounts and many types of
useful reports can be generated.
• Finally integrated accounting system reduces the effort, save the time, improve
efficiency and reduce the errors.
1.1.3. Problem Statement.

An integrated accounting system is an information system intended to improve the performance
of accounting functions. Integrated accounting Systems is a tool created to help manage and
control financial transactions while integrating computing and information systems (IT) in the
industry. In addition to image recording, the tracking capabilities of integrated accounting
systems provide greater security as well as data storage and mobility. But advances and
diffusion of technology have opened up opportunities for the production and use of accounting
information from a strategic management perspective. Because of its importance to all
businesses, the implementation of integrated accounting system is very important for small and
medium operators, especially in the face of the uncertainty of a competitive market (Dumitru
et al., 2013)
4
Traditionally, small and medium entrepreneurs have their own documents at hand. This is a
very slow process that requires more time and money. The manual accounting system is also
characterized by the duplication of a large number of books, documents, stationery, recording
of data and, as a rule, the elimination of problems and errors. Karunananda & Jayamaha,
(2011)highlighted this problem by highlighting poor record keeping, ineffective use of
accounting information for financial decision-making, and low quality and reliability of
financial data. Incomplete reports make it difficult to make accurate decisions, as it is an
inconvenience for small and medium-sized businesses and forces the accountant to interpret
them as information.
A company's finance department has contributed significantly to the running of the company
as a whole. The company's financial division is effective and efficient, which results in
adequate resource management to maintain day-to-day operations without interruption
(Dumitru et al., 2013). The successful planning and tight budgetary control mechanism reflect
the effectiveness of fund management. When considering effective fund management system,
financial accounting has been considered a formal and widespread source of information within
organization, as well as to adapting the modern technology company uses a computerized
accounting system up to some extent. But still, most of company’s haven’t proper integrated
accounting system within the organization.
Most of companies use Microsoft excel program for their accounting records. They deal with
these systems independently until the final stage of consolidation of accounting records. This
takes time, often results in entry errors and miscoding of accounting information. This situation
leads to the data loss and mismatch of information. Another main issue that the companies face
because of non-availability of complete integrated accounting system is loss of security and
failure to generate required accounting reports on time.
Therefore “The problem is to be addressed through this study is how to use an integrated
accounting system to achieve higher organizational performance and its impact in Ruhunu
Hospitals (Pvt) Ltd.”
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1.1.4. Study Questions
This study provides a better understanding by filling in the gaps found in previous studies by
answering the following study question,
• How is the Impact of integrated accounting system on organizational performance at
Ruhunu Hospitals (Pvt) Ltd?
• How is the Impact of accounting system quality on organizational performance at
Ruhunu Hospitals (Pvt) Ltd?
• How is the Impact of information quality on organizational performance at Ruhunu
Hospitals (Pvt) Ltd?
1.1.5. Study Objectives

When considering about an accounting system of commonly use in companies, they are unable
to implement one accounting system for whole organization. Therefore, the study will therefore
attempt to identify the impact of integrated accounting system on the organizational
performance at Ruhunu Hospitals (Pvt) Ltd.
1.1.6. Main Objective:

To identify the impact of integrated accounting system on the organizational performance at
Ruhunu Hospitals (Pvt) Ltd.
1.1.7. Sub Objectives:

• To identify the impact of accounting system quality on the organizational performance
at Ruhunu Hospitals (Pvt) Ltd.
• To identify the impact of information quality on the organizational performance at
1.1.8. Significance of the study.

The results of the study will help to identify the gaps within the integrated accounting system
of Ruhunu Hospital (Pvt) Ltd as per the employees' perspective and studier try to provide some
recommendations for the problematic situations in the accounting process. It is also the
studier’s belief that invaluable benefits to management of Ruhunu Hospital (Pvt) Ltd in order
to streamline the processes of accounting systems for the smooth functioning of the finance
6
department and ultimately ensure the enhance of organizational performance. Also, the study
will help the studier to acquire knowledge and understand the techniques of doing study.
1.1.9. Micro and Small Business Owners and Entrepreneurs

To small and medium businesses, the findings of this study are expected to benefits these
businesses by speeding the routine of transactions, timeliness, quick analysis, accuracy and
reporting. Also, with the introduction of new technology and more user-friendly software,
integrated accounting system will reduce the problems in book record keeping practice hence
facilitate decision making of small and medium businesses.
1.1.10. The Government

Further the study findings are expected to provide practical guidance to different sectors of
Government especially the business sector that may help in ensuring that the small and medium
enterprises are growing and performing well at regional and national level through the use of
integrated accounting information system. The Government may benefit in designing policy
framework to enhance development of SME industry. The government may be able to put in
place the right policies that would help in enhancing the growth of micro and small business
sector.
1.1.11. Studiers and other academicians.

The study can also be used as a reference to academicians and other students undertaking same
field on matters patterning to accounting information system. Also, the study will be useful to
the studier since it serves as the partial fulfillment of the requirement for the award of the
Bachelor Degree BSc. in management Accountancy and Finance special of Eastern University.
1.1.12. Scope of the study.

When considering about an accounting system of Ruhunu Hospital (Pvt) Ltd, they are unable
to implement one accounting system for whole organization. Therefore, the study will therefore
attempt to identify the impact of integrated accounting system efficiency on the organizational
performance.
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1.1.13. Chapter organization
Chapter One - This chapter focuses to introduce the topic of the study. And this chapter gives
brief information about the topic. To identify what kind of relationship this chapter presents
study problems, study objectives, scope of study, significance and limitations of the study.
First; identify the study problem and identify the study questions according to the problem.
And related objectives and significance of the study are included in this chapter.
Chapter Two – This chapter describes synopsis of the relevant literature and previous study
work, internationally, regional and Sri Lankan pertaining to the areas of background, theories
and different models, with a summary of previous study findings pertinent to this study.
Chapter Three –This chapter is tried to identify the methodology part of the study.
Methodology is the significant part of the study, because it helps to find the outcome of the
study. This chapter mainly focuses on the conceptual framework, hypotheses and way of
selecting sample and data collection. Furthermore, the methods of analyzing data and
hypothesis which was going to tested through this project.
Chapter Four – This chapter presents the data analysis and discussion. Analyze the data about
the factors influence on adoption of computer-based accounting by using various methods. This
chapter deals with the presentation and analysis of collected data. These data related with the
variables dependent and independent. Through the analysis of data the studier will be able to
achieve the objectives of the project. Therefore, the data presented in this chapter will provide
guidance.
Chapter Five – This chapter explains the conclusion. This chapter specially pointed out the
discussion of findings which obtained from chapter four analysis data via SPSS. Studyer
believes that these results and the relationship developed from the analysis as well as
conclusion derived may relevant to Ruhunu Hospital (Pvt) Ltd. This chapter focuses findings
which were obtained from data analysis, in order to give conclusion by testing hypotheses, then
after propose recommendation.
.
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1.1.14. Chapter Summary
This chapter explains the research study primarily through the introduction, the research
background, the importance of the study, the research problem, the research objectives, the
methodology used for the study, and the organization of the Chapter
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CHAPTER TWO:
LITERATURE REVIEW
2.1. Introduction
The research was intended to assess the impact of integrated accounting system efficiency on
organizational performance of Ruhunu Hospital (Pvt) Ltd. The review of accessible literature
therefore attempted to create whether there is a correlation and impact between Integrated
Accounting System as an Independent variable and Performance of the organization as a
dependent variable. The review particularly measures the efficiency of the integrated
accounting system by focusing on quality of the system and quality of the information. The
review also identified Performance of organization by focusing on individual impact and
organizational impact. The ultimate objective of this review was therefore to examine the
impact of integrated accounting system efficiency on the organizational performance at
Ruhunu Hospital (Pvt) Ltd.
2.2. Theoretical Approaches

2.2.1. Contingency Theory
Contingency theory suggests that an accounting information system should be designed in a
flexible manner so as to consider the environment and organizational structure confronting an
organization. Accounting information systems need to be adapted to the specific results being
considered. In other words, accounting information systems must be structured within an
adaptive framework. The first article in the accounting literature focusing on the urgency of
accounting information systems is "The urgency of designing accounting information systems"
(Miller, 1976).
This article sets the basic framework for the urgency of accounting information systems.
Gordon and Narayanan (1984) concluded that environmental uncertainty is a key factor in
designing management accounting systems among successful firms. A key finding of this study
is that when decision makers see greater environmental uncertainty, they tend to search for
external, non-financial and prior information in addition to internal, financial and post-
information. This final finding is confirmed by several subsequent studies by Gordon and
Narayanan.
10
Although extensively studied in the last two decades, contingency theory has been given
relatively little consideration in terms of the factors that influence the accounting information
systems.
2.2.2. Innovation diffusion theory

Bradford & Florin, (2003) popularized Innovation diffusion theory (IDT) by establishing a
powerful model which has been vastly used to determine factors influencing different type of
computer technology and IT adoption including general IT adoption, Electronic Data
Interchange (EDI) and web service standards adoption, IT diffusion patterns and the
relationship between IT adoption and firms’ competitive advantage in both developed and
developing countries. Fulk, J., Schmitz, J. & Steinfield C., (1990) in the diffusion of innovation
theory sees innovations as being communicated through certain channels over time and within
a particular social system where individuals are seen as possessing different degrees of
willingness to adopt innovations and thus it is generally observed that the portion of the
population adopting an innovation is approximately normally distributed over time when
plotted over a length of time representing various categories of adopters namely innovators,
early adopters, early majority, late majority and laggards (Gable & Raman, 1992). Innovators
are the first individuals to adopt an innovation. Early adopters are the second fastest category
of individuals who adopt an innovation. These individuals have the highest degree of opinion
leadership among the other adopter categories. Early Majority Individuals adopt an innovation
after a varying degree of time. This time of adoption is significantly longer than the innovators
and early adopters. Late Majority Individuals will adopt an innovation after the average
member of the society. These individuals approach an innovation with a high degree of
scepticism. Laggards are the last to adopt an innovation. Unlike some of the previous
categories, individuals in this category show little to no opinion leadership.
2.2.3. Decomposed Theory of Planned Behaviour

Decomposed Theory of Planned Behavior (DTPB) was formulated through combination of
both Technology Acceptance Model (TAM) (Wang and Huynh, 2013) and Theory of Planned
Behavior (TPB) (Ajzen, 1988) which was intended for providing better understanding of
behavioral intention by concentrating on the factors that are likely to impact systems use. TAM
is an information systems theory that models how users come to accept and use a technology.
The model suggests that when users are presented with a new technology, a number of factors
11
influence their decision about how and when they will use it, notably include Perceived
Usefulness (PU) and Perceived Ease-Of-Use (PEOU).Wang and Huynh, (2013), asserted that
PEOU and PU influences in a significant way the attitude of an individual through two main
mechanisms namely self-efficacy and instrumentality.
The DTPP model shows that the approach to technology has three dimensions of advantage,
complexity and applicability. Beltrán, (2010) observe that the comparative advantage
outweighs the advantages of a new invention over other existing alternatives. Such benefits
may include economic benefits, image enhancement, convenience and satisfaction. In the
context of this study, the computerized accounting system can be considered an invention and
has advantages over manual systems. The computerized system eliminates workload and runs
faster and reduces the risk of errors. Adaptation of an invention is the ability to adapt to existing
values, past experience and current needs (Sedera, D. Gable, G. & Chan T., 2003). Therefore,
the willingness of SMEs to adopt a computerized accounting system may affect current
requirements such as faster processing of customer revenue. In addition, the price of the system
relative to the available resources is similar to the current values. Depending on the resources
available and the competitive needs of the organization, the cost of the organization will affect
the resource allocation for adopting it.
This study was guided by three theories; Emergency Theory, Innovation Expansion Theory
and Behavior Theory. The emergency theory explains that the accounting information system
must be designed flexibly taking into account the environment and organizational structure that
a company may face. On the other hand, the breadth of innovation explains the factors that
affect different types of computer technology and IT standards. Finally, the distorted theory of
planned behavior explains the approach to technology related to the organizational
environment. (Saleh Al-Dhaafri et al., 2014a)
2.2.4. Integrated Accounting System.

According to the Wang, (2003), collected empirical data from 100 SMEs in North Central
Province and used bivariate and factor analysis for further analysis. The literature identified
factors for cost, business size, infrastructure, government support, administrative support,
external environment, and perceived ease of use. The survey found that 40% of small
businesses use CAS to maintain accounting records. There are no significant effects from
12
demographic variables on CAS use. Only the size of the business, the cost of the business, and
the external environment has a significant effect on the use of CAS. Therefore, developers need
to reduce CAS software development costs by offering SMEs a variety of options. Also, better
understanding of CAS's competitive advantage over small and medium-sized businesses can
help embrace new technologies.
Eom & Stapleton, (2011) aimed to investigate SME practice of CAS and to identify the factor
affecting the adoption among SMEs in Melaka in Malaysia. This study reveals that CAS
adoption rate in SMEs in Melaka is high. Results from the analysis also shown the significant
of independent variables and proved the relationships have been substantiated to the dependent
variable which contribute to the usage of CAS adoption between SMEs in Melaka. The findings
indicate that CEO innovativeness; perceive ease of use and business competitiveness
negatively correlated to the adoption of CAS. Results reveals that only perceive usefulness are
significantly positive correlated to CAS adoption. Therefore, it can be deduced that adoption
of CAS among SMEs in Melaka is caused by its usefulness. The findings reveal that types of
business and business location influence the adoption of CAS. However, size (paid up capital,
sales turnover and number of employee) does not influence the adopter. Results also indicate
that CEO literacy on ICT, accounting and CAS has influence the responded CEO to adopt CAS
in their business. However, the advantages by using the accounting systems software were not
fully utilized by CAS adopters.
Sedera et al., (2003) examined how small business owners in Central Ohio come to accept and
use computerized accounting systems (CAS). Results showed a positive correlation between
perceived ease of use, perceived usefulness, and the intent to adopt CAS; therefore, the null
hypothesis was rejected. The model predicted about 71% of the variations in intent to adopt
CAS.
Using the portion of the sample where small business owners had not yet adopted CAS (n =
34), the model was able to predict about 63% of the variation, and in the portion where small
business owners had already adopted CAS (n = 37), the model was able to predict about 70%
of the variation. However, when splitting the sample between small businesses whose owners
had already adopted CAS and those who had not yet adopted CAS, importance of ease of use
and usefulness changed. Usefulness is more important to non-adopters and ease of use is more
important for continued use. The implication for social change is the potential to reduce
13
business failures. The study showed that 83% of small businesses over 5 years old currently
use a CAS and only 56% under 5 years old use a CAS. Society could benefit from an increase
in the number of successful small businesses, which would then contribute to economic
expansion.
According to Saleh Al-Dhaafri, H., Kaid Al-Swidi, A. & Yeop, Abdullah O. (2014b) the impact
of using computerized accounting systems (CAS) in financial reporting among SME in the
South Eastern region in Sri Lanka. The study established that computerized accounting system
had a great impact on quality of financial reports.
The findings showed a strong significant positive relationship between the variables which
implied that computerized accounting system and financial reporting among SMEs in South
Eastern region of Sri Lanka. Finally, paper concluded that understanding the impact of using
computerized accounting systems (CAS) in financial reporting is very significant to the small
medium industries can make use of these information to advance appropriate strategies to
present financial reports successfully in future (Eom and Stapleton, 2011)
Stolowy and Touron, (1998) attempted to examine the usage of computerized accounting
system with the focus on accounting software usage in small and medium companies. Research
covered 4 areas, which are the basis of requirements and selection, maintaining and impact of
the system on the performance of small and medium companies. The results showed that 97.7%
of SMEs use computerizes accounting system, 88% of them uses standard software while 12%
uses customized software. Study also showed that the SMEs rate the features of the system,
stressing on the ease of the use software as their main criteria of selection. One important
finding was that SMEs do not rate cost as important factor, but rather on the features of the
software itself. Finally, SMEs rate the main aspect of computerized accounting system on their
performance as easier date retrieval, as compared to the manual accounting.
This research analysed the Computerized Accounting System Usage by Small & Medium Scale
Enterprises in Sri Lanka with reference to Colombo district. It is found that majority of the
SMEs are using computerized accounting systems but not the best software available in the
market. Also, there is a relationship in computerized accounting systems and the level of
education of business owner and the accountant, number of accounting staff and the
organizational structure. It is recommended to guide and carrying out trainings for SMEs by
14
the government to adopt Computerized the SMEs with the technology and the boost the
performance of the SMEs in Sri Lanka.
Saleh Al-Dhaafri et al., (2014b) examine evaluated the adoption of the Accounting Information
Systems (AIS) among business banks in Nigeria and the adoption consequences on their
financial performance. The look at located that business banks in Nigeria adopted and use AIS
in supplying their offerings to their clients and the level of usage is incredibly excessive. The
findings indicated that AIS adoption has an effective giant with all the performance indicators
(ROCE, ROTA, GPM and NOP) with α<zero.05. Therefore, the study recommends that
Central Bank of Nigeria should continue to provide aid for AIS adoption with the aid of
commercial banks in Nigeria, commercial banks have to adopt more on AIS so that you can
gain more of their performance and additionally they ought to provide a platform for regular
training and improvement of staffs, so that you can keep them abreast in AIS global.
Stolowy and Touron, (1998) observes the comparative evaluation of automated accounting
system and guide accounting gadget of quoted Microfinance Banks in Nigeria from 2006-2015.
Three hypotheses were formulated in keeping with objectives of the study. Ex-publish facto
studies layout changed into followed and the statistics for the examiner have been obtained
from truth books, annual reviews and account of the quoted Microfinance banks underneath
look at. Paired sample T- take a look at become used to check the Hypotheses, at 5% vast
degree with resource of SPSS version 22 statistical software program. Findings confirmed that
automated accounting device has an advantageous impact on the stated profitability of banks
greater than manual machine of accounting. Based on those findings, the look at recommends
amongst others that Microfinance banks must enforce automatic accounting system than the
manual accounting machine as it has more fantastic effect at the profitability stage of the banks.
Olatokun and Bankole, (1970) examined the adoption of e-business technologies by SMEs in
Ibadan a metropolitan city in South West Nigeria. It aimed at finding out the factors that
promote and inhibit the adoption of e-business technologies, the kinds of e-business
technologies adopted and used and their extent of use. Results showed that majority of the
firms were smaller firms with 0-9 employees and not less than 1-5 years of establishment. The
respondents cited perceived benefits as the major factor for adopting e-business technologies
in their firms while 83.4% of non-adopters agreed that low capital base was the major reason
inhibiting them from adoption. Hundred percent of the firms each have adopted internet
15
technology and electronic mail which are daily used by all the firms. The major service
provided with the use of these technologies was e-mail to communicate with customers and
suppliers. On the benefit and challenges of e-business, all the organizations affirmed that e-
business have benefited them in the sharing and exchange of information and improving market
share. About 96.7% of them affirmed inadequate technical manpower as the major challenge.
The results clearly indicate the necessity to provide support to SMEs to enable them to
successfully adopt and use e-business technologies. The results have implications not only for
managers of SMEs but also for government bodies in developing countries such as Nigeria.
2.3. Review of Empirical Studies

Under these section empirical studies related to the Impact of integrated accounting system on
organizational performance at Ruhunu Hospitals (Pvt) Ltd are discussed.
2.3.1. Integrated Accounting System

Information technology (IT) has been viewed by enterprises worldwide as an essential tool in
improving efficiency and competitiveness. In the last decade, many companies have turned to
information systems, usually known as integrated information systems or enterprise resource
planning systems to respond to competitive pressures and market opportunities and integrated
information systems that support value added processes of enterprises. Based on modular
software structure and centralized data base. (Bingi et al., 1999)
System
Usage
Quality
& Individual Organizational
Information Satisfaction Impact Impact
Quality
Figure 2.1 - Information System Success Model

Source: (Daoud and Triki, 2013)
16
Daoud & Triki, (2013) proposed that success of information system is determined by
information system quality (technical quality of the system) and the output quality of the
system (quality of the information produced). These dimensions influence to the use level and
user satisfaction. As a result, user attitude (Individual impact) and organizational performance
(Organizational impact) are influenced. Mushayt (2000) also showed that this model is valid
and reliable in an accounting system context.
2.3.2. System Quality & Information Quality

According to the IS model of Daoud and Triki, (2013), system quality and information quality
are depicted as affecting both system use and user satisfaction. System quality is concerned
with the performance characteristics of the Integrated Information systems, including
reliability, flexibility, ease of use, and response time Information quality is concerned with
timeliness, relevance, and usefulness of information generated by an information system.
System usage is the degree of user recipient consumption of the output of an information
system. User satisfaction is the recipient response to the use of the outcomes of an information
system. There is quite strong support in the literature both theoretical and empirical; the results
indicated that system quality and information quality positively affected both system use and
user satisfaction
After reviewing and evaluating this debate, decided to add service quality in their updated IS
success model stating that „the changes in the role of IS over the last decade argue for a separate
variable – the service quality dimension (p. 18). After reviewing and evaluating this debate,
decided to add service quality in their updated IS success model stating that „the changes in
the role of IS over the last decade argue for a separate variable – the service quality dimension
(p. 18). (Daoud and Triki, 2013)
Torkzadeh and Doll, (1999) examined the full model, but found four paths in the original IS
success model insignificant (system quality-use, information quality-use, intended use-
individual impact, and individual impact- organizational impact). In addition, Saeed and
Abdinnour-Helm, (2008) and Sedera et al., (2004) stated that system quality and information
quality are two major characteristics of information systems.
17
(Sedera et al., 2004) also recently tested several success models, including the Dand M and
Seddon models, against empirical data and determined that the model provided the best fit for
measuring enterprise systems success. (DeLone and McLean, 2003)
(Sedera et al., 2004)have developed and validated a multidimensional IS success instrument

for enterprise systems. This success instrument has been applied and tested in three separate
studies. It consists of four dimensions – system quality, information quality, individual impact,
and organizational impact – and 27 item measures: nine measures of system quality, six
measures of information quality, four measures of individual impact, and eight measures of
organizational impact.
According to (Beltrán, 2010), the ERP system quality consists of its flexibility, ease of use,
reliability, short response time and useful specific functions. Zhang, Z., Lee, M., Huang, P.,
Zhang, L., & Huang, X. (2005) presented the characteristics of flexibility, ease of use, ease
of learning and integration to define the quality of the ERP system.
Zhang et al., (2005) also showed that the perceptions of users regarding the usability of
integrated system are crucial when the system starts to generate profits.
System quality – The desirable characteristics of an information system. Flexibility, system

reliability, and ease of learning, as well as system features of intuitiveness, sophistication,
flexibility, and response times. Beltrán, (2010) predicted the existence of an effect of system
quality on firm performance and verified that the ease of use, considered as one dimension of
the integrated system quality, has a significant effect on improving performance.
Information quality – the desirable characteristics of the system outputs; that is, management
reports and Web pages. For example: relevance, understandability, accuracy, conciseness,
completeness, understandability, currency, timeliness, and usability. In a highly competitive
global business environment, firms seek to improve or maintain their competitiveness by using
information systems to improve customer service, shorten cycle times, and reduce cost.
Integrated systems provide many benefits to companies so they can meet changing expectations
by providing accurate, timely, and integrated information to improve decision making (Trott
and Hoecht, 2004)
18
Wang, (2003) stated that the provision of extensive information by AIS encourages leaders
operating under conditions of intense competition to request this information and to use it to
increase further the chances of success of their organizations. In addition, fast and frequent
information helps executives make appropriate decisions, seize profitable opportunities and
improve their firm performance.
Hendricks, K., Singhal, V. & Stratman, J. (2007) argued that the reports prepared by the ERP
system allow managers to have a clearer vision of the performance of each department of the
company. These reports can therefore be used to identify the improvements needed and take
advantage of market opportunities. Ismail and King, (2007) demonstrated that extended,
timely, frequent, aggregated and integrated accounting information should be particularly
useful for managers to enable them to respond quickly to changing environmental and market
demands. Based on this information, officers will request the use of more advanced accounting
practices.
2.3.3. Individual Impact & Organizational Impact

Although Davis, (2009) depicted a bidirectional effect between system use and user
satisfaction, in this study, only user satisfaction that affects system use was considered because
a higher level of user satisfaction makes the user rely on the system frequently (Umble et al.,
2003). In an application of the IS success model to computer systems acceptance, Igbaria and
Tan, (1997) found that users with higher satisfaction used the system very frequently.
Gelderman, (1998) investigated the validity of usage and user satisfaction for the success of
information systems. The results indicated that user satisfaction had a significant relationship
with system usage.
DeLone and McLean, (2003) found that end-user computing satisfaction has significant
correlation with usage pattern. Umble et al., (2003) partially tested DeLone and McLean‟s IS
success model. They found that there was strong support for the positive relationship between
user satisfaction and system use. According to the Torkzadeh and Doll, (1999) individual
impact is concerned with the effect of information on the behaviour of the user and individual
impact was measured in terms of job performance, individual productivity, capability of
problem identification, and decision-making effectiveness.
19
Igbaria and Tan, (1997) reported a positive effect of system usage and user satisfaction on the
impact of end-user jobs for client/server systems success and found that user satisfaction and
system usage are important factors affecting individual impact. The study of Torkzadeh and
Doll, (1999) indicated that user satisfaction has significant correlation with the four dimensions
of impact scale: task productivity, task innovation, customer satisfaction, and management
control.
In a three-year longitudinal study surveyed by Jurison, (1996) to evaluate the relationship

between user productivity and organizational effectiveness of an integrated office information
system, the results indicated that individual benefits (individual impact) occur first, then
improvements in organizational effectiveness (organizational impact). Zhang et al., (2005)
examined the relationships between IT investment and performance impact measures of the
retail industry.
The result indicated that improvement in the work environment has a significant positive
relationship with organizational impact. They argued that improvements in the work
environment can motivate employees to work harder and smarter, thereby resulting in increased
effectiveness and productivity.
Integrated systems have significant impact on organizational capabilities and indicate that
systems are beneficial to achieve strategic, organizational, management, operational, and IT
infrastructure goals. (Shang and Seddon, 2002; Tomasini and van Wassenhove, 2009)
According to the Al-Mushayt, (2000) integrated systems enable more accurate and timely
information coordination, which reduces inventory and administrative costs and increases
responsiveness to market demands. Reducing buffer inventory and lead times increase the
efficiency and flexibility of the firm (de Lange et al., 2003),
Zhang et al., (2005) mentioned that accurate and fast information accessibility helps employees
work together across functions. They can share resources, ideas, and data, informally work
together as a team, and achieve goals collectively with other employees from different
departments. Implementation of an integrated system also nurtures the establishment of
backbone data warehouses so that management can have fast access to accurate information
for decision making and control. Process improvement is enhanced by the implementation of
integrated systems. Those systems integrate business processes and information technologies
20
into a synchronized suite of procedures, applications, and metrics that span intra- and inter-
firm boundaries.
2.4. Literature Review Summary

Literature review is previous scholars which have been written relating to the current study.
Literature review is the basis to any research. This chapter includes the literature on conceptual
framework of Integrated Accounting System (System Quality, Information Quality) impact on
Organizational Performance - Sri Lanka, previous journal articles and academic thesis was
adapted to conduct this chapter.
Authors Year Definitions

Gordon & (1976) The urgency of designing accounting information systems
Miller
Albert Bandura (2009) Innovation diffusion theory (IDT) by establishing a powerful
model which has been vastly used to determine factors
influencing different type of computer technology and IT
adoption including general IT adoption
Rogers (1955) Adaptation of an invention is the ability to adapt to existing
values, past experience and current needs
Bingi P, (1999) Information technology (IT) has been viewed byEnterprises
Sharma, M & worldwide as an essential tool in improving efficiency and
Godla, J competitiveness. In the last decade, many companies have
turned to information systems, usually known as integrated
information systems or enterprise resource planning systems to
respond to competitive pressures and market opportunities
DeLone and (1992) system quality and information quality are depicted as affecting
McLean both system use and user satisfaction.
Zhang et al. (2005) ERP system quality consists of its flexibility, ease of use,
reliability, short response time and useful specific functions
21
2.5. Chapter summary
Internationally there were so many researches provided more details about the related topic and
locally as well. From those we are able to explore so many information and reveal the
relatedness of the topic. The evocation of computerized accounting has been pointed out with
the involvement of ICT in to the accounting & so far it reveals a long journey. As per the
literature theoretically contingency theory, innovation diffusion theory & decomposed theory
of planned behavior can be identically bind with this and empirical aspects also appearing so
much of proofs about the relatedness of the variables. This chapter describes further more on
the above at the content
22
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1. Introduction
This chapter addresses the research design, data collection methods, population, sample, types
of collected data. Furthermore, it contains the data presentation and analysis methods which
were used in this study.
3.2. Research Site

Ruhunu Hospitals (Pvt) Ltd is a fully fledged private hospital which is located in the medical
hub of the Southern Province. They initiated their operations on the 1st of February 1995 and
today they have become the top in many aspects in the healthcare industry in Southern
Province. They are committed in providing high quality medical care that is extensive and
convenient to their valued customers. A large number of people have benefited from their
services since the initiation of the hospital.
Finance Division of Ruhunu Hospitals (Pvt) Ltd plays a most important role when dealing with
the competitiveness of the business environment. Preparation of all the accounting reports and
takes important management decision based on such reports is their major task. In order to
achieving this purpose, they simplify their accounting process through the integrated
accounting system which use accounting software called mitfin. Through this system all the
accounts are integrated and only a single set of accounts are maintained.
But some sections which are under the Finance Division of Ruhunu Hospitals (Pvt) Ltd, still
use Microsoft excel program for their accounting activities. Therefore, even though they
integrated their accounting system whole organization still failure to adapt this system.
3.3. Conceptualization of variables

The present study aimed to identify Impact of Integrated Accounting System on Organizational
Performance of Ruhunu Hospitals (Pvt) Ltd. Therefore, the researcher has to decide which
variables are used for measure the Impact of Integrated Accounting System on Organizational
Performance. Different variables can be seen in empirical evidence that relates to this study. In
this study. Therefore, variable of Integrated Accounting System is considered as the dependent
23
variable. And variables of Organizational Performance are considered as the independent
variable. Figure 3.1 presents the conceptual framework proposed for the current study.
Figure 3.1: Conceptual Framework
Integrated Accounting Organizational Performance

System (Independent Variable) (Dependent Variable)
System Quality
▪ Flexibility Performance of the organization
▪ Ease to use ▪ Job performance
▪ Reliability ▪ Individual productivity
▪ Short response time ▪ Capability of problem identification

▪ Decision making effectiveness
▪ Internal data transmission time
Information Quality ▪ Response time to environmental
▪ Timeliness
changes
▪ Usefulness ▪ Frequency of interaction across
▪ Relevance
departments.
Figure 3.1 – Conceptual Framework

Source: Author, Sample Survey, 2022
3.4. Development of Hypothesis

A hypothesis can be defined as a logically conjectured relationship between two or more
variables expressed in the form of a testable statement. Relationships were conjectured on the
basis of the network of associations established in the theoretical framework formulated for the
research study.
24
Hypothesis development is very important because acceptance or rejection of hypothesis show
the significance of the study. The hypotheses are developing based on theoretical framework
and literature review.
H10 There is no impact of the system quality on the organizational performance

H11 There is an impact of system quality on the organizational performance.
.
H20 There is no impact of information quality on the organizational performance.
H21 There is an impact of information Quality on the organizational performance.
3.5. Operationalization
Table 3.1 – Operationalization of Variables
Variable Dimension Dimension Measurement Question no

• Flexibility
System • Ease to use Five. Likert
Q1-Q10
Quality • Reliability scale
Integrated
• Short response time
Accounting
System • Usefulness
Information Five. Likert
• Timeliness Q11-Q16
Quality scale
• Relevance
• Job performance
• Individual
productivity
• Capability of
problem
identification
• Decision making
Five. Likert
effectiveness Q17-Q34
Performance of the scale
organization • Internal data
transmission time
• Response time to
environmental
changes
• Frequency of
interaction across
departments
25
3.6. Research Design
There are three types of research design. Such as, descriptive research, casual research and
exploratory research. Research design, which guides the data collection and analysis of the
research study. Research design is a frame work and it specifies the information to be collected,
source of data. This study shows the variety of possible strategies how to identify the impact
of Integrated Accounting System as an Independent variable on Performance of the
organization as a dependent variable. Data will be collecting on each independent variable by
using a questionnaire from employees in financial division at Ruhunu Hospitals (Pvt) Ltd.
3.7. Population
This study addresses the impact of integrated accounting system efficiency on the performance
of the Ruhunu Hospitals (Pvt) Ltd. Management and staff survey was conducted to investigate
the research problem. Therefore, the population was 95 of the Senior Management and Staff in
3.8. Sample Design

The researcher used the convenience sampling method for selecting the sample of senior
management and staff of the Finance Division of Ruhunu Hospitals (Pvt) Ltd. Sample of the
study consist of 5 respondents from management, 30 from staff and 5 from trainees.
However, greater emphasis was laid on capturing members in Finance, HR sections. Because
mostly Integrated Accounting System is used by them.
3.9. Sample Technique

Researcher use Convenience Sampling method for this. Researchers use various sampling
techniques in situations where there are large populations. In most cases, testing the entire
community is practically impossible because they are not easy to reach. Researchers use
convenience sampling in situations where additional inputs are not necessary for the principal
research. There are no criteria required to be a part of this sample. Thus, it becomes incredibly
simplified to include elements in this sample. All components of the population are eligible
and dependent on the researcher’s proximity to get involved in the sample.
26
The researcher chooses members merely based on proximity and doesn’t consider whether they
represent the entire population or not. Using this technique, they can observe habits, opinions,
and viewpoints in the easiest possible manner.
3.10. Sample Framework

In statistics, a sampling frame is the source material or device from which a sample is drawn.
It is a list of all those within a population who can be sampled, and may include individuals,
households or institutions. Importance of the sampling frame is stressed by Jessen and Salant
and Dillman.(1994)
Table 3.2 – Sample Framework
Position Total Employees Selected Sample

Executives 15 5
Office Staff 65 30
Trainees 20 5
Total 100 40
3.11. Method of Data Analysis and Presentation

3.11.1. Data Collection
Primary Data
In this research, mainly primary data will be collected by the researcher is used. The data will
be collected through pre- prepared questionnaires based on the relevance of each question in
part three, five-point Likert scale is weighted, and two types of weights will be used since there
are both positive statements and negative statements in the questionnaire.
3.11.2. Equipment validity and reliability

The measurements used in this study were adapted by previous researchers, tested and
validated for high validity and reliability. But the reliability and validity of these measures
needs to be reviewed to ensure they are accurate in the Sri Lankan context.
27
Validity
Validity explains how the collected data covers the validation area consider the validity of the
research data. (Ghauri et al., 2020) There are four main types of validity measurements: content
validity, interface validity, design validity, and criteria validity. Content fidelity refers to all
questions that can be asked about the content or skill of the instrument, and the score obtained
from those questions (Croswell, 2005). Facial validity is considered the primary and minimum
measure of content validity, but it is determined after the test is completed.
Content fidelity verifies that the tool adequately covers all content that should be relevant to a
variable. In other words, does the device cover the entire area associated with the variable, or
is it meant to be measured? Content validity is simply the degree to which a test item represents
the size of the entire domain that is expected to be measured (Marcus & Smith, 2012). The
validity of the criteria is used to predict future or current activity.
This relates to another interesting measure of test results (Burns et al., 2017). It deals with the
relationship between scale scores and precise measurable criteria. Burns et al., 2017 examines
how people change the scale according to a criterion that they should predict (Pallant, 2011)
In this study, the researcher used content validity. Elements, parameters and indicators were
followed to ensure the credibility of the research content, guaranteed by the researcher through
a thorough review of the literature, including all variables.
Reliability
Reliability is a measure of a phenomenon that provides consistent and reliable information
(Carmines and Cellar, 1979). It is also associated with the possibility of relapse. The reliability
check is important because it refers to the compatibility between the parts of the measuring
instrument (Huck, 2007).
3.11.3. Regression
Retrograde analysis is a statistical measure used to measure the relationship between two or
more variables. It is used to determine how strongly one dependent variable is related to a
number of other dependent variables. Regression analysis helps you understand how the mean
of the dependent variable changes when any of the explanatory variables change, while the
other explanatory variables remain constant. Using retrospective analysis, the researcher
28
continues to determine the relationship between the independent variable and the dependent
variable.
3.11.4. R-square and prepared R-squares

Both R-squared and corrected R-squared indicate that the percentage of the dependent variable
can be collectively described as independent variables. R2 assumes that each variable explains
the variance of the dependent variable. The R2 set describes the percentage of the variable
because only the explanatory variables affect the dependent variable.
3.11.5. Variable coefficients

Coefficients of other variables describe the variance of the independent variables when the
independent value changes by one. The significant F value can be used to measure the
correlation of the dependency variable for each independent variable. The significant F value
of the variable must be less than 0.05 to detect a significant 95% confidence level.
3.11.6. Model development

The goal of the researcher is to identify the possible associations between the Integrated
Accounting System and Organizational Performance. The relationship between these two
variables can be identified as follows.
OP = f (IAS)
As there are many factors which can contribute to operational performance, multiple regression
model was selected as the method of analysis to evaluate the hypothesis. Accordingly, below
regression model was developed to evaluate the hypothesis.
OP = α + β1 SQ + β2 IQ + ε
Where,
OP = Organizational Performance
𝛼 = Constant Term
𝛽 = Coefficient of the independent variables
SQ = System Quality
IQ = Information Quality
29
3.12. Chapter summary
The present chapter mainly focused the research methodology used in this study. Under this
chapter, the researcher discussed about conceptual framework, operationalization of variables,
development of hypotheses, research design, population, sample and sampling procedures, data
collection methods, methods of data analysis and finally discussed chapter summary. Next
chapter researcher will discuss about the data analysis and presentation of the study.
30
CHAPTER FOUR:
DATA PRESENTATION AND ANALYSIS
4.1. Introduction
This chapter begins with the discussion of data screening followed by analysis of results. The
data analysis includes the descriptive analysis of demographic information, then reliability and
validity of the scales are examined in this chapter. The next section was discussed about
research information and individual hypothesis was tested by using Pearson correlation and
multiple regression. Finally, the results of the study were presented.
4.2. Data Screening

Forty (40) questionnaires were issued directly to the respondents and those questionnaires were
taken to the Microsoft Excel for preliminary analysis. Therefore, the valid sample was 40. The
filled-up questionnaires were entered into SPSS version 26.0 for data analysis. It was confirmed
that there were no missing values. As a result, the researcher used the data for the data analysis.
4.3. Data collection

The self-administered questionnaires were issued to selected employees at managerial level
from Ruhunu Hospitals (Pvt) Ltd. The respondents from companies were selected using the
stratified random sampling method. Permission was taken from the Management of the
company. Thus, questionnaires were issued as google form to the employees. The reminders
were done through telephone calls. Table 4.1 presents the summary of Demographic
Characteristics.
31
4.4. Demographic Information
The demographic information in Part I of the questionnaire was analysed through the
descriptive statistics using SPSS version 26.0.
Gender
Male
32%
Female
68%
Figure 4.1 - Gender characteristics of respondents

Figure 4.1 above reveals that 32% of the respondents were males and 68% were female. This
could indicate that there are still low levels of employment of males in Ruhunu Hospitals (Pvt)
Ltd. The findings represent the views of the two gender groups about integrated accounting
system efficiency and organizational performance. This was necessary for the study to get a
balanced picture of the respondents‟ views.
Age
36-45
5%
26-35
13%
18-25
82%
Figure 4.2 - Age Group of the respondents

32
From the description above it is clearly evident that the majority of the respondents are in the
age bracket of between 18-25, followed by 26-35 and 36-45 the orders of 82%, 13%, and 5%
respectively. It can therefore be concluded that the majority of the respondents are in the most
productive age brackets of their life and are reasonably experienced. (Assuming that an
average Sri Lankans starts work at the age of 23 years).
Experience at Organization
5-8 years
8%
1-4 years
30%
Less than 1 year
62%
Less than 1 year 1-4 years 5-8 years
Figure 4.3 – Working Experience of Employees

In table above, it can be revealed that majority of respondents have worked in the Institution
for the period less than 8 years (62%), followed by year 1-4 (30%), and 5-8 years (8%).
Experience on computerized working environment

Over 15
6 – 10 years 3%
10%
1 – 5 years
22%
Less than 1 year
65%
Less than 1 year 1 – 5 years 6 – 10 years Over 15
Figure 4.4 -Work done by the employees within computerized working environment
According to the above table, it describes percentage of work done by the employees in the
computerized working environment. From the staff in the finance division, 65% of employees
33
possesses less than one-year activities in a computerized working environment. 22% of
employees possesses 1 to 5 years while 10% and 3% of employees possess 6 to 10 years of
experience and over 10 years’ experience respectively.
4.5. Reliability
The data collected was analysed using SPSS version 26.0 and excel. The reliability and validity
test results of this study are discussed below.
In order to validate the reliability requirements in this study, from the total sample, 40
respondents were selected on the basis of stratified random sampling and the collected data
through questionnaire method and it ensured the reliability alpha value in accordance with
literature. This study focused on satisfying the requirements of reliability in the beginning
phrase. The reliability of the all variables is greater than the accepted minimum level 0.07. If
the corresponding alpha value of given set of question, less than 0.6 are considered to be poor,
those in the 0.7 range acceptable and those over 0.8 good. (Sekaran & Bougie, 2010). The
reliability of a variable can lie in between 0 to 1. 0 indicates that there is no reliability or
variables are unrelated and 1 indicates that there is very high reliability or the variables overlap
each other. A rule of thumb is α ≥ .70 (Hair et al., 2003) but even a value of .60 is also
acceptable (Dunn et al., 1994).
In this study Cronbach’s Alpha was used to test the reliability of the measures used in the
instrument. Cronbach alpha was intended to measure the internal consistency and reliability of
the instrument. The Cronbach alpha indicated for all variables as 0.782 and shown in Table 4.2
Therefore, it ensured that internal consistencies among the items were reliable.
Table 4.1 – Reliability Statistics
Cronbach's Alpha N of Items

0.782 3
34
4.6. Analysis of Research Information
4.6.1. Normality Test of Variables
Normality is a measure of how well an observed distribution approximates to a normal
distribution (Fitrianto & Chin,2016). According to Jason (2010) stated that data transformation
is used for improving the normality of the observed distribution and equalizing variance to
meet the normality assumption while preparing statistical analyses since the interpretation and
inferences are not valid if the normality assumption is violated. To make sure that this
assumption is valid or not, the residuals generated out of the regression model is plotted against
the fitted values of the dependent variables. If this curve is like bell shaped distribution it can
be concluded that the disturbance term is normally distributed with mean zero and constant
variance one (i.e., N~ (0, 1)). In this study, most of the variables are found to be normally
distributed, the variables that are not normally distributed were transformed to logarithmic
form, and the disturbance term becomes normally distributed.
4.6.2. Descriptive Analysis

Table 4.03 presents the minimum value, maximum value, mean, and the standard deviation of
all variables. All four variables: System Quality, Information Quality and Performance of
Organization showed higher levels of mean values.
A descriptive statistic is a summary statistic that quantitatively describes or summarizes
features from a collection of information, while descriptive statistics is the process of using and
analysing those statistics. The descriptive statistics summarized in Table 4.3 are a collection
Descriptive statistic, which summarize a particular data set, which could be either the total
population or sample. Descriptive statistics can be divided into measures of central tendency
and measures of variability, or spread. Measures of central tendency comprise the mean,
median and mode, whereas measures of variability comprise the standard deviation or variance,
the minimum and maximum variables of the entire independent, dependent variables to identify
the behaviour of entire variables of the study.
The mean value is the sum of the observations divided by the total number of observations.
The median is the middle value of the total observation. The standard deviation is the squared
root of the variance and furthermore, it shows how close the data is to the mean. The variance
describes the spreading of the data from the mean. It is the simple mean of the squared distance
from the mean. Count (N in the table) denotes to the number of observations per variable. The
range is also an additional measure of dispersion. It is the difference between the largest and
35
smallest values, max minus min. Min is the lowest value in the variable. Max is the largest
value in the variable. According to Univariate analysis, Decision Criteria, (1.0 ≤ X ≤ 2.5)
indicate low level of attributes with the study, (2.5 < X ≤ 3.5) mentioned moderate level
attributes, and (3.5 < Xi ≤ 5.0) indicate high level of attributes of variables which measured
using five points Likert scale whereas 1 demonstrates “Strongly Disagree”, 5 demonstrates
“Strongly Agree”.
Table 4.2 – Descriptive Statistics
N Minimum Maximum Mean Std. Deviation

System Quality 51 2.75 5.00 3.9853 .55094
Information Quality 51 3.00 5.00 3.9951 .54656
Performance of
51 2.25 5.00 4.0049 .60102
Organization
Valid N (listwise) 51
According to the table 4.2, dependent variables of the study show a high level of attributes
according to univariate studies.
• System quality ranges from a minimum of 2.75 to a maximum of 5 and it has a mean
value of 3.9853 which indicate a high level of system quality.
• Information quality ranges from a minimum of 3 to a maximum of 5 and it has a mean
value of 3.9951 which indicates a high level of information quality.
According to the table 4.2, dependent variable of the study “Performance of the Organization”,
ranges from a minimum of 2.25 to a maximum of 5 and it has a mean value of 4.0049 which
indicates a high level of performance of the organization.
36
4.7. Correlations of all variables
Table 4.3 - Correlations
Performance
System Information
of
Quality Quality
Organization
Pearson
1 .697** .699**
Correlation
System Quality
Sig. (2-tailed) .000 .000
N 51 51 51
Pearson
.697** 1 .734**
Correlation
Information Quality
Sig. (2-tailed) .000 .000
N 51 51 51
Pearson
.699** .734** 1
Performance of Correlation
Organization Sig. (2-tailed) .000 .000
N 51 51 51
**. Correlation is significant at the 0.01 level (2-tailed).

Pearson correlation has use to check the hypothesis. According to results of correlation tests as
shown in the Table 4.3, following relationships can be observed,
• Correlation between System Quality and Performance of Organization is 0.699. It
indicates that there is a moderately positive correlation between two variables. As the
significant value (0.000) is lower than the desired level of significance (P < 0.01), there
is a significant positive correlation between System Quality and Performance of
Organization. This statistical evidence based on the 99% confidence level.
• Correlation between Information Quality and Performance of Organization is 0.734. It
indicates that there is a moderately positive correlation between two variables. As the
significant value (0.000) is lower than the desired level of significance (P < 0.01), there
is a significant positive correlation between System Quality and Performance of
Organization. This statistical evidence based on the 99% confidence level.
• Furthermore, the connection between system quality and information quality is also
positively and significantly correlated as the results suggests (P = 0.697, P < 0.000).
37
4.8. Multiply Regression Analysis
While the correlation coefficient r indicates the strength of relationship between two variables,
it gives us no idea of how much of the variance in the dependent or criterion variable will
explain when several independent variables are theorized to simultaneously influence it
(Sekaran, 2003). Therefore, the current study used multiple regression analysis to understand
how much of the variance in the dependent variable is explained by a set of predictors. Table
4.06 presents the result of multiple regression of Job Satisfaction by set of predictors.
Table 4.4 – Model Summary
Adjusted R Std. Error of the

Model R R Square
Square Estimate
1 .779a 0.607 0.591 0.38446
a. Predictors: (Constant), Information Quality, System Quality
Model summary is an important one, as it gives the measures of how well the overall model
fits and how well the predictors predict. The first measure of the table 4.4 is correlation
coefficient (R). This is a measure of how well the predictors predict. In this model it is 77.9%
(0.779). It explained by 79.9% of validity of growth.
R square is the measure is the goodness of model fit. It is called the unadjusted multiple
regression coefficient. The value is expected to lie between zero and the one. R squared
increases as number of explanatory variables increases. The higher R squared, the greater the
percentage of the variation of the dependent variable that is explained by changes in the
independent variables. The closer the R squared is to one, the better the fit. In this model, 60.7%
(0.607) variations of the dependent variable are explained through selected independent
variables.
Adjusted R squared is the modified R square that adjusts for the number of terms in a model.
Table 4.4 shows adjusted R square value is 0.591 which endorse that 59.1% of variation.
Standard error reflects how much sampling fluctuation a statistic will show. It depends on
sample size. Present study the model is a best fitted model. Because the standard error of the
estimate is lower value and it indicates the small deviation of the actual value. As per above
table it has 0.38446 standard error value.
38
Table 4.5 – Analysis of Variance
ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 10.967 2 5.483 37.097 .000b
1 Residual 7.095 48 .148
Total 18.061 50
a. Dependent Variable: Performance of Organization
b. Predictors: (Constant), Information Quality, System Quality

Analysis of variance, or ANOVA, is a statistical method that separates observed variance data
into different components to use for additional tests. A one-way ANOVA is used for three or
more groups of data, to gain information about the relationship between the dependent and
independent variables. According to the table 4.22, the regression model developed was
significant, Since the P value of the regression model (p = 0.000) is less than the alpha value
(p < 0.05), it can be concluded that the model is significant with 95% confidence level.
F (2, 48) = 37.097, p = 0.000, p < 0.01, R2 = 60.7
The predictive strength or power of the independent variable could be compared and assessed
by inspecting the value of the standardized regression coefficient. The statistical significance
for the regression model is determined by significance value (p value) being less than selected
confidence interval and t value greater than +2 or less than – 2 considered to be significant in
this study.
Table 4.6 – Analysis of Coefficients
Coefficientsa
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
(Constant) .312 .433 .721 .475
System Quality .396 .138 .363 2.876 .006
1
Information
.529 .139 .481 3.816 .000
Quality
a. Dependent Variable: Performance of Organization
Table 4.6 shows the results of the regression analysis for the model is constructed to analyse
the impact of independent variable considering impact of control variables into an account.
39
• It can be concluded with 95% level of confidence that the constant is not statistically
significant as significance value (p = 0.475) being greater than significance level (p >
0.01) indicate that extraneous variables does not have a statistically significant impact
on Performance of the Organization. Further, an unstandardized coefficient value of
0.312 indicated that one unit increase of extraneous variables cause 31.2% change in
organizational performance which is insignificant in statistical nature.
• It can be concluded with 95% level of confidence that the System Quality is statistically
significant as significance value (p = 0.006) being less than significance level (p < 0.01)
indicate that system quality has a statistically significant impact on Performance of the
Organization. Further, an unstandardized coefficient value of 0.396 indicated that one
unit increase of extraneous variables cause 39.6% change in organizational
performance which is significant in statistical nature.
• It can be concluded with 95% level of confidence that the System Quality is statistically
significant as significance value (p = 0.000) being less than significance level (p < 0.01)
indicate that information quality has a statistically significant impact on Performance
of the Organization. Further, an unstandardized coefficient value of 0.529 indicated that
one unit increase of extraneous variables cause 52.9% change in organizational
performance which is significant in statistical nature.
40
4.9. Hypothesis Testing and Results
Table 4.7 – Testing of Hypotheses
Pearson’s Accepted
Hypothesis Variable correlation P Value or Not
value Accepted
Information Quality have significant
H11 impact on Performance of 0.535 0.000 Accepted
Organization.
System Quality have significant
H21 impact on Performance of 0.636 0.000 Accepted
Organization.
4.10. Chapter Summery

In this chapter researcher analysed data using descriptive analysis, correlation analysis and
regression analysis. According to above information R square 0.47. It mentions, of impact of
integrated accounting system efficiency on the performance of the Ruhunu Hospitals (Pvt) Ltd
explains independent variables in 47%. According to correlation, all variables have significant
impact of performance of the Ruhunu Hospitals (Pvt) Ltd. According to above information all
the hypothesis has accepted.
41
CHAPTER FIVE:
CONCLUSION AND RECCOMENDATION
5.1. Introduction
This chapter presents summaries of the study findings as per the study objectives, conclusions
based on those findings and recommendations which are based on both the study findings.
5.2. Conclusion
After successively collected and analyzed the data, the researcher has finally able to draw a
conclusion about the impact of integrated accounting system efficiency on the organizational
performance.
Initially the purpose of this research was to analyze the impact of the integrated accounting
system efficiency on the organizational performance of Ruhunu Hospitals (Pvt) Ltd.
Thereby in order to investigate and study the impact, two hypotheses have been developed
shaping the overall scheme of the research after reviewing the existing literature.
• H1: There is an impact of system quality on the organizational performance
• H2: There is an impact of information Quality on the organizational performance
The analysis of the data collected among 40 staff members of Ruhunu Hospitals (Pvt) Ltd
enabled the researcher to answer the hypothesis using Pearson correlation and regression
analysis with the SPSS software package.
One major finding is that there is an impact of integrated accounting system efficiency on the
performance of Ruhunu Hospitals (Pvt) Ltd from employees' perspective. The data provided
sufficient evidence relating to the significant relationships between organizational performance
and system quality as well as information quality.
Even though significant relationship has not been found between organizational performance
and system quality and information quality the results proved that these variables are
significantly correlated to organizational performance.
The results of the study state that there is a positive relationship between organizational
performance and information quality of the integrated accounting system. The findings imply
42
that organizational performance tend to influenced by quality of the information. Therefore this
variable can contribute to predict the organizational performance.
However, the results from the data analysis showed surprisingly negative relationship between
system quality and organizational performance. The data collected among employees didn't
provide sufficient evidence to confirming this assertion. The reason of this mismatch might be
that employees' perspective and their attitudes towards the integrated accounting system.
Furthermore, the research's segment might have affected the results to a certain extent. The
analysis is based on data collected from 40 respondents. A higher number of respondents might
have resulted in a different findings and conclusions.
5.3. Recommendation
According to the study done by the researcher and as per above conclusion, it would call for
managerial actions to consider the improving the efficiency of the Integrated Accounting
System of Ruhunu Hospitals (Pvt) Ltd.
• According to the analysis, it has mentioned that there has significant relationship
between system quality and organizational performance. This conclusion has been
presented according to the employees' perception and attitudes. Here employees do
have clear idea / awareness about the important of system quality of the integrated
accounting system. Furthermore, employees should be given knowledge and make
opportunities to learn about how to use the system.
• Poor communication was a major issue throughout the organization. Most of the
employees recommended stricter controls and discipline for employees that do not use
the system correctly.
• Additional training was commonly identified as a significant need across the
organization.
• Implementing unique accounting codes to all of the applications of Ruhunu Hospitals
(Pvt) Ltd, then all coding is consistent and all accounting entries automatically transfer
without errors and loss of data.
43
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47
APPENDIX 01
Dear Sir/Madam,
I am P. K. R. Sandaruwan, a final year student of the Faculty of Communication and Business Studies
at Trincomalee Campus, Eastern University, Sri Lanka. To fulfill the requirement of the degree
program, I have to complete a project work. For this purpose, I am collecting information to
study on “Impact of integrated accounting system on the organizational performance at
Ruhunu Hospitals (Pvt) Ltd.”
Your response to this questionnaire will help me to be successful in this study. In this context,
I assure you that the information provided by you will be utilized only for this study, not for
any other purpose.
Therefore, I kindly expect your valuable support for the success of my Project. If you have
any queries regarding this survey, please do not hesitate to contact me.
Thank You for your contribution.

P. K. R. Sandaruwan
Department of Business & Management Studies
Faculty of Communication & Business Studies
Trincomalee Campus
Eastern University, Sri Lanka
Email: randikasandaruwan2017@gmail.com
48
Please respond to the questions below by ticking appropriately on the scale.
Part A- Respondent’s Background (Please tick appropriately)
1. Gender
1. Male
2. Female
3. In what age bracket do you

fall?1. 18-25
2. 26-35
3. 36-45
4. 46-55
5. 56+
4. For how long have you served in your organization/Institution?

1. Less than 1 year
2. 1-4 years
3. 5-8 years
4. 8+ years
5. How long have you worked on the computerized working environmentoverall?

6. Less than 1 year
7. 1 – 5 years
8. 6 – 10 years
9. 11 – 15 Years
10. Over 15
49
Part B- Measuring Independent Variables
Please tick the following statement on liker scale ranging from strongly disagree to
strongly agree
Where;
1= strongly disagreed
2= disagreed
3= neither disagree nor agree
4= agree
5= strongly agree
Statement 1 2 3 4 5
System Quality
8 Existing accounting software system has been updated
frequently to fulfill organization requirements.
9 The existing accounting software system adequate to
current situation of the organization.
10. Integrated accounting system improves the ability of
understanding the information provided to decision
makers.
11. The existing accounting system of the organization is
easy to use.
Information Quality
12. Integrated accounting system increases the accuracy of
information provided to decision makers and decrease
the errors.
13. Availability of the information of existing accounting
system is high.
14. Integrated accounting system provides timely
information for decision makers.
50
15. Integrated accounting system adds a predictive value to
the information provided to various decision makers.
Part c- Measuring Performance of Organization.
Statement 1 2 3 4 5
16. Integrated accounting system support to reduce
the total operating and administration cost.
17. Implementing the integrated accounting system
has increased employee satisfaction in the
department.
18. The existing accounting system team can
understand how their work relates to other jobsin
department.
19. Integrated accounting system improves the execution of
all works of the organization in smooth and effective way.
Thank you very much for participating
51

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THE IMPACT OF INTEGRATED ACCOUNTING SYSTEM EFFICIENCY

ON THE ORGANIZATIONAL PERFORMANCE WITH SPECIAL

DEPARTMENT OF BUSINESS AND MANAGEMENT STUDIES,

FACULTY OF COMMUNICATION AND BUSINESS STUDIES,

EASTERN UNIVERSITY OF SRI LANKA

An Independent Research Report Submitted to the Department of Business and Management

DEPARTMENT OF BUSINESS AND MANAGEMENT STUDIES,

FACULTY OF COMMUNICATION AND BUSINESS STUDIES,

EASTERN UNIVERSITY OF SRI LANKA

THE IMPACT OF INTEGRATED ACCOUNTING SYSTEM EFFICIENCY

Supervisor: ......................................................... Date: ................................................

First Examiner:........................................................ Date: ................................................

Head: ......................................................... Date: ................................................

Dean: ......................................................... Date: ................................................

I hereby endorse the declaration by the candidate,

Declaration of the Student ....................................................................................................... iv

Declaration of the Supervisor ................................................................................................... v

List of Figures .......................................................................................................................... ix

List of Tables ............................................................................................................................ x

List of Abbreviations ............................................................................................................... xi

Acknowledgement ................................................................................................................ xiii

CHAPTER ONE: INTRODUCTION ...................................................................................... 1

1.1. Introduction ..................................................................................................................... 1

1.1.1. Integrated Accounting System.................................................................................. 1

1.1.2. Background of the Study. ......................................................................................... 2

1.1.3. Problem Statement. ................................................................................................... 4

1.1.4. Study Questions ........................................................................................................ 6

1.1.5. Study Objectives ....................................................................................................... 6

1.1.6. Main Objective: ........................................................................................................ 6

1.1.7. Sub Objectives: ......................................................................................................... 6

1.1.8. Significance of the study. ......................................................................................... 6

1.1.9. Micro and Small Business Owners and Entrepreneurs ............................................ 7

1.1.10. The Government ..................................................................................................... 7

1.1.11. Studiers and other academicians............................................................................. 7

1.1.12. Scope of the study................................................................................................... 7

1.1.13. Chapter organization............................................................................................... 8

1.1.14. Chapter Summary ................................................................................................... 9

CHAPTER TWO: LITERATURE REVIEW ........................................................................ 10

2.1. Introduction ................................................................................................................... 10

2.2. Theoretical Approaches................................................................................................. 10

2.2.2. Innovation diffusion theory .................................................................................... 11

2.2.3. Decomposed Theory of Planned Behaviour ........................................................... 11

2.2.4. Integrated Accounting System................................................................................ 12

2.3. Review of Empirical Studies ......................................................................................... 16

2.3.1. Integrated Accounting System................................................................................ 16

2.3.2. System Quality & Information Quality .................................................................. 17

2.3.3. Individual Impact & Organizational Impact ........................................................... 19

2.4. Literature Review Summary ......................................................................................... 21

2.5. Chapter summary .......................................................................................................... 22

CHAPTER THREE: RESEARCH METHODOLOGY ......................................................... 23

3.1. Introduction ................................................................................................................... 23

3.2. Research Site ................................................................................................................. 23

3.3. Conceptualization of variables ...................................................................................... 23

3.4. Development of Hypothesis .......................................................................................... 24

3.5. Operationalization ......................................................................................................... 25

3.6. Research Design ............................................................................................................ 26

3.8. Sample Design............................................................................................................... 26

3.9. Sample Technique ......................................................................................................... 26

3.10. Sample Framework ..................................................................................................... 27

3.11. Method of Data Analysis and Presentation ................................................................. 27

3.11.1. Data Collection ..................................................................................................... 27

3.11.2. Equipment validity and reliability ........................................................................ 27