Georges - Xuereb-PG Dissertation UPDATE

The Software Selection and Review Processes
for an Accounting Information System

by Maltese Firms
by
Georges Xuereb
A dissertation submitted in partial fulfillment of the requirements

for the award of the Master in Accountancy degree in the
Department of Accountancy at the
Faculty of Economics, Management and Accountancy
at the University of Malta
May 2014
14MACC082
Abstract
The Software Selection and Review Processes for an Accounting Information System
by Maltese Firms
Purpose: Most firms make use of computerised software as part of their

accounting information system. The accounting information system
processes data into meaningful information for decision making and
financial reporting purposes. Choosing the appropriate accounting
software which allows a firm to achieve its business objectives is thus a
very important decision. The purpose of this study is thus to evaluate
the software selection and review processes for accounting information
systems by Maltese firms.
Design: The objectives of this study were achieved by conducting semi-

structured interviews with a number of firms and administering a
questionnaire to a large sample of companies of all sizes.
Findings: The results obtained indicate that the vast majority of Maltese firms
make use of computerised accounting systems, purchased off-the-shelf
as stand-alone accounting software. Senior management and
accounting personnel are nearly always involved in the software
selection process, with the functionality of the software being the most
important software category taken into consideration in the final
decision. After purchasing the software, few firms review their
accounting systems on a regular basis – most prefer to wait for business
requirements to change or until problems start arising.
Conclusions: The software selection process is generally given significant attention,

and businesses tend to spend a lot of time at this decision stage. Most
firms are satisfied with their software choice, although a number of
improvements to the accounting software and systems have been
identified, as problems inevitably always emerge. However, firms are
reluctant to change over to new systems due to the uncertainty and
disruptions change brings with it.
Value: Due to the significance of having a well functioning and robust

accounting system, this study recommends using software tools to aid
in the final software purchasing decision, as well as performing
frequenting accounting system reviews to ensure the system’s
relevance in the competitive business environment.
Keywords: Accounting Information System, Computerised accounting, Software

selection process, Review process.
Library Reference Number: 14MACC081
ii
UNIVERSITY OF MALTA
FACULTY OF ECONOMICS, MANAGEMENT AND ACCOUNTANCY
DECLARATION
Student’s ID Code 428491M
Student’s Name & Surname Georges Xuereb
Course Masters in Accountancy
Title of Dissertation The Software Selection and Review Processes for an

Accounting Information System by Maltese Firms
I hereby declare that I am the legitimate author of this Dissertation and that it is my
original work.
No portion of this work has been submitted in support of an application for another
degree or qualification of this or any other university or institution of learning.
_______________________ GEORGES XUEREB

Signature of Student Name of Student (in Caps)
________________________
Date
iii
Acknowledgements
I would like to express my gratitude to everyone who offered their support during the
preparation and writing up of my dissertation; in particular my family and friends,
whose encouragement was deeply appreciated, and my dissertation supervisor,
George Cassola, for his guidance and counsel throughout all of the stages of this
research project.
iv
List of Abbreviations
AHP Analytical Hierarchy Process
AIS Accounting Information System
CAS Computerised Accounting System
CRM Customer Relationship Management
DBMS Database Management System
ERP Entity Resource Planning
ETC Employment and Training Corporation
GAPSE General Accounting Principles for Smaller Entities
GL/FRS General Ledger/Financial Reporting System
IFRS International Financial Reporting Standards
IRD Inland Revenue Department
IS Information System
IT Information Technology
MAS Manual Accounting System
MIS Management Information System
MRS Management Reporting System
REA Resources, Events, Agents
SDLC Systems Development Life Cycle
SEPA Single European Payments Area
SME Small and Medium Enterprise
TPS Transaction Processing System
VAT Value Added Tax
v
Table of Contents
CHAPTER 1 - INTRODUCTION .................................................................................... 1
1.1 Introduction ............................................................................................................ 2
1.2 Background information ......................................................................................... 2
1.3 Need for such a study ............................................................................................. 4
1.4 Objectives of the study ........................................................................................... 5
1.5 Limitations of the study .......................................................................................... 6
1.6 Study overview ........................................................................................................ 6
CHAPTER 2 – LITERATURE REVIEW ............................................................................ 7
2.1 Introduction ............................................................................................................ 8
2.2 Overview of the Accounting Information System ................................................... 8
2.3 Acquiring the Accounting Information System ..................................................... 10
2.3.1 The Systems Development Life Cycle ............................................................. 11
2.4 Users of the Accounting Information System ....................................................... 13
2.5 The impact of information quality on organisational performance ..................... 15
2.6 The evolution of Information System models ...................................................... 16
2.7 The computerisation of the Accounting Information System .............................. 19
2.7.1 Types of accounting software ........................................................................ 20
2.8 The software selection and review processes ...................................................... 21
2.8.1 Decision tools supporting the selection of the accounting software ............ 23
2.8.2 The accounting software selection criteria .................................................... 25
2.8.2.1 Local legislation and the effect on the software selection decision ....... 27
2.9 Conclusion ............................................................................................................. 28
CHAPTER 3 – RESEARCH METHODOLOGY................................................................ 29
3.1 Introduction .......................................................................................................... 30
3.2 Sources of data ...................................................................................................... 30
3.2.1 Primary data ................................................................................................... 30
3.2.2 Secondary data ............................................................................................... 30
3.3 Rationale for a mixed methodology...................................................................... 31
3.4 Data collection and analysis .................................................................................. 33
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3.4.1 Quantitative research method – Questionnaire ............................................ 33
3.4.1.1 Questionnaire sample size and data collection ....................................... 34
3.4.1.2 Questionnaire data analysis .................................................................... 35
3.4.2 Qualitative research method – Semi-structured Interviews .......................... 35
3.4.2.1 Interview data collection ......................................................................... 36
3.4.2.2 Interview data analysis ............................................................................ 36
3.5 Limitations of the study ........................................................................................ 37
3.6 Conclusion ............................................................................................................. 39
CHAPTER 4 – FINDINGS AND DISCUSSION ............................................................... 40
4.1 Introduction .......................................................................................................... 41
4.2 General overview of Accounting Information Systems in Malta .......................... 41
4.2.1 Job position and user role .............................................................................. 41
4.2.2 Industry classification ..................................................................................... 43
4.2.3 Business size ................................................................................................... 44
4.2.4 The use of Computerised Accounting Systems .............................................. 44
4.2.5 Separate or integrated accounting systems ................................................... 47
4.2.6 Acquiring the accounting system ................................................................... 48
4.2.7 Types of accounting software ........................................................................ 49
4.2.7.1 Common accounting software modules.................................................. 50
4.3 The software selection process for Accounting Information Systems ................. 51
4.3.1 Users involved in the decision ........................................................................ 51
4.3.2 Decision support tools .................................................................................... 53
4.3.3 Importance of the software categories .......................................................... 54
4.3.3.1 Importance of the software features within the major software
categories............................................................................................................. 55
4.3.3.1.1 The functionality/capability of the software .................................... 55
4.3.3.1.2 The cost of the software ................................................................... 56
4.3.3.1.3 The software vendor’s stability and support .................................... 58
4.4 Satisfaction with the Accounting Information System ......................................... 59
4.4.1 Satisfaction with the accounting software ..................................................... 59
4.4.1.1 The functionality/capability of the software ........................................... 60
4.4.1.2 The cost of the software .......................................................................... 61
4.4.1.3 The software vendor’s stability and support ........................................... 62
4.4.1.4 Comparison with the most important software categories .................... 62
4.4.1.4.1 Comparison with the most important software features................. 63
4.4.2 Business size and satisfaction ......................................................................... 64
4.4.2.1 Highest levels of satisfaction ................................................................... 65
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4.4.2.2 Lowest levels of satisfaction .................................................................... 66
4.4.3 Changing the accounting system .................................................................... 67
4.5 Areas for improvement ......................................................................................... 68
4.5.1 Improvements expected from the accounting software ............................... 69
4.5.2 Reviewing the accounting system .................................................................. 69
4.5.2.1 Frequency of accounting system reviews................................................ 71
4.5.3 Changes in the accounting software .............................................................. 71
4.5.3.1 The functionality/capability of the software ........................................... 71
4.5.3.2 The software vendor’s stability and support ........................................... 73
4.5.3.3 The cost of the software .......................................................................... 73
4.5.4 Satisfaction and improvements...................................................................... 74
4.5.5 Circumstances influencing changing over to a new accounting system ........ 75
4.5.5.1 Other factors ............................................................................................ 77
4.6 Conclusion ............................................................................................................. 78
CHAPTER 5 – SUMMARY, CONCLUSION AND RECOMMENDATIONS ........................ 79
5.1 Introduction .......................................................................................................... 80
5.2 Summary and conclusion ...................................................................................... 80
5.3 Recommendations ................................................................................................ 83
5.4 Areas for further research..................................................................................... 84
5.5 Concluding remarks............................................................................................... 85
REFERENCES........................................................................................................... 86
APPENDIX 1 – QUESTIONNAIRE .............................................................................. 96
APPENDIX 2 – INTERVIEW QUESTIONS ..................................................................106
APPENDIX 3 – OTHER JOB POSITIONS ....................................................................109
APPENDIX 4 – OTHER ACCOUNTING SOFTWARE ....................................................111
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Table of Figures
Figure 4-1 Respondent job position ............................................................................... 42
Figure 4-2 Users of the accounting software ................................................................. 43
Figure 4-3 Industry sectors ............................................................................................. 43
Figure 4-4 SME thresholds .............................................................................................. 44
Figure 4-5 Respondents who use MASs ......................................................................... 45
Figure 4-6 Using a MAS ................................................................................................... 46
Figure 4-7 Breakdown of firms using CASs or MASs ...................................................... 46
Figure 4-8 Firm size and count of different types of accounting systems ..................... 47
Figure 4-9 The accounting software used by the respondents ...................................... 49
Figure 4-10 Count of accounting software modules ...................................................... 50
Figure 4-11 Count of users involved in the accounting software purchasing decision.. 52
Figure 4-12 Mean ratings of the major software categories ......................................... 54
Figure 4-13 Mean importance rating of the functionality/capability of the software .. 55
Figure 4-14 Mean importance rating of the cost of the software ................................. 57
Figure 4-15 Mean importance rating of the software vendor’s stability and support .. 58
Figure 4-16 Mean satisfaction rating of the functionality/capability of the software ... 60
Figure 4-17 Mean satisfaction rating of the cost of the software .................................. 61
Figure 4-18 Mean satisfaction rating of the vendor stability and support .................... 62
Figure 4-19 Comparison of mean ratings between areas of satisfaction and areas of
importance ...................................................................................................................... 62
Figure 4-20 Mean ratings of satisfaction compared with the importance of the
software categories in the software purchasing decision .............................................. 64
Figure 4-21 Highest mean satisfaction ratings by company size ................................... 65
Figure 4-22 Lowest mean satisfaction ratings by company size .................................... 66
Figure 4-23 Intention to change the current accounting system ................................... 67
Figure 4-24 Mean satisfaction ratings of the respondents’ intention to change the
accounting system .......................................................................................................... 68
Figure 4-25 Review of the accounting system................................................................ 70
Figure 4-26 Mean ratings of changes wanted in the functionality/capability of the
software .......................................................................................................................... 72
Figure 4-27 Mean ratings of changes wanted in the software vendor’s stability and
support ............................................................................................................................ 73
Figure 4-28 Mean ratings of changes wanted in the cost of the software .................... 73
Figure 4-29 Mean satisfaction and improvement ratings .............................................. 74
Figure 4-30 Mean ratings of the decision to change over to a new accounting system 75
Figure 4-31 Mean rating of other factors which are taken into consideration when
deciding if a new system should be developed or purchased........................................ 77
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CHAPTER 1 - INTRODUCTION
Chapter 1 Introduction
1.1 Introduction
This chapter will establish the context and background of this dissertation;
describing the main elements of this research project, explaining the need for such a
study, outlining the objectives, and acknowledging the present limitations.
1.2 Background information

An Accounting Information System (AIS) processes both financial and non-
financial data which is gathered and processed into meaningful information for the
consumption by the users of the AIS (Hall, 2011, p.7). The three major subsystems of
an AIS are:
(1) The Transaction Processing System (TPS) – this supports the daily business
operations of the organisation, where similar transactions are grouped
together in transaction cycles.
(2) The General Ledger/Financial Reporting System (GL/FRS) – two very related
systems, these are used to extract data from the transaction cycles and
eventually produce financial statements to comply with external reporting
regulations (e.g. the income statement).
(3) The Management Reporting System (MRS) – this provides management with
relevant information for internal decision making through the data which is
input in the AIS (e.g. variances and budgets).
(Hall, 2011, p.9)
In today's business environment the AIS is computerised, with data being input
into the system by the users of the AIS. This is a more efficient way to input and
process data when compared to the past's wholly Manual Accounting Systems (MASs)
– although manual systems are still present today, used by a very small minority of
firms. One of the users of the AIS is the accountant himself, and his role involves
analysing information and then presenting it to other users, such as managers, for
2
decision making. Due to technology developments, accountants need to learn systems

skills so that they are able to provide information to the end users (Jean-Baptiste,
2006).
An AIS helps an organisation in achieving its objectives, and thus it is very

important for planning and decision making. As such, selecting the right software for
the AIS is a very important decision for most firms.
Firms may realise that they need to change their AIS, upgrading to a newer,
better system which will provide more useful information, helping them in the efficient
running of their business. They need to understand the main problem areas and those
which need improvement. They must research what the market is offering in terms of
accounting software, and which package best fits the criteria they are looking for,
before approaching the software vendors for a demonstration of how their product
works. The vital step here is recognising that a change is needed. This is why firms
must periodically review their AIS to determine its relevance in the current business
environment. This can be the hardest part of the potential changeover, since
management may feel that their current system yields acceptable results even though
it may actually be outdated and far behind the newer systems in terms of capabilities,
which may possibly lead to a competitive disadvantage.
Think about your competitors. Take a step back and view your business system
from a competitive perspective. Which accounting software packages do your
competitors use? (Little, 2006, p.36)
Firms also need to make sure that they take into consideration all the costs
associated with selecting the software, including the initial price and subsequent
maintenance costs, and that they choose the software that best matches their
requirements. Apart from the cost of the accounting software, businesses usually also
take into consideration vendor reliability in the software selection process. This is
because in today's fast paced business environment firms need to have the latest
software updates and bug fixes, as well as have real time continual support in order to
3
compete in the market. This is only possible if the firm is secure in knowing that the
software vendor is reputable.
No matter how good a product is, users still must rely on continued support from
the vendor. For this reason, you want to be sure your vendor is reliable, has the
resources to meet your requirements, and will be available when needed.
(Collins, 1999, p.63)
Collins (1999, p.64) emphasises that there is a direct link between the success
one has with the software vendor, and “the customer's continued success with the
product".
Accounting software has evolved from spreadsheets containing basic data, to

software with advanced capabilities having the ability to manage complex tasks which
can take into account many different functions. Amongst these different functions is
the software’s ability to take into consideration the various legal requirements present
in the business environment. All of these functions are used in the daily operations
which aid in the running of the business and in the production of financial statements,
also helping management to take better decisions.
1.3 Need for such a study

This research topic is relevant to the local economic scenario as it applies
virtually to all firms. Every firm has to have a system to collect, process, and gain useful
information for decision making from the data obtained. This study is thus useful for
Maltese firms to help them recognise the importance of the AISs which they use in all
of their business operations. Due to the dynamic and complex business environment,
there is a need to better understand AISs in order to aid firms to adapt to the new
business settings.
This research will help identify the most popular software selection criteria for
AISs, and also help analyse the review processes for such systems, as well as
establishing what firms value most when purchasing an AIS. The many different facets
of AISs are explored which can help firms to make all the necessary considerations
4
before deciding on which AIS to opt for, or whether a change to a new or updated AIS
is necessary.
This study may also allow accounting software developers or business solution
experts to understand the local scenario better and know more about what clients
want from their systems, specifically, the areas of satisfaction and areas for
improvement.
There are no local studies which explore the selection and review processes for
an AIS by Maltese firms. Academic work which explored similar concepts as the ones
which are going to be dealt with in this study include a research project which analysed
the use of accounting packages in Malta (Aguis, 2002), and a study which investigated
the Computerised Accounting Systems (CASs) used by Maltese companies (Caruana,
2009). Another dissertation dealt with using computer audit software for auditing
(Zammit, 1999). However, the similarities between these dissertations and the
author’s research topic start and end on the definition of the AIS and the use of
accounting or auditing software. This dissertation is not a continuation of these
studies. The author’s research will thus help contribute knowledge towards the AIS
literature in Malta, especially since there is little literature available locally in this area.
1.4 Objectives of the study

The objectives of this dissertation are:
(1) To evaluate the software selection process for AISs of firms in Malta;
(2) To analyse the AIS these firms use, and whether they are satisfied with it;
(3) To identify areas for improvement in their AIS.
5
1.5 Limitations of the study

As part of the research methodology, both questionnaires and semi-structured
interviews were adopted as a way to obtain the necessary data to achieve the
dissertation objectives. In the case of semi-structured interviews, the most relevant
data would have been obtained if the interviewee had taken part in changing over to a
new AIS or accounting software, and if the company had in fact changed its AIS once.
These two circumstances were explained when contacting the companies for the first
time to set up an interview, but they could only be confirmed once the interview was
under way.
Due to this dissertation topic being very general in nature, as opposed to

dealing with specific issues, certain detail could not be obtained as compared to a
dissertation topic which focuses on defined elements of the AIS. Discussions on the
findings obtained can also only be expressed at a high-level i.e. describing overall
feelings and dealing with the system as a whole, or large components of it.
1.6 Study overview

Chapter 1 – Introduction provided the background for this research project, as
well as the rationale for such a study and the main limitations. Chapter 2 – Literature
Review was constructed from the various foreign and local literature available to
create an informative and interesting setting for the readers to appreciate AISs, and to
understand the software selection and review processes which go into the purchasing
decision of such a system. The methodology adopted to obtain the data to achieve the
dissertation objectives is found in Chapter 3 – Research Methodology. The data
obtained is then presented and analysed in the next chapter, Chapter 4 – Findings and
Discussion. Chapter 5 – Summary, Conclusions and Recommendations comprises of the
final thoughts on the research topic, a general summary highlighting the main
elements of this study, and putting forward recommendations for future research.
6
CHAPTER 2 – LITERATURE REVIEW
Chapter 2 Literature Review
2.1 Introduction
This literature review will delve into the role of the AIS and its contribution to
decision making in the context of business organisations. Being a very broad field, the
AIS literature will focus on the users of the AIS, the information produced by the AIS,
and the automation of the AIS i.e. the CAS. This will entail an understanding of the
accountant's role in the AIS and recognising the importance of an adequate software
selection and review process, differentiating between the various types of accounting
software available. Obtaining an AIS may require an extensive systems development
plan to determine if the appropriate system has been implemented. It is also
important to highlight the evolution of the Information System (IS) models to gain an
appreciation of today's complex systems.
2.2 Overview of the Accounting Information System

The IS is "the set of formal procedures by which data are collected, processed
into information, and distributed to users" (Hall, 2011, p.7). The IS processes both
financial and non-financial transactions – transactions with economic consequences,
and non-monetary transactions which are important for a business organisation to
record.
The AIS is a subset of the IS. Gelinas (2002, p.14) defines the AIS as "a
specialised subsystem of the IS that collects, processes, and reports information
related to the financial aspects of business events". Bagranoff et al. state that the AIS is
the collection of raw inputs (data) which are processed into useful outputs
(information) to serve the needs of its users (Bagranoff et al., 2010, p.4). Boockholdt
also emphasises the aim for an AIS to provide relevant information for decision making
(1999, cited in Sajady et al., 2008, p.50).
However, Ismail and King explain that, over time, the AIS definition has
changed from a focus of simply providing financial information for decision making to
8
"one that embraces a much broader scope of information" (Ismail and King, 2005,
p.12).
The Management Information System (MIS) also emerges from the IS, and
although related to the AIS (as often both are integrated together), the MIS deals with
information beyond which the AIS normally processes.
According to Romney and Steinbart (2009), they describe the AIS as consisting
of six main components:
(1) The people who are the operators of the system (the users)
(2) The procedures involved in collecting and processing the data
(3) The data contained within the AIS
(4) The software used to process the data
(5) The Information Technology (IT) infrastructure to operate the AIS
(6) Internal controls and security measures which safeguard the data
The AIS is composed of three sub-systems: (1) the TPS, (2) the GL/FRS, and (3)
the MRS (Hall, 2011, p.9). Hall described these three sub-systems in detail:
 The TPS records and processes all of the financial transactions a business
organisation deals with on a daily basis. Similar types of transactions are
gathered into what are known as transaction cycles. Such transactions are then
delivered to the appropriate personnel to be used in their line of work.
 The GL/FRS are two related subsystems – data from the transaction cycles is
used by the GL system to update the general ledger control account, and the
FRS deals with information which is mostly for the external users' concern, such
as tax returns and financial statements - information which is generally to be
presented in accordance with certain legal standards.
 The MRS is for internal reporting purposes which allows management to take
better decisions and plan and control the organisation's resources more
9
effectively. Budgeting and variance analysis are the types of reports this system
produces.
(Hall, 2011, p.10)
2.3 Acquiring the Accounting Information System

The AIS can either be acquired through in-house development or purchased
from software vendors. Large companies which have enough organisational resources
may opt for the former option using a process known as the Systems Development Life
Cycle (SDLC), although this decision does not exclude the choice to purchase a
commercial system at the systems design stage of the SDLC (Bagranoff et al., 2010,
p.430). There are three basic types of commercial systems:
 Turnkey systems – these are general purpose off-the-shelf systems where the
user can select the appropriate modules needed by the organisation. Little
customisation is allowed by this type of system, but sometimes, for a fee, the
source code can be bought from the software vendor in order to be able to
make any program changes. Turnkey systems are the usual choice for smaller
businesses with limited resources.
 Backbone systems – these systems consist of a general system structure on

which the software vendor builds the user interface depending on the client's
needs. These type of systems are halfway between off-the-shelf and
customised systems, although they tend to be very costly.
 Vendor-supported systems – these are customised systems where the design,

implementation and maintenance of such a system is provided by the software
vendor. Although this would be a newly developed system, vendors reuse
modules from other different client systems in order to reduce costs.
(Hall, 2011, p.15)
10
2.3.1 The Systems Development Life Cycle

The SDLC is the process of initiating, analysing, designing, implementing and
maintaining an IS (Radak, 2009). This process involves a set of activities and methods
to continuously develop and improve the IS (Whitten and Bentley, 2005, p.112).
The systems development process will vary between different business

organisations, but the common principle of problem-solving underlies each process
(Whitten and Bentley, 2005, p.72). The SDLC can be done in-house or by hiring
consultants if the firm lacks the required technical expertise. Bagranoff et al. (2010)
describe the traditional SDLC in four stages:
(1) Systems planning – redesigning systems is a very expensive procedure and thus
a business organisation must make the appropriate planning before
undertaking systems development. Failing to make the right planning will lead
to a system which does not meet the user's needs, cause frustration amongst
the end users, and it will be costly to maintain. In this stage a preliminary
investigation of the current system is undertaken and strategic plans are
developed. These plans should be aligned with the organisation's strategic
goals and objectives (Bagranoff et al., 2010, pp.418-419).
(2) Systems analysis – here the system is examined in depth to gain a thorough
understanding of how it works and to identify any organisational goals which
are not being achieved at present. Organisational goals include:
o General systems goals – an AIS can contribute towards an efficient and

effective organisation through achieving these general goals.
o Top management systems goals – an AIS helps top management in

taking long-term decisions through the production of management
reports and budgets.
11
o Operating management systems goals – these are narrower and

shorter-term goals which operational managers have to achieve in the
current business year.
(Bagranoff et al., 2010, pp.420-424)
(3) Systems design – after gathering the data from the previous stage, the designs
of new or updated systems are formulated, choosing one which is legally,
technically, and economically feasible. The system design should first start by
specifying the desired outputs of the AIS, since satisfying the user's information
needs is the most important goal of the AIS. The inputs and procedures can
then be designed to achieve these outputs. The accounting software can then
either be developed in-house or purchased from a software vendor. When
evaluating vendor proposals, the performance capability of the systems put
forward is an important factor to be taken into consideration, as well as the
system's ability to be modified, and the extent of the vendor support
(Bagranoff et al., 2010, pp.425-431).
(4) Systems implementation, follow-up, and maintenance – this stage

incorporates many activities brought together such as the training of users to
be able to work with the new system, installing the CAS, post-implementation
review and the on-going monitoring and maintenance of the AIS. The post-
implementation review is performed to ensure the satisfaction of the
organisational goals by the AIS. Failure to satisfy these goals means that further
modifications are required to the system (Bagranoff et al., 2010, pp.433-437).
12
2.4 Users of the Accounting Information System

Management and operational personnel all make use of the data and
information produced by the AIS. This information is used both for internal decision
making and also to publish financial statements in compliance with legal and
accounting standards for external users (Hall, 2011, p.10).
Accountants have various roles in an organisation, including, but not limited to,
being users of the IS and also being system designers themselves (Hall, 2011, p.32).
Today, an accountant's job is not just one involved in fiscal matters, but his role is
more diverse, such as making information and data available to the other users of the
IS (Jean-Baptiste, 2006). The AIS also supports non-financial business processes such as
marketing, production and human relations, and thus the information produced by the
AIS needs to be useful for all users, and not just accountants (Bagranoff et al., 2010,
p.5). These users must therefore aid system developers in identifying what information
they require for decision making.
In fact, Lin et al. (2005) point out that the IS should be designed for the needs
and interests of the users – who should be involved in the design process. If this design
process is performed correctly, then the system implementation will be successful and
the risks of system design deficiency and disruptions will be minimised.
As one of the main users of the AIS, accountants should provide technical
expertise to management (Hall, 2011, p.633). Brecht and Martin share this view and
they posit that accountants can improve and add value to the flow of the information
produced by the IS by giving advice on systems development to managers on “(1) what
information is distributed or reported, (2) system delivery methods and timing, (3) the
impact of technology on decisions and the decision-making process, (4) database
designs, and (5) system analysis capabilities” (Brecht and Martin, 1996, p.17).
Accountants would thus be helping firms reach their competitive and strategic
business targets more effectively.
13
The accountant's involvement should be "pervasive" in systems development,

since system failures largely occur due to lack of participation and involvement from
the users themselves (Hall, 2011, p.32).
McChlery et al. (2005) express a similar viewpoint when they identify

accountants as hindering the development of systems if they are not proactive and if
they do not participate and give sound advice on making the most effective use of the
accounting system. Small business owners often feel that accountants only prepare the
necessary information just for the finalisation of the year-end accounts, and lack "an
awareness of the needs of their businesses" (McChlery et al., 2005, p.23). The
accountant can provide advice to firms on matters such as the business reporting
requirements and the accounting software available for purchase (Breen et al., 2003,
p.9). This advice can lead to an improvement in the business processes and strategic
decision-making (Oliver, 1994).
Jean-Baptiste (2006, p.16) explains that the "modern accountant is expected to

handle many aspects of both AIS and IT". Hall (2011) states that the design of the AIS
rests on accountants and IT professionals, the former involved with the design of the
conceptual system whilst the latter are involved in the design of the physical system.
The conceptual system design involves what an AIS should entail – whether the
accounting rules and standards will be adhered to, the control aspects of the IS design,
and the audit-ability (the audit trail) of the AIS. The physical system will be concerned
with how information is captured and communicated throughout the organisation, and
the suitable technology required for such a system to properly function as intended
(Hall, 2011, p.32). The IT professionals do not need to be a part of the software
selection process, but they are needed for their advice on the available technology and
compatibilities (Basile et al., 2002, p.28).
14
2.5 The impact of information quality on organisational

performance
The AIS provides information for the use of internal and external reporting, tax
and assurance services, which serves as a basis for economic decision making (Murthy
and Wiggins, 1999). The design of an AIS in fact usually begins with what reports are
expected by its users, since these reports are used for effective managerial decision
making (Bagranoff et al., 2010, p.221). The IS, AIS and MIS are all concerned with
producing high quality information to "facilitate business processes such that firms are
economically and socially effective in their competitive environments" (Wilkin and
Chenhall, 2010, p.107).
Management requires "good quality and reliable information" (Sajady et al.,

2008, p.51). Kim argues that the user's perception of the quality of the information
produced from the AIS will ultimately impact the extent of usage of the AIS (1989 cited
in Sajady et al., 2008, p.51). Furthermore, research shows that poor quality data has
social and economic consequences (Strong et al., 1997, p.103). Wang et al. (2005)
argue that poor quality data and information will impact a business organisation
adversely, ultimately leading to higher costs.
Aspects of good quality information are identified as accuracy, format, content,

ease of use and timeliness by Doll and Torkzadeh (1988), and precision, reliability and
completeness by Magal (1991, p.100). On the other hand, Huang et al. (1999, cited in
Xu, 2003, p.16), claims that "data quality should be defined beyond accuracy and is
identified as encompassing multiple dimensions", but there is no single accepted
definition of what standard data quality should entail (Klein, 1998, para.6).
15
2.6 The evolution of Information System models

In the last few decades there have been a number of IS models representing
AISs, and some of the older IS models (known as legacy systems) are still in use today.
As long as a system adds value, or is perceived to add value to the business
organisation, older systems will remain present (Hall, 2011, p.27). There are a number
of IS models, and the drawbacks of the older models promoted the growth of newer,
more sophisticated systems. Hall (2011) delves into some of these IS models:
(1) Manual Process Model – the traditional model of gathering and recording data
and information in a business organisation. The events and resources are
physically recorded in the accounting books such as ledgers and journals. This is
very rarely used anymore in practice (e.g. physical journals are no longer kept),
although modern AISs may still utilise similar concepts (Hall, 2011, pp.24-25).
(2) Flat-File Model – these are linked to the legacy systems, which were
implemented from the 1960s through to the 1980s, and are still in use today. In
this system each user has his or her own data files and they are not shared with
others within the organisation i.e. there are no structural relationships
between the records. Since the data files are not integrated together, there are
a number of limitations and redundancies in the data processing:
o Storing the data - it is very inefficient to store the data multiple times to
make it available to all of the users, and so the business organisation
will have to incur many costs in collecting the same data numerous
times.
o Updating the data - since the data is not available at one source, each
time it is updated the changes have to be made for each individual user,
and this wastes both time and resources.
16
o Data sharing - a user can only take decisions using the current data he
or she has available, and it is difficult to share information with other
users in this system. In order to make use of new information for
decision making, the procedure of making this information available to
all the users costs time and hinders business performance.
o Different information needs - the flat-file structure may exclude certain

data attributes (elements of data which make up the records) that may
be beneficial for one group of users but not another. For example,
because the primary users of accounting data are the accountants, data
is collected and processed to accommodate their needs, while other
departments will have to make do with this sub-optimal data set. The
other departments can then decide to either alter the data to suit their
needs, or obtain new information - all at further costs to the business
organisation.
(Hall, 2011, pp.25-27)
(3) Database Model – this model helps to overcome the problems associated with
the flat-file model by centralising data into a common database which all users
have access to. However, this access is controlled by the Database
Management System (DBMS) which only allows the authorised users who have
the proper permissions to access the data. The limitations here are only in so
far as to the availability of the data acquired by the organisation, and the level
of the user's authorisation to access this data. This model overcomes some of
the limitations of the flat-file model through:
o Elimination of data redundancies - data is stored only once and this

greatly reduces data collection and storage costs.
o Elimination of multiple updates - there is only one source of data and

thus only one update procedure is required.
17
o Immediate data availability - any changes to the data is instantaneously

updated and made available to all the users.
(Hall, 2011, p.28)
The programs and applications of flat-file and early database systems were not
integrated together and thus functioned independently of each other. The
possibility of having total integration emerged with the Relational Database
Model. Resources, Events, Agents (REA) and Entity Resource Planning (ERP)
models are examples of technologies which make use of this concept (Hall,
2011, p.28).
(4) REA Model – this model, proposed by McCarthy (1982, pp.562-563), uses the
concepts of, and the interrelationships between, resources, events and agents
to develop a generalised accounting framework:
o Economic resources - these are scarce assets which are under the
control of the organisation, but exclude accounts receivable, since these
are recognised as simply the difference between sales and cash receipts
in the system.
o Economic events - these are actions which affect the consumption and
distribution of resources and are thus very important to the accounting
system.
o Economic agents - entities from both within and outside the

organisation who affect the organisation and the way it uses and
disposes of its scarce resources.
The REA model does not use the traditional accounting concepts of double-
entry bookkeeping, journals, and ledgers, but instead the REA model captures
18
transactions from relational database tables from the economic events which
affect the organisation (Hall, 2011, pp.28-31).
(5) ERP System – ERP is an IS model which supports the key business processes
through the integration of software modules. This system facilitates data
sharing and information flows to all users within the organisation. ERP
packages are sold in standardised modules, and one problem associated with
this is that a business organisation will have to either alter the business
processes to fit with the ERP system, or it will have to adapt the ERP to fit with
the business processes (Hall, 2011, p.31).
2.7 The computerisation of the Accounting Information

System
Although AISs can be manual systems, they are too slow in processing data
when compared to CASs. So in today's fast paced business environment, CASs are the
norm (Bagranoff, 2010, p.4). Cheaper access to information technologies has
contributed to the widespread adoption of CASs (Abu-Musa, 2004, p.19).
Computerising the accounting system brings about many benefits associated

with the automation of tasks (ACCA UK, 2006). Raghunathan and Wobser (1995) state
that speed, time-saving, more detailed information, and better traceability were some
of the main benefits of computerisation claimed by many firms. To derive the most
benefits from a CAS a business should employ competent staff who are capable of
making the best use out of these systems (Breen et al., 2003, p.9).
Not only has computer technology aided users to extract information more
quickly and reliably, it has also aided firms to give them a strategic and competitive
edge in decision-making (Brecht and Martin, 1996). Furthermore, the strategic use of
technology can provide companies the opportunity to grow and prosper (Morey, 1999,
p.91).
19
2.7.1 Types of accounting software

The CAS requires accounting software to function. Accounting software has
evolved from simple bookkeeping processes to complex enterprise-wide software
suitable for large multinational corporations (Bagranoff et al., 2010, p.282). There are
also specialised software packages for certain industries where the software is capable
of performing specialised functions specific to that particular industry which is not
possible by the more generic software packages (Bagranoff et al., 2010. p.286).
Most accounting software modules include "general ledger, accounts payable,

accounts receivable, inventory control, sales invoicing, purchasing, and payroll"
functions (Mattingly, 2001, p.49).
Low-end small business accounting software is used by small firms which do

not need the sophistications and functions that the high-end software suites come
with. They are also relatively inexpensive (Davis, 1997, p.24). Small businesses are
usually more interested in knowing their cash flows and determining profits, so they
choose software which gives them the type of information they need for decision-
making (Bagranoff et al., 2010, p.283).
Mid-range and large system accounting software are chosen when a firms'
business processes are too complex and its transaction volume too large to make
effective use of low-end software. Popular low-end software can only support a limited
number of users, and the business may need better tools for more extensive data
analysis (Needleman, 2004, p.26). These larger accounting software systems are also
able to make use of multiple currencies in their transaction processing, hence used by
firms who trade internationally (Bagranoff et al., 2010, p.284).
20
2.8 The software selection and review processes

Business requirements change over time, and a firm may find that it needs to
review its current AIS, and perhaps move on to a new system. Although this may be
one of the most important decisions an organisation can take, many firms are
reluctant to make a change because they are comfortable with using a system they are
familiar with (Sage Software Inc., 2009). Change is sometimes forced by exogenous
circumstances, such as heavy competition or amendments in laws and regulations, but
in other cases management must identify internal warning signals that the business
requires new or updated accounting software (Bagranoff et al., 2010, p.282). These
signals include late periodic reports, complaints by management on the lack of
available information for decision making, and taking far too long to close the books at
the end of an accounting period (Bagranoff et al., 2010, p.299). Realising a need for
change may be imperative if a firm is to remain competitive in the marketplace (Little,
2006).
Granlund (2011) explains that many firms today purchase packaged accounting
software from software vendors, and thus management may focus more on the
selection criteria rather than dealing with the more technical systems design.
Management needs to determine what software features of the AIS are in line with the
business' strategic objectives, but there is less emphasis on system technicality
assessments since this is mostly done by the software vendors. As such, the
relationship with software vendors plays an important role in IS development
(Granlund, 2011, p.7).
In the past, the choice of accounting software for the AIS was not seen as part
of the business strategy. Instead, it was only considered as a way of automating the
manual processes of the business (West and Shields, 1998, p.4). An AIS can help in
achieving a business organisation's objectives by "quantifying the financial impact of
each alternative available to the decision" (Jawabreh, 2012, p.175), hence it is very
important for planning, controlling and decision making. Therefore, selecting the right
AIS is crucial for firms. Ivancevich et al. (2010, p.66) pointed out that "a wrong choice
21
could mean incompatibility problems, functional limitations, and frustration, as well as

unhappy workers and customers".
Choosing the right accounting software for the AIS is a complex process due to
the number of choices available, the different strengths and weaknesses of the
different packages, and because of the cost of adopting an AIS itself (Rushinek and
Rushinek, 1995). Borthick (1988, p.52) asserts that the cost of the purchased software
should justify the "business function it accomplishes".
The scalability of the accounting software is an important aspect to consider,

because, as businesses grow, the AIS of the organisation should be able to
accommodate such possible future changes in size (Bagranoff et al., 2010, p.284).
Jones compares the selection of accounting software to seeking a significant other for
a healthy, long-term relationship – where one chooses a partner "who grows with
you", inferring a software choice which is scalable to the business' size (Jones, 2002,
p.24). Similarly, Collins (1999) remarked on the importance of taking a decision within
the context of a long-term period, because as businesses grow and change, so do the
software needs of the organisation. Therefore, it is important to select the AIS
software which best fits the business organisation's purposes to ensure long-term
satisfaction with the choice made (The decline and fall of stand-alone accounting
systems, 2000).
There is never just one best accounting software available – a firm will have to
deduce which accounting package best serves the needs of the business (Mattingly,
2001). The review process involves identifying problem areas and seeking
improvements from the current system. The SDLC is an example of a continuous
review process. A good AIS should enhance decision-making, produce more accurate
and timely information, and allow management to have greater control in managing
their business.
22
2.8.1 Decision tools supporting the selection of the accounting

software
The selection of accounting software should not be made by just one person –
it should be made by a diverse team of members since there are many users of the AIS,
and all of their information needs should be represented in the software selection
(Basile et al., 2002, p.27). Today, there are many accounting software packages and
integrated accounting systems available, and these may all contribute to information
overload. This means that those involved in the software selection decision find that
there are just too many options available and choosing the most appropriate software
ends up being a very arduous task (Mattingly, 2001, p.50). Various software selection
processes and models (decision support tools) have thus been put forward in order to
simplify this decision-making process.
In general, the first step is usually to decide on the features that the business
wants from its software, and then selecting that software which best fit these features
(Bagranoff and Simkin, 1992, p.82). Rushinek and Rushinek (1995) also advocate this
two-step approach.
Lin et al. (2005) proposed a model where the first step is to model certain parts
of the system, such as the user interface (i.e. prototyping), and then by means of the
users involvement the final system is designed based on the prototype. The final
design is only possible through the users suggestions from their experience working
with the prototype. This hands-on approach is also recommended by Rushinek and
Rushinek (1995).
Oliver (1994) recommends a six-step approach where the accountant helps

identify the key business strategies and accounting processes, and then selecting the
appropriate accounting software which best fits the business strategy from a list of a
few local vendors. The author makes it a point that "successful selection will lead to
successful systems" (Oliver, 1994, p.25).
23
Gerbel (2012) talks about building a business case, which consists of evaluating
why a change is needed, what is needed, and how the business organisation will go
about to achieve the required system. The author concludes that this procedure will
help one learn more about the current business processes, and the knowledge
acquired will prove invaluable in implementing the new system.
The Analytical Hierarchy Process (AHP) was developed by Saaty (1980). The
AHP "divides the decision making process into several levels of intermediate criteria"
(Maheshwari and McLain, 2006, p.40). These criteria are ranked and they ultimately
influence the final decision to be taken. Maheshwari and McLain used the AHP to
establish a four-level "accounting software package evaluation and selection model"
(2006, p.41). This model takes into consideration the costs to be borne in selecting and
maintaining the AIS, the accounting and technical features required, and the expected
vendor support and performance aspects, amongst other criteria. The authors claim
that this model can be amended and applied to the needs of different small businesses
(Maheshwari and McLain, 2006, p.43).
Bagranoff et al. advocated a technical approach to evaluating an AIS using a

point-scoring analysis. Different accounting software packages are evaluated and given
scores according to a list of wanted features. The software with the highest number of
points is chosen as it is deemed to be the one which best meets the business
organisation's requirements (Bagranoff et al., 2010, p.431). This approach is very
similar to the function of some accounting software review programs on the market
such as The Accounting Library - which is an automated software program designed to
help with the software selection decision (Basile et al., 2002, p.29).
Although these decision support tools are very useful, they should be used to
"support decisions, not make them" (Bagranoff and Simkin, 1992, p.86). One
researcher also believes that certain step-by-step decision aiding procedures end up
complicating the selection process even more, and sometimes hiring an expert
consultant might be a better option rather than let a firm undertake the purchasing
decision by itself (Mattingly, 2001, p.50).
24
2.8.2 The accounting software selection criteria

Studies show various trends of the common software selection criteria used by
firms. These can be of help to software providers in learning what their clients want
from their systems, and what features they are satisfied with the most.
Rushinek and Rushinek (1995, p.29) suggest that the ease of use of the
software, vendor support, and software upgradability should always be considered
whenever evaluating an accounting software package. Collins (1999) correlates the
success a business has with its accounting software with the success it has with its
relationship with the software vendor. Amongst other reasons, after the initial set up,
vendor support is needed for the inevitable maintenance required (bug fixing and
general troubleshooting) and for updating the software (Collins, 1999, p.64). Little
(2006) also stresses the importance of a healthy vendor relationship since when
system problems arise, vendor support proves invaluable. However, the author
remarks that just having reliable vendor support without an appropriate accounting
system in place will still yield unsatisfactory results (Little, 2006, p.37). Morey (1999,
p.90) maintains that the software vendor's ability to grow with the business is another
facet of the vendor relationship which should be taken into consideration.
In contrast to past research findings (Rushinek and Rushinek, 1995; Collins,

1999; Little, 2006), Elikai et al. find that vendor stability and support are not
considered to be important factors in selecting an accounting package (Elikai et al.,
2007, p.31). Arriving to a similar conclusion, research by Ivancevich et al. shows that
vendor stability and support are only rated as being moderately important selection
criteria (Ivancevich et al., 2010, p.69).
In conducting his research, Thong (1999) proposed that business size was the
most significant variable in determining the extent of using computer software and
hardware to support the business processes i.e. the extent of IS adoption. This makes
sense because larger businesses can afford to adopt more complex ISs than smaller
firms who have limited resources. However, research by Bressler and Bressler (2006,
25
p.60) disagrees with this claim as the result of their study shows that the selection of
accounting software does not appear to depend on the size of the business.
The flexibility and user friendliness of the software is an aspect which users
rank as being very important in the software selection process (Raghunathan and
Wobser, 1995, p.24). User friendliness is also an aspect of the accounting software
which many AIS users expect improvements in (Bressler and Bressler, 2006, p.59). A
study by Ilias et al. identified that the user interface (content and format), user
friendliness, and the system speed and reliability are some of the major factors which
influence the user's satisfaction towards CASs (Ilias et al., 2010, p.34).
Functionality and capability are identified to be critical selection criteria

(Ivancevich et al., 2010). Within this category, the highest ranked features include real-
time processing, security, user friendliness and report-writing functions (Ivancevich et
al., 2010, p.70). Upgradability and customisation of the software follow in the ranking.
Customisation of the software i.e. adapting the accounting software to the information
needs of the business, was another important factor category identified by Elikai et al.
(2007). In the past, accounting software products required source code modification if
a user wanted to change something from the system. Customisability of the software is
now expected through editable fields and input screens to tailor the program to a
user's requirements (Collins, 1999, p.62).
In an interview with senior research analyst David Keithley (Making sense of the
key developments in accounting software, 2002, p.4), Keithley recommended users of
AISs to focus on the legal, business and strategic requirements before selecting an
accounting software package, and to examine any potential limitations this decision
may bring with it.
Surprisingly, the cost of the accounting software was not found to be an

important selection criteria for many business organisations (Raghunathan and
Wobser, 1995; Bressler and Bressler, 2006, p.59; Ivancevich et al., 2010, p.69).
Moreover, accounting software is much more likely to be chosen based on the actual
features inherent in it, rather than its cost (Raghunathan and Wobser, 1995, p.23).
26
Differing from the results of earlier studies, however, Elikai et al. found that the initial
purchase price and annual operating cost of the software are factors which strongly
influence the purchasing decision (Elikai et al., 2007, p.28). Ultimately, the importance
of the purchasing price of accounting software varies between different companies
(Mattingly, 2001, p.49). Bagranoff and Simkin (1992) note that while the cost of the
software may not be very expensive, it is the installation and operating costs, as well
as the ongoing vendor support and training expenses, where a lot of money is spent
on. This may not be very clear for a business exploring the different accounting
software available for the first time (Bagranoff and Simkin, 1992, p.82).
Small businesses may seek the advice of accounting firms to help them in their
software selection process (Raghunathan and Wobser, 1995). Satisfaction with the
software chosen tends to be higher when a business heeds the advice from an
accounting firm instead of choosing the software based on its own research. The
authors consider that this may be due to small businesses perceiving accounting firms
as "valuable guides" (Raghunathan and Wobser, 1995, p.23). Similarly, Bressler and
Bressler argue that other factors which influence the accounting software purchasing
decision includes recommendations by business consultants and the recommendations
of other business owners and accountants (Bressler and Bressler, 2006, p.59). Their
research also indicates that satisfaction with the accounting software does not depend
on the type of business ownership, such as a sole trader, a partnership or a
corporation (Bressler and Bressler, 2006, p.59).
2.8.2.1 Local legislation and the effect on the software selection decision
The choice for the accounting system software needs to take into consideration
the aspects of the local financial legislation, by, for example, enabling the payroll
software to be Single European Payments Area (SEPA) compliant (Times of Malta, 29
September 2013). The local “legal processing and reporting requirements” must be
met for successful implementation of the software (Shireburn payroll and HR manager,
2013). Additionally, the software needs to be flexible enough to be modified if there
are any changes in the laws and regulations which affect the business’ operations. This
27
would not only ensure compliance, but it would also avoid fines imposed by the Inland
Revenue Department (IRD), and any penalties charged by the Employment and
Training Corporation (ETC) in the case of payroll services (Payroll, n.d.).
Recent amendments to the Value Added Tax (VAT) legislation made it a

criminal offence for the software to allow changes to be made to a transaction after it
had been posted since this would have ramifications on the VAT payable, and is thus
illegal (The Malta Independent, 10 May 2011). The software purchased must not have
this function available in order for a business to avoid criminal liability.
General Accounting Principles for Smaller Entities (GAPSE) is a Legal Notice

enacted to provide smaller firms with alternative reporting requirements which are
less resource intensive than the adoption of International Financial Reporting
Standards (IFRSs) as adopted by the EU to “reduce the regulatory burden” (Times of
Malta, May 31 2012), and hence “provide financial information that is more relevant
to smaller entities” (PricewaterhouseCoopers, 2012, p.3). The accounting software
must be able to adapt to any changes in GAPSE. For example, if the presentation
requirements of GAPSE change, the report-writing function of the software should be
able to produce reports which are still GAPSE-compliant.
2.9 Conclusion
This chapter encompasses the main areas relevant to an AIS. It is vital that any
IS produces the necessary information to support successful managerial decision
making. The advancement in IT has created a business environment where the right
selection of accounting software will aid in creating an opportunity for improving
business performance. This improvement can only be achieved through careful
consideration of the accounting software available through methodological systems
planning and designing. Furthermore, the software selection decision must always be
aligned with the organisation's strategic goals and objectives.
28
CHAPTER 3 – RESEARCH METHODOLOGY
Chapter 3 Research Methodology
3.1 Introduction
This chapter will outline the methodological approach taken in order to achieve
the research objectives of this dissertation which were set out in Chapter 1 –
Introduction. First, the sources the author used to review the existing literature on the
subject are identified as this was the starting point for this research project. The
theoretical underpinning of the available research methods is then described, and the
rationale for using a mixed research methodology is explained. Any limitations faced in
obtaining the data and in the subsequent analysis of such data are then defined, and
the solution to these problems are also stated. The goal of this chapter is to provide
enough detail to make the author’s research process understandable and replicable.
3.2 Sources of data

The author used both primary and secondary data sources in the writing up of
this dissertation.
3.2.1 Primary data

Primary data is new data, original in nature and not found elsewhere, collected
by the author for the purposes of this research project. The author conducted
interviews and sent out questionnaires in order to obtain this type of data.
3.2.2 Secondary data

Secondary data is data acquired by other research parties in the past which
have now been adopted by the author in this dissertation. The author acquired
secondary data through various means, including extracting information from books,
accountancy journals, local newspapers, published and unpublished dissertations,
company publications, website articles and conference papers. These sources were all
used to build up and bring together the existing literature on the subject in order to
gain a detailed understanding of AISs, and the software selection and review processes
30
undertaken to choose, modify and develop a business’ AIS. Concerns can be raised on
the reliability of secondary data sources (since the third parties are not personally
known) and their relevance (as time passes by the research may become obsolete).
The literature chosen was thus based on what was thought to be both relevant and
reliable for this research project to be authentic and interesting, and the literature
reviewed sets the scene for the remainder of the chapters.
3.3 Rationale for a mixed methodology

There are different methods of inquiry used for academic research – most
notable are qualitative research methods and quantitative research methods.
Qualitative research focuses on words and meanings, and it seeks to help the
researcher gain an in-depth understanding of the different perspectives people have
on the subject matter. Here one cannot generalise the findings to the whole
population, but the researcher can infer a “conclusion from [the] particular instances”
(Spratt et al., 2005, p.10). Tesch (1991, pp.17-25) states that all qualitative research
methods have three common features: being language-oriented, being descriptive in
their nature, and that they include theory-building approaches. Qualitative research
covers many different methods, including “interviews, case studies, ethnographic
research and discourse analysis” (Balnaves and Caputi, 2001, p.3). On the other hand,
quantitative research is about “explaining phenomena by collecting numerical data
that are analysed using mathematically based methods (in particular statistics)” (Aliaga
and Gunderson, 2000, p.3), with results usually presented in numerical and/or
graphical form (histograms, bar charts, pie charts and tables, amongst others). This
involves the use of questionnaires, surveys and experiments, amongst other methods
of data collection (Hittleman and Simon, 1997, p. 31).
Stake notes that the major differences between these two types of research
methodologies are: “(1) the distinction between explanation and understanding as the
purpose of inquiry; (2) the distinction between a personal and impersonal role for the
31
researcher; and (3) a distinction between knowledge discovered and knowledge

constructed” (Stake, 1995, p. 37).
Although many texts provide a distinction between qualitative and quantitative

research, there are researchers who disagree with this distinction and believe that it is
unnecessary and not useful, except for being “a convenient way of organising a
textbook” (Spratt et al., 2005, pp.11-12).
There are more than one way in which to combine different research methods.
Two main ways of combining research methods are multi-method studies and mixed-
method studies (Spratt et al., 2005, pp.6-8). The former is a research paradigm which
uses a variety of data sources that are all compatible with each other. This is where
more than one qualitative research method is used (for example, unstructured
interviews and a case study), or more than one quantitative research method is
adopted for the study (for example, surveys and structured observations). The latter,
mixed-method studies, is where a mix of both qualitative and quantitative research
methods are used together, such as using a survey and conducting semi-structured
interviews. This method is often used to approach a problem from different
perspectives.
The author decided on a mixed method study including both quantitative and
qualitative research methods for this dissertation as it allows the extraction of the
most relevant data to achieve the research objectives due to its inherent flexibility
(Spratt et al., 2005, p.8). Johnson and Onwuegbuzie explain that a mixed methodology
will likely result in the combination of “complementary strengths and nonoverlapping
weaknesses” (Johnson and Onwuegbuzie, 2004, p.18). The strengths of quantitative
research lie in “conceptualising variables, profiling dimensions, [and] tracing trends
and relationships”, whilst the strengths of qualitative research are demonstrated in
“the in-depth study of smaller samples, and [the] great methodological flexibility which
enhance the ability to study process and change” (Punch, 2009, p.290). Thus the
strengths of both methods compensate for each other’s weaknesses.
32
3.4 Data collection and analysis

This section will explore the data collection methods that the author employed
and the subsequent methods for analysing the data.
3.4.1 Quantitative research method – Questionnaire

The author chose a questionnaire as the primary research method as it has the
advantage of reaching a wider audience, and hence a greater quantity of responses
can be obtained (Thomas, 2010, p.316). The downside of this method is that individual
customisation of the questionnaire for each respondent is neither practical, nor
possible.
The questionnaire was primarily set up so as to obtain data on the software

selection and review processes of an AIS in Malta. A copy of the questionnaire can be
found in Appendix 1. General questions on firm type and size and the role of the
respondent within the business were then followed up with specific questions on the
AIS – the software which is used, rating the importance of the software features in the
purchasing decision and the satisfaction with the AIS, and identifying any
improvements which may be needed. The twenty one question survey also utilised
skip-logic depending on the respondent’s previous answers in order to eliminate
redundant questions.
Although the author created the questionnaire from a blank slate, some ideas
were taken from a recent questionnaire by Ivancevich et al. (2010) where it was seen
that certain areas explored by the authors were also relevant for this dissertation.
Ivancevich et al. set out to determine the accounting software selection and
satisfaction by accounting professionals.
33
3.4.1.1 Questionnaire sample size and data collection

After consultations with the author’s dissertation supervisor, and making use of
a free sample size calculator from an online survey solutions website
(surveysystem.com/sscalc.htm), a sample size of 267 local firms was agreed upon. This
result emerged given the large population available for this research project’s
purposes, at a confidence level of 95% and a confidence interval (margin of error) of 6
percentage points.
The firms were chosen from the Business Directory of the Malta Enterprise
website (maltaenterprise.com), selected through a simple random sample from the 26
different industry categories listed. From the population (N), a sample of 267 (n) firms
were selected with each firm in the population having an equal probability of being
chosen. A number was given to every firm in the list and numbers were drawn
randomly – each number drawn representing the firm selected from the list. This was
repeated until 267 firms were chosen. Some firms were included in more than one
industry category and these duplicates were eliminated. The industry categories were
not equal in terms of the number of firms within each category e.g. the business and
financial services sector contained much more firms than the pharmaceuticals sector.
The details of each company selected, such as the e-mail address and the
industry it competes in, were stored on a spreadsheet so as to enable the author to
manage the contact list more conveniently, and also for future reference. The business
size of the firms was not known as at the date the contact details were complied,
although through the random sample firms of all sizes (micro, small, medium and
large) should have been selected. This was confirmed once the questionnaire results
were being analysed.
The questionnaire was set up online and e-mailed to the sample. Reminders
could not be sent because the responses were treated confidentially and the author
would not know which companies completed the questionnaire and which companies
did not attempt it.
34
3.4.1.2 Questionnaire data analysis

The online questionnaire was left open for two months and by the closing date
50 responses were gathered. The raw data was exported as a spreadsheet from the
online survey website to be analysed using the statistical software – IBM SPSS Statistics
22. Significant changes to the raw data needed to be done by the author in order for
the statistical software to be able to process the data. Every text response had to be
changed to a numerical figure following the format of 1 = affirmative (yes), 2 =
negative (no) for the multiple choice responses, whilst numbers from 1 to 5 were used
for the Likert scale to indicate the strength of preference for the answers chosen. This
had to be done for each of the 21 questions the survey had.
Once the data was made SPSS-ready, interpretation of the survey data
commenced. Sums, counts and averages were calculated on the responses obtained,
and cross-tabulation and pivot tables were used to help infer any relationships
between variables and allow for a better discussion to emerge. Tabulated results,
charts and graphs were also created to support the research findings and allow the
reader to understand better the figures attained.
3.4.2 Qualitative research method – Semi-structured Interviews

The author also chose semi-structured interviews since they allow the
interviewer to “pursue specific issues of concern that may lead to focussed and
constructive suggestions” (Thomas, 2010, p.314). Valuable information can be
obtained through just a few number of interviews conducted. In semi-structured
interviews, the interviewer has a set of open and close-ended questions on hand for
direction, but the actual questions asked and the inquiries made depend on the
natural progression of the interview itself (Thomas, 2010, p.315). Ultimately, semi-
structured interviews “allow the respondent more freedom to answer the question,
and the researcher more freedom in the way they ask it” (Hayes, 2000, p.121). The
author had themes and ideas of discussion planned before the interview commenced,
but other matters not specifically included in the interview question sheet were also
35
deliberated if the participants during the interview believed they were relevant to the
topic at hand.
Five interviews were set up to gain more detailed insight on the software
selection and review processes of the AIS, over and above the data acquired from the
questionnaire sent out. Similar topics as those explored in the questionnaire were
discussed, although during interviews it was possible to follow-up the questions with
further inquiries – something which is not possible through questionnaires. A sample
of the semi-structured interview questions can be found in Appendix 2. Due to being
semi-structured, questions were changed and adapted as the author saw fit during the
interviews to probe interviewees and acquire a richer information set.
3.4.2.1 Interview data collection

The author recorded each interview with the consent of the interviewee in
order to eliminate the need for excessive note taking during the conduct of the
interview itself. Note taking requires fast typing whilst also listening and engaging with
the interviewee, and this skill does not come naturally to some people. Recording the
interview eliminates the need for this balance between typing and listening and allows
the interviewer to discuss the topics presented more calmly. After each interview was
concluded, the author transcribed the interview verbatim by listening to the recording
taped earlier. Separate files for each interview transcript were kept, with the relevant
details such as the date and interviewee name and job position listed so as to facilitate
data analysis later on.
3.4.2.2 Interview data analysis

Coding categories were developed in order to analyse the interview data.
Similar responses are highlighted and labelled according to the topic or theme they are
referring to, and these categories are used to evaluate any emerging patterns the
respondents gave in their replies. Common themes or deviations are then identified
and discussed. There are many different types of coding categories which can be used,
36
including setting/context codes, activity codes, situation codes, event codes, strategy
codes, and relationship codes, amongst others (Bogdan and Biklin, 1998). Many of
these coding categories were used by the author to analyse the data acquired from the
interviews and ultimately allow intuitive comparisons and contrasts between the
different interview replies and the available literature.
In the end, both interview and survey responses were brought together and
viewed holistically in order to give valid interpretations and draw conclusions from
both sets of data collectively.
3.5 Limitations of the study

The author acknowledges that all studies will face certain limitations, and it is
important to describe and explain them in order to inform other researchers, and also
to present an opportunity for such problems faced to be overcome in future research.
The limitations identified in this dissertation are the following:
 Low response rate envisaged for questionnaires – locally, the response rate
tends to be quite low, especially if the questionnaire explores sensitive or
confidential issues (even if respondent anonymity is present), and this problem
is exacerbated the more time consuming it is to fill in the questionnaire. The
author tried to overcome this limitation by sending out the questionnaire to a
large sample size (267 firms) in the hopes of obtaining a relatively large number
of replies required for meaningful interpretation, given the expected low
response rate. From 267 firms, 50 firms completed the questionnaire, a
response rate of 18.73%.
 Disadvantages of simple random sampling – this sampling method could

potentially result in a sample which is not representative of the population,
known as sampling error. The probability of sampling errors increases as a
smaller sample size is used. Hence, this was another reason for using a large
37
sample size. Due to certain industry categories containing more firms than
other categories on the Malta Enterprise website, the total responses collected
might not reflect the actual distribution of firms in the local economy, in
respect of the industry they are competing in.
 Difficulty of reaching out to firms for interviews – although ten firms were
contacted to schedule interviews, only five firms finally agreed to an interview
after numerous reminders were sent. This could be due to the subject matter
of this dissertation, or perhaps because of the perception that interviews are
time consuming.
 Limitations of interviews – additionally, particular details about the firm’s AIS

could only be established during the interview itself, and thus there was a
possibility that certain interviews could be irrelevant for this dissertation’s
purposes. For example, if a firm with whom the author conducted the interview
remarked that it had never changed its AIS, and that no one within the
company had anything to do with the purchase of the current AIS in operation,
it would be difficult to obtain any meaningful information for this research
project’s purposes. As such, these details were communicated via e-mail before
the interviews commenced. Furthermore, the presence of the interviewer (the
author) and the use of a consented voice recorder during the interview could
also potentially influence the information obtained as the interviewees may not
be comfortable knowing that they are being taped.
38
3.6 Conclusion
This methodology chapter has thoroughly explained the process the author
went through – the initial decision for using a mixed methodology in achieving the
dissertation objectives, the actual research methods utilised, and the stages
incorporated into each research method from data collection to data analysis. The
author believes that through the methodology employed it was possible for the
objectives of this research project to be met. Furthermore, the limitations of this study
were defined and the actions taken to overcome them were also identified. In the next
chapter, the data obtained from the interviews and the questionnaires are disclosed,
interpreted and discussed.
39
CHAPTER 4 – FINDINGS AND DISCUSSION
Chapter 4 Findings and Discussion
4.1 Introduction
This chapter presents the findings and their evaluation, obtained from the data
analysis of 50 questionnaires and 5 interviews which the author conducted. In order to
achieve the dissertation objectives set out in Chapter 1 – Introduction, the findings are
presented and then subsequently discussed. First, the author gives a general overview
of the structure of AISs in Malta. The software selection process for AISs is evaluated,
and the firms’ satisfaction with such systems is then examined. Finally, the author
identifies any areas for improvements sought by Maltese firms in their AISs.
4.2 General overview of Accounting Information

Systems in Malta
Data was gathered to obtain a general overview of the respondents’
demographic and the AIS structure used by Maltese firms, such as the respondents’
job position, company size and the industries the firms compete in, the types of
accounting software present in Malta, and the most commonly used software
modules.
4.2.1 Job position and user role

The 50 survey respondents comprised of people holding various job positions.
This is represented graphically in Figure 4-1.
The biggest percentage of respondents were in the ‘other’ category (34.0%)

who were mostly people who held a job position related to accounting or finance,
including accountant executives (2), financial advisors (2), accounts officers (2), and a
financial controller assistant (1), amongst others. The rest of the job positions held by
the respondents who marked the ‘other’ category can be found in Appendix 3.
The second biggest category were accountants (20.0%), followed by financial

controllers (14.0%) and business owners (14.0%).
41
Figure 4-1 Respondent job position
Although there was a category available for accountants and managers, some
respondents still marked the ‘other’ category to describe their job titles (such as
“accounts officer” and “tax manager”). This was likely done to provide the researcher
with more accurate information, and also perhaps to indicate a lack of a professional
warrant in the case of the respondents who wrote down their job title as “accountant
trainee”, as shown in Appendix 3.
Of the 5 interview respondents, 3 were accountants, 1 was a financial

controller, and 1 was an IT business analyst.
43 of the survey respondents were software users (86.0%), followed by 4

system designers (8.0%) and 3 IT specialists (6.0%), shown in Figure 4-2.
42
Figure 4-2 Users of the accounting software
Role in using the accounting software No. of respondents %

Software User 43 86.0
System Designer 4 8.0
IT Specialist 3 6.0
Total 50 100.0
4.2.2 Industry classification

The 50 survey respondents were from 14 different industries as is shown in
Figure 4-3.
The majority of the survey respondents were from the financial and business
services sector (52.0%), followed by the manufacturing sector (10.0%) and the
hospitality services sector (8.0%).
Figure 4-3 Industry sectors
Industry No. of respondents %

Building and construction 2 4.0
Consulting services 2 4.0
Education 2 4.0
Financial and business services 26 52.0
Healthcare and pharmaceuticals 1 2.0
Hospitality services 4 8.0
Manufacturing 5 10.0
Media and advertising 1 2.0
Retail 1 2.0
Shipping and marine 2 4.0
Electrical/mechanical services 1 2.0
Entertainment 1 2.0
Estate agency 1 2.0
Importations to industry 1 2.0
Total 50 100.0
The 5 interview respondents were all competing in the services industry;

insurance, real estate, legal, hospitality, and consultancy services.
43
4.2.3 Business size

44.0% of the survey respondents were small companies, followed by 30.0%
micro companies, 18.0% medium-sized companies, and 8.0% large companies.
3 of the interview respondents were small companies, whilst the consultancy

and real-estate services firms are categorised as medium-sized companies.
The business size categories for Small and Medium Enterprises (SMEs) were
taken from The new SME definition: User guide and model declaration (2005)
represented in Figure 4-4. The size threshold for large firms was taken to be more than
250 employees and a turnover greater than €50m.
Figure 4-4 SME thresholds
Company Employees Turnover

Medium < 250 ≤ € 50 m
category
Small < 50 ≤ € 10 m
Micro < 10 ≤€2m
4.2.4 The use of Computerised Accounting Systems

4 survey respondents (8.0%) do not use CASs, while the rest of the respondents
(46 respondents, 92.0%) all make use of modern CASs.
In line with literature, MAS users make up a very small proportion of today’s
accounting system users (Bagranoff, 2010; Hall, 2011). This is due to the need for fast
and efficient systems to remain competitive in today’s business environment, and also
due to the availability of inexpensive information technologies. As such, the
overwhelming majority of AISs today make use of CASs.
The automation of the accounting system brings about some very evident
benefits to the users and to the business organisation, such as decreases in processing
time, increases in efficiency, and more thorough and comprehensive information sets
for decision making, amongst the many other advantages of computerisation.
44
Figure 4-5 shows the proportion of firms which do not make use of CAS.
Figure 4-5 Respondents who use MASs
Business size Count %

Micro 1 25.0%
Small 3 75.0%
Medium 0 0.0%
Large 0 0.0%
Respondents who still make use of a manual system are all employed in micro
or small firms. It would be inconceivable for medium-sized or large firms to be able to
process huge volumes of data in a timely manner whilst still using a MAS.
On the other hand, micro and small firms, where perhaps transactions are low
in volume, the production of reports are not complex, and management accounting
information can still be presented and analysed within a reasonable time frame even if
documented manually, may not need to make use of CASs. As such, a MAS may still be
adequate for the business purposes of a firm of a smaller size. In fact, this was the
most common reason given by the 4 survey respondents for not using a computerised
system, depicted in Figure 4-6.
45
Figure 4-6 Using a MAS
However, the majority of micro and small firms use CASs – only a minority use
MASs. The survey results show this with 93.3% of micro firms and 86.4% of small firms
using a CAS, shown in Figure 4-7.
Figure 4-7 Breakdown of firms using CASs or MASs
Business size No. of firms using CAS % No. of firms not using CAS %
Micro 14 93.3% 1 6.7%
Small 19 86.4% 3 13.6%
Medium 9 100.0% 0 0.0%
Large 4 100.0% 0 0.0%
46
4.2.5 Separate or integrated accounting systems

From the 46 survey respondents who use a CAS, 32 (69.6%) use stand-alone
software for running accounting operations, whilst 14 (30.4%) stated that the
accounting software is part of a larger system.
2 of the interview respondents use a separate software package for accounting

purposes, while the other 3 respondents use accounting software which is integrated
within a larger system.
ERP systems are an example of CASs which are part of a larger system. These
are used to integrate a firm’s business processes together, which facilitate data and
information sharing throughout the organisation. Integrated systems are usually more
complex than stand-alone accounting software, allowing the system to be moulded to
a business’ requirements. The advantage of this is that sophisticated customisations to
the system are possible (although they can be expensive), but the drawback is that
these customisations may present many technical and IT issues. Particular software
functions may stop working after introducing new functions due to these technical
conflicts, for example.
In the study by Ivancevich et al. (2010, p.71), the researchers concluded that
ERP systems were most likely to be adopted by larger firms. In fact, the survey carried
out by the author shows that 75% of large firms have their CAS as part of a larger
system, whilst the majority of micro (85.7%), small (73.7%), and medium-sized (55.6%)
firms have a stand-alone CAS, as shown in Figure 4-8.
Figure 4-8 Firm size and count of different types of accounting systems
Business size Stand-alone systems % Part of a larger system %

Micro 12 85.7% 2 14.3%
Small 14 73.7% 5 26.3%
Medium 5 55.6% 4 44.4%
Large 1 25.0% 3 75.0%
47
It makes sense that ERP systems are adopted by larger firms due to their high
cost, and also due to their customisability, which is not usually a prerequisite for
smaller firms which can adequately manage their business with more straightforward
stand-alone off-the-shelf software.
4.2.6 Acquiring the accounting system

The majority of the survey respondents (34) who made use of a CAS purchased
their software off-the-shelf (73.9%), 9 bought custom or bespoke software tailored to
their business’ needs (19.6%), whilst 3 respondents developed their own accounting
system in-house (6.5%).
All 5 interview respondents had purchased off-the-shelf software, which in

some cases was tailored to certain business requirements through add-ons or
amendments.
The overwhelming majority of the respondents acquired turnkey systems (i.e.

off-the-shelf systems) designed to fit most companies within a certain sized category.
These are usually the cheapest option available, in contrast to custom/bespoke
software tailored to a specific business’ needs which tend to be much more expensive.
Despite the fact that off-the-shelf software is bought as is, certain modifications can
still be done to add an element of customisability to the software as per the needs of
the firm. Purchasing off-the-shelf software does not necessarily lock the company
within a certain size threshold i.e. if the company expands, the off-the-shelf software
can, in some cases, scale to the business’ size. This is possible through purchasing more
user licenses for the system, for example.
48
4.2.7 Types of accounting software

The majority of the survey respondents (43.5%) use Sage as the accounting
software for their AIS, followed by the ‘other’ category (21.7%), where the specific
software used for the latter can be found in Appendix 4. 6 of the respondents (13.0%)
developed their own software or purchased custom/bespoke software. All the
accounting software choices can be found in Figure 4-9.
Figure 4-9 The accounting software used by the respondents
Accounting software No. of %

Respondents
Developed in-house or bespoke/custom software 6 13.0
Access software (provided by Philip Toledo Ltd.) 1 2.2
Microsoft Excel 2 4.4
CaseWare 1 2.2
Sage 21 45.7
Shireburn 3 6.5
Microsoft Dynamics AX 1 2.2
Microsoft Dynamics NAV 1 2.2
Other (Appendix 4) 10 21.7
Total 46 100.0
The software used by the interview respondents comprises of Sage Line 50,
Microsoft Dynamics NAV, Technosoft, Shireburn Financial Manager and 6PM’s Ace
software.
There was a wide distribution of different accounting software used by the

survey and interview respondents, with 23 various types of accounting software listed
in total (17 off-the-shelf and 6 in-house, bespoke or custom systems).
49
4.2.7.1 Common accounting software modules

The survey respondents were asked to list the software modules that they use.
The most common software modules used were general ledger (82.6%), accounts
payable (80.4%), accounts receivable (73.9%), sales invoicing (47.8%), billing (47.8%)
and fixed assets (41.3%). All the software modules chosen are depicted graphically in
Figure 4-10.
Figure 4-10 Count of accounting software modules
All the interview respondents mentioned the same accounting modules which
they most commonly use, specifically, the general ledger, accounts payable, accounts
receivable, and the cash/bank book.
The most common software modules which the author’s survey and the
interview findings show are in line with Mattingly’s (2001, p.49) list of the most
common functions usually included in accounting systems, namely, the general ledger,
accounts payable, accounts receivable, and sales invoicing.
50
Unsurprisingly, the general ledger module is the most common accounting

module considering that it is virtually used by most firms in their accounting. It is
curious however that not all respondents who have a CAS make use of an automated
general ledger module. It is unclear whether the respondents who did not mention
that they have a general ledger module instead input the data manually, or perhaps
their accounting system is integrated with other systems (such as in the case of an ERP
system) and it is not formally known as a general ledger module – but another
software module could essentially have the same functions.
4.3 The software selection process for Accounting

Information Systems
Data was obtained through surveys and interviews to identify and evaluate the
accounting software selection procedure by Maltese firms.
4.3.1 Users involved in the decision

76.1% of the 50 survey respondents mentioned the involvement of senior
management in the software selection process, followed by 52.2% of the respondents
who said that the finance and accounting departments also take part in the decision,
with IT staff (21.7%) and business consultants (19.6%) trailing behind. This is depicted
in Figure 4-11.
51
Figure 4-11 Count of users involved in the accounting software purchasing decision
26 out of the 46 survey respondents (56.5%) were not involved in the software
selection decision. 4 out of the total 50 survey respondents did not respond to this
question as they did not make use of a CAS.
All 5 interview respondents highlighted the importance of the involvement of

the accountant and top management in the software purchasing decision.
Part of the AIS is the MRS, which is used by management to take internal
decisions, as Hall (2011, p.10) explained, so it is understandable that senior
management would be the most common personnel to take part in the software
purchasing decision. Bagranoff et al. (2010) explained that the organisational goals
should be identified and understood in order to develop or purchase a system which
meets such goals. Hence, senior management are the most qualified employees to
take such decisions.
52
The second largest category of personnel assisting in the software purchasing

decision, the finance and accounting departments, are required in order to give
technical advice on the most adequate accounting system the firm requires. It makes
sense that accountants offer advice on an accounting system seeing as the AIS should
be designed for the needs of its users – where accountants are one of the main users
of such a system.
4.3.2 Decision support tools

The 5 interview respondents were asked what decision support tools they
utilised in the software purchasing decision. 2 respondents said that it was entirely an
internal decision to opt for the software they purchased, advocated by their
accountants who had prior experience in using the software. Another respondent held
discussions with other firms in the same line of business to determine what the most
commonly used software was in the industry they competed in. 2 other respondents
made consultations with different software vendors who tried to sell them their
product. The choice was narrowed down to the software which best fit the business
requirements, and then selected on the basis of functionality, price, and the long-term
software vendor relationship.
The software purchasing decision was always taken by a team of people

incorporating the ideas and needs of various users within the firm, which is consistent
with the advice given by Basile et al. (2002). This is very important as it eliminates, or
reduces to a great extent, any possible future problems the users might have with the
system. Although neither formal decision support techniques (Oliver, 1994; Lin et al.,
2005; Maheshwari and McLain, 2006; Bagranoff et al., 2010) nor automated software
programs (Basile et al., 2002) to aid in the software selection were used (like the ones
identified in the literature review), similar rationale in the decision making process was
still present i.e. identifying that a change was needed, what was needed, and then
deciding on how to go about in making the change to the software.
53
4.3.3 Importance of the software categories

The 50 survey respondents were asked to indicate their preference for certain
software categories when purchasing the accounting software. The mean ratings of
the importance of the software categories were obtained. A rating of 1 indicates that
respondents felt the factor category in question is not important to take into
consideration when purchasing accounting software, whilst a rating of 5 indicates that
the respondents felt that the factor category is very important in this decision. 46
respondents answered this question as the remaining 4 respondents do not make use
of a CAS.
As shown in Figure 4-12, the highest rated software category was the
functionality of the software (4.76), followed by vendor stability and support (4.30).
The cost of the software was ranked as the least important factor when purchasing
accounting software (3.93).
Figure 4-12 Mean ratings of the major software categories
Major software categories Mean Rank

The functionality/capability of the software 4.76 1
Vendor stability and support rating
4.30 2
Cost of the software 3.93 3
The results obtained from the author’s survey mirror the rankings obtained in
the survey by Ivancevich et al. (2010). One difference between the two surveys is that
in the survey by Ivancevich et al., vendor stability and vendor support were separated
into two categories. Although separated, they achieved nearly an identical score, and
the rest of the software categories still attained the same ranking order as in Figure 4-
12.
The functionality of the software is a factor category understood as being vital

in the software purchasing decision, and this has been confirmed in prior research
(Raghunathan and Wobser, 1995; Rushinek and Rushinek, 1995; Ivancevich et al.,
2010).
54
4.3.3.1 Importance of the software features within the major software

categories
The respondents indicated the importance of the software features within the
major software categories in the software purchasing decision. The mean ratings
obtained from the survey were on a scale from 1 to 5, where 1 relates to “not
important” and 5 relates to the software category being “very important”.
4.3.3.1.1 The functionality/capability of the software

Figure 4-13 shows the mean ratings of the functionality and capability software
category from the survey.
The most important functionality and capability features of the software were
security (4.63), user friendliness (4.52), and the ability of the software to deal with
changes in the financial legislation (4.39). Graphics features, such as charts and graphs,
was the lowest rated software feature (3.15).
Figure 4-13 Mean importance rating of the functionality/capability of the software
Software features Mean Rank

Security features 4.63 1
User friendliness 4.52 2
Ability of the software to deal with changes in financial 4.39 3
legislation
Flexibility/customisation 4.22 4
Upgradability 4.13 5
Handling of transaction volume 4.04 6
Integration with the current system 4.04 6
Handling of transaction complexity 3.96 7
Possibility for future expansion 3.91 8
Report-writing functions 3.87 9
Graphical features 3.15 10
Security features rank at the top of the list as it is crucial that an AIS, or any IS
for that matter, must be protected from unauthorised access since the system
contains confidential and business sensitive information.
55
User friendliness is also important because users want an intuitive interface

which they can easily learn how to use – and this also reduces training time and costs.
This factor category was also identified as a fundamental selection criteria in various
studies (Raghunathan and Wobser, 1995, p.24; Ivancevich et al., 2010).
Since financial legislation can be frequently amended, the software should be

able to deal with any such changes which will affect the output produced by the AIS. If
the system does not allow alterations of tax rates, for example, another burdensome
task of converting the numbers to reflect the updated tax rates would be required.
More complex issues such as having different cross-border rates, VAT exemptions and
third countries can also be provided for as long as the system can cater for such
sophistications. Firms who deal with many foreign clients would especially need a
system which has these functions. Certain locally developed accounting software also
allows the printing of reports which are compliant to Malta’s regulations (e.g. FS3 and
FS5 documents printed and sent to the IRD). This aids in decreasing non-value adding
processing time as the accountant does not need to rewrite the details from the
system onto the legal documents, since the software fills them out automatically. Due
to the clear benefits of these functions they are very important for firms searching for
new accounting software.
The capability of the software to produce graphical representations of the data

was ranked as the least important factor in the software purchasing decision. In the
study by Ivancevich et al. (2010), this software feature was also considered as one of
the least important factors. Respondents might feel that production of graphs and
charts to facilitate data analysis is not really an important function.
4.3.3.1.2 The cost of the software

The mean ratings of the cost of the software from the survey are found in
Figure 4-14. The initial purchasing cost (3.98) and installation costs (3.98) tied as the
highest ranked features of cost of the software, followed by training costs (3.93) and
the annual operating cost (3.80).
56
Figure 4-14 Mean importance rating of the cost of the software

Initial purchasing cost 3.98 1
Installation costs 3.98 1
Training costs 3.93 2
Annual operating cost 3.80 3
2 interview respondents highlighted the importance of the cost of the system

and that it was a top priority in their search for accounting software. It was the first
aspect which they took into account, especially for the respondent who changed the
accounting software due to the ever increasing yearly maintenance agreement. On the
other hand, 2 other respondents stated that the cost of the software was not
important. In fact, irrespective of the cost, they went for a system which had the
features they were looking for i.e. the functionality of the software here was a top
priority, and in fact the system they opted for was quite expensive. 1 other respondent
said that the system they purchased was economical, given its features, but the price
did not play a role in their software selection.
In the author’s survey, the cost of the software was ranked as the least
important software category. This finding coincides with the results of other studies
i.e. the cost of the accounting software is not determined to be important in the
software selection process (Raghunathan and Wobser, 1995; Bressler and Bressler,
2006; Ivancevich et al., 2010). The initial purchasing cost, which can be seen as a
capital investment, is usually the criteria that respondents find to be the most
important within the cost category. This is perhaps due to it being of substantial
monetary value, although other research has shown that it is the on-going yearly
system expenditure which ends up being the most expensive, and not the initial cost
(Bagranoff and Simkin, 1992).
Despite being ranked as the least important cost-factor category in the survey,
the annual operating cost, also known as the maintenance agreement, will still have an
effect on the purchasing decision. Increasing maintenance fees, for example, will make
some software choices unsustainable in the longer term.
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4.3.3.1.3 The software vendor’s stability and support

Figure 4-15 presents the means of the vendor stability and support software
category from the survey.
The most important vendor stability and support features of the software were
technical support (4.30), the reputation of the software vendor (3.93), and the testing
of the software by the software vendor itself (3.78). The time elapse required to roll
out to the new software was ranked as the least important vendor stability and
support feature (3.57).
Figure 4-15 Mean importance rating of the software vendor’s stability and support

Technical support and documentation 4.30 1
Software vendor reputation 3.93 2
Vendor software testing 3.78 3
Training by software vendor 3.76 4
Time elapse required to roll out to the new software 3.57 5
All 5 interview respondents emphasised the importance of having a reputable

software vendor to ensure a strong vendor relationship. 3 respondents highlighted
that having a software vendor which is based locally in Malta is also highly valued in
the software selection decision.
Although many research studies feature the software vendor as an integral part
of the software selection decision (Rushinek and Rushinek, 1995; Collins, 1999; Little,
2006), other studies suggest that it is not quite as important as it is made out to be
(Elikai et al., 2007; Ivancevich et al., 2010). Due to this slight controversy it was
thought that such an area should thus be explored. Vendor stability and support was
found to be the second most important factor in the software selection decision from
the results of the author’s survey, and it was reiterated by every interview respondent
that the vendor relationship is a vital component in any successful AIS.
The survey respondents view technical support and documentation as being

important due to the problems which always eventually arise out of any system.
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Documentation such as manuals aid in understanding the problem, and technical

support from the vendor can help in solving it.
The software vendor’s reputation is also vital as a non-reputable vendor could

mean getting stuck with an obsolete system or receiving poor support. The reputation
of the software vendor gives you a guarantee of quality. Looking at the firms the
software vendor provides its services to, one can get a good idea of the size of the firm
the software is capable of handling. This thus ensures that if the business expands in
size, the same software vendor can be used, avoiding having to undergo the lengthy
software selection procedure once again.
The location of the software vendor also aids in enhancing the strength of the
vendor relationship. Having technicians who can solve problems at the firm’s premises
in person is more welcome than solving problems on-line or through the phone. In the
case of communication through the phone, foreign software vendors can cause issues
such as misunderstanding of problems due to language barriers. For example, this is
the case for firms who have purchased their software from vendors in non-English
speaking countries.
4.4 Satisfaction with the Accounting Information System

The survey and interview respondents were asked to state their satisfaction
towards certain software categories of the AIS. These findings were obtained to assess
whether firms in Malta are satisfied with their AISs.
4.4.1 Satisfaction with the accounting software

In general, all 5 interview respondents were satisfied with their accounting
software, although there are some areas with which they are not very satisfied. 1
respondent mentioned that the system takes a long time to issue a report, and
another respondent stated that although they are now very satisfied with the system
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they have today (through the various add-ons installed), it took a number of months
before everything fell into place, and this wasted both time and resources.
46 survey respondents rated the individual software categories according to

the perceived satisfaction with each category. The mean ratings obtained for
satisfaction were on a scale from 1 to 5, where 1 relates to “not satisfied” and 5 relates
to the respondents being “very satisfied” with the software category.
4.4.1.1 The functionality/capability of the software

The mean ratings obtained from the survey for the functionality and capability
of the software are presented in Figure 4-16. The areas respondents felt the most
satisfied with were security (3.96), handling of transaction volume (3.91), and handling
of transaction complexity (3.87). The areas respondents indicated as being the least
satisfied with included report-writing functions (3.52) and the possibility for future
expansion (3.52).
Figure 4-16 Mean satisfaction rating of the functionality/capability of the software

Integration with the current system 3.72 5
Upgradability 3.70 6
Ability of the software to deal with changes in financial legislation 3.63 7
Graphics features 3.61 8
Possibility for future expansion 3.52 9
Functionality/capability of the software 3.73 1
Respondents were satisfied with the security features of the accounting

software, an aspect of the system which is important in order to limit access only to
those authorised users. The software’s ability of handling both transaction complexity
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and volume is vital for firms which deal with large amounts of non-standardised data.
A lack of satisfaction in these areas would mean that the software is not able to deal
with the current business processes, and as such would be seen as ineffective and
unproductive.
The report-writing functionality of the software, although an important feature

across many accounting systems, was ranked at the bottom of the satisfaction list. The
study by Ivancevich et al. (2010) also found that while respondents value the report-
writing ability of the software highly, it was a feature which respondents are not
satisfied with. As such, improvements are needed in this area.
4.4.1.2 The cost of the software

The mean ratings for the cost of the software obtained from the survey are
shown in Figure 4-17. The initial purchasing cost (3.76) was the highest ranked area of
satisfaction. Training costs (3.57) were an area where respondents perceived the
lowest levels of satisfaction with.
Figure 4-17 Mean satisfaction rating of the cost of the software

Initial purchasing cost 3.76 1
Installation costs 3.72 2
Respondents were satisfied with the price of the accounting software and the
subsequent installation and annual operating costs, but were less satisfied with the
costs incurred to teach the users how to use the new system. Training costs can be
substantial if the system is less intuitive than the previous system which was installed,
thus requiring considerable time and money to educate the workforce. Annual
operating costs are most often agreed upon beforehand and as such they can be
budgeted more accurately by the firm. This also holds true for the initial purchasing
and installation costs.
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4.4.1.3 The software vendor’s stability and support

Figure 4-18 shows the survey respondents’ mean satisfaction ratings with the
software vendor’s stability and support. The highest areas of satisfaction with regards
to these aspects were the software vendor’s reputation (3.78) and the technical
support and documentation provided by the vendor (3.61). Vendor software testing
(3.41) and the training provided by the vendor to the users of the AIS were areas
respondents felt the lowest levels of satisfaction with.
Figure 4-18 Mean satisfaction rating of the vendor stability and support

Software vendor reputation 3.78 1
Time elapse required to roll out to the new software 3.59 3
Vendor software testing 3.41 5
Vendor stability and support 3.56 3
The respondents’ satisfaction with the software vendor is an indication that

there is a healthy vendor relationship between the firm and the software vendor. This
is crucial for solving any potential problems with the system.
4.4.1.4 Comparison with the most important software categories

From the survey, the areas of most importance in the software selection
decision were compared to the areas of satisfaction, as shown in Figure 4-19.
Figure 4-19 Comparison of mean ratings between areas of satisfaction and areas of
importance
Software categories Mean Mean

satisfaction importance
Functionality/capability of the software 3.73 4.76
Cost of the software 3.69 3.93
Vendor stability and support 3.56 4.30
The functionality of the software, which was the most important aspect for the
respondents in the software selection decision (4.76), was also the area that the
62
respondents were most satisfied with (3.73). This is perhaps due to the time and effort
devoted in researching for accounting software which gives importance to this factor
category, so the respondents chose accounting software which met their
requirements, and hence they are most satisfied with the functionality and capability
of their software.
Software which does not meet the user’s needs will cause problems and
frustration, ultimately leading to low levels of satisfaction felt towards the system. This
could have been the case with the software vendor’s stability and support. Although it
is an important software category (4.30), it was the area which gave the least
satisfaction to the respondents (3.56). This could indicate that an incorrect choice of
software vendor, and consequently, an incorrect software choice, was made.
4.4.1.4.1 Comparison with the most important software features

From the survey results, the areas of satisfaction with the software after it was
purchased were compared with the areas of importance in the software selection
decision, represented in Figure 4-20.
Security features were rated as the most important factor (4.63), and it was
also the area which respondents rated that they were the most satisfied with (3.96).
Training by the software vendor was one of the areas which respondents felt
the least satisfied with (3.43), but it was also the area which was of lowest importance
(3.76).
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Figure 4-20 Mean ratings of satisfaction compared with the importance of the
software categories in the software purchasing decision
Rank Highest satisfaction ratings Highest importance ratings

1 Security features (3.96) Security features (4.63)
2 Handling of transaction volume User friendliness (4.52)
(3.91)
3 Handling of transaction complexity Dealing with changes in financial
(3.87) legislation (4.39)
Rank Lowest satisfaction ratings Lowest importance ratings
1 Vendor software testing (3.41) Training by software vendor (3.76)
2 Training by software vendor (3.43) Time elapse required to roll out to the
new software (3.57)
3 Report-writing functions (3.52) Graphical features (3.15)
Due to security features being ranked at the top of both lists, it can be said that
respondents consider that the integrity of the data in the AIS is safe from unauthorised
access.
The training given by the software vendor was not an area of high importance
for the respondents, and perhaps consequently it was an area which yielded the
lowest satisfaction for them. If more importance is given to this category before
selecting the software, firms might choose accounting software where adequate
training is part of the package sold by the vendor, ultimately leading to high
satisfaction with this factor category – possibly even resulting in a smoother
changeover to the new system if the users are trained competently.
4.4.2 Business size and satisfaction

The satisfaction or dissatisfaction with the software categories from the survey
were broken down by company size in order to determine if there are any differences
between size and satisfaction within the factor categories.
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4.4.2.1 Highest levels of satisfaction

Figure 4-21 ranks the highest levels of satisfaction by company size. Survey
respondents from micro firms are satisfied with the security features (4.29) of the
software and the annual operating cost (4.14), followed by the user friendliness of the
system (4.07). Respondents from small firms are mostly satisfied with the smoothness
of the integration between the new and the old system (3.95), and the handling of
transaction volume (3.89). Again, security features (3.89) were ranked amongst the top
3 areas of satisfaction. Medium-sized firms are satisfied with the upgradeability
capabilities of the system (3.89), the initial purchasing cost (3.89) and the installation
costs (3.78) of the system.
Figure 4-21 Highest mean satisfaction ratings by company size
Rank Micro Small Medium

1 Security features (4.29) Integration with the old Upgradeability (3.89)
system (3.95)
2 Annual operating cost Handling of transaction Initial purchasing cost
(4.14) volume (3.89) (3.89)
3 User friendliness (4.07) Security features (3.89) Installation costs (3.78)
Micro firms’ satisfaction with the annual operating cost might stem from the
fact that accounting software for very small companies is usually quite inexpensive.
This was also confirmed by 1 interview respondent who explained that the yearly
upgrades for small systems are relatively cheap and are not matters of high concern
for them. Small firms are more concerned with getting information on expenditure,
revenues and cashflows, as well as utilising the software for basic reporting purposes.
Small businesses do not need to make use of complex high-end accounting software.
User friendliness is also an area which gives respondents from micro firms high
satisfaction. This makes sense since micro firms require intuitive systems as they do
not afford to invest too much money in training costs and technical support.
The upgradeability of the software is important in order to improve the

performance of the system, and also for general bug fixing and troubleshooting. The
satisfaction medium-sized firms’ have with the upgradeability of the software is
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important as upgrades need to be done periodically without disrupting the business

processes. Thus, smooth upgrades allows the business to resume its operations quickly
whilst enjoying the benefits of a more efficient system.
4.4.2.2 Lowest levels of satisfaction

Figure 4-22 ranks the lowest levels of satisfaction by company size. Vendor
software testing (3.43, micro; 3.26, small), training by the software vendor (3.50,
micro; 3.26, small), and report-writing functions (3.37, small; 3.22, medium) were
amongst the lowest rated areas of satisfaction by firms of all sizes.
Figure 4-22 Lowest mean satisfaction ratings by company size
Rank Micro Small Medium

1 Vendor software testing Training by software Integration with the
(3.43) vendor (3.26) old system (3.11)
2 Technical support and Vendor software Possibility for future
documentation (3.43) testing (3.26) expansion (3.11)
3 Training by software Report-writing Report-writing
vendor (3.50) functions (3.37) functions (3.22)
Micro and small firms stated that vendor software testing and the training by
the software vendor as two of the factor categories they are the least satisfied with.
This indicates that these types of firms might not be content with their vendor
relationship. Unsatisfactory training might be given to the users and the testing done
might not be thorough enough.
Medium-sized firms could be looking to increase their business size in the

future and would thus try to choose accounting software which is scalable to their
operations. Selecting the appropriate software should enhance the users’ satisfaction
with it knowing that any changes in the business structure in the future can easily be
accommodated for. However, the low satisfaction respondents feel towards this factor
category is an area for concern. If it is not possible for the software to expand to
accommodate changes in size, businesses will have to go through the lengthy software
66
selection procedure once again in order to choose accounting software which is

capable of integrating with the new business size.
4.4.3 Changing the accounting system

All 50 survey respondents were asked if there was any intention to change the
current accounting system, depicted in Figure 4-23. 64.0% replied that there was no
intention to change the current accounting system, 14.0% indicated that there was an
intention to change the accounting system within one year, and 22.0% stated that
there is an intention to change the accounting system within the next 5 years.
Figure 4-23 Intention to change the current accounting system
3 interview respondents do not have any future plans for their system, and
they also have no intention to change it as they find that its performance is
satisfactory. 1 respondent is migrating towards a new system in order to integrate all
business processes under a Customer Relationship Management (CRM) system.
Although this would mean that it would not be having stand alone accounting software
67
anymore, the new CRM system would have accounting features of its own. Another
respondent will also be moving towards an integrated portal system, where clients will
have access to this system by logging in online and viewing the progress on certain
jobs, in order to enhance the customer relationship.
The majority of the respondents do not have plans to change the accounting
system, and they should thus be satisfied with it. To determine if the respondents who
are satisfied with their system have no intention to change it or not, the mean
satisfaction ratings for each category were obtained, represented in Figure 4-24.
Respondents with the intention to change the accounting system within one year had
the lowest mean satisfaction rating (3.10), followed by the respondents who had the
intention to change the accounting system within the next 5 years (3.44). Respondents
who had no intention to change the current accounting system obtained the highest
mean satisfaction rating (3.83).
Figure 4-24 Mean satisfaction ratings of the respondents’ intention to change the
accounting system
Changes within Changes within the No changes

one year next 5 years
Mean satisfaction 3.10 3.44 3.83
rating
The results seem logical as firms who are satisfied with the performance and
output of their accounting system would not see any reason to change it.
4.5 Areas for improvement

Respondents were asked to state if the accounting system is periodically
reviewed and to identify whether any changes were deemed necessary to improve
their AIS. These findings were obtained to identify any areas for improvement in AISs
in Malta.
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4.5.1 Improvements expected from the accounting software

4 interview respondents stated the improvements they would like to see in
their accounting system. 1 respondent wants more technical control over the system
in order to be able to make any necessary system changes internally, without resorting
to getting help from the software vendor. On a technical note, 1 other respondent
claimed that making use of certain complex computer features can be frustrating for
an employee who is not technologically adept, and as such they would like their
system to be more user friendly. Another respondent stated that he would like to have
a more efficient reporting system since there are issues of timeliness when printing
out statements and reports. The final respondent said that separate software is used
to generate financial statements – if this feature was integrated with the main
accounting software it would make it less likely for mistakes of data input to happen.
1 respondent liaises with a foreign software vendor, and consequently the firm
has some communication issues. Having a foreign software vendor would make it
more difficult to solve problems with the system. This is why some firms welcome the
ability to modify the software (source code modifications) in order to be able to make
voluntary changes internally, as long as a knowledgeable and experienced IT team is
available.
4.5.2 Reviewing the accounting system

46 survey respondents stated whether the accounting system is reviewed
proactively or reactively to spot defects and encourage improvements. Most
respondents (39.1%) indicated that the system is reviewed only when business
requirements arise, or when bugs or deficiencies surface (28.3%). 5 of the respondents
(10.9%) indicated that the system is reviewed proactively through an SDLC process.
21.7% of the respondents have never reviewed their accounting system once since it
has been installed. The results are presented graphically in Figure 4-25.
69
Figure 4-25 Review of the accounting system
All 5 interview respondents stated that they do not periodically review their
accounting system. Changes are only made when new business or legal requirements
arise, such as changes in legislation. Any updates or bug fixes are performed
automatically when they are rolled out.
It seems that most firms do not perform a review of their accounting system on
a periodic basis. Instead, they wait for issues to arise or when they feel that changes
have to be made. Although this is a common way to address problems, it is not
advisable to be reactive when dealing with accounting systems as complications may
build up which make it even more difficult for them to be solved at a later stage.
Additionally, it is always better to be prepared for changes in business requirements as
adequate planning leads to improved output and results from the accounting system.
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4.5.2.1 Frequency of accounting system reviews

The 5 survey respondents who stated that their firm reviews the accounting
system proactively were then asked to indicate the frequency of the reviews. 2 of the
respondents said that a review is performed every 6 months, another 2 said that yearly
reviews are performed, whilst only 1 stated that a review is done biennially.
The majority of the respondents who review their accounting system

proactively do so frequently, with reviews performed every 6 months up to every 1
year. This is usually part of the SDLC process in order to spot defects and encourage
improvements. Frequent reviews help in identifying any changes which may be
required. As such, it is imperative that the accounting system is not reviewed
sporadically as this bolsters inefficiencies and any system issues may end up being
overlooked; with problems being treated too late if the reviews are infrequent.
4.5.3 Changes in the accounting software

46 survey respondents indicated the changes they would like to make to the
accounting software. The means of the software categories were obtained on a scale
from 1 to 5, where 1 means that “no changes are required” and 5 means the
respondents feel that the software features need to be “changed completely”.
Most changes are required in the functionality and capability of the software
(2.25), followed by changes to vendor stability and support (2.19) and the cost of the
software (2.12).
4.5.3.1 The functionality/capability of the software

Figure 4-26 presents the mean ratings of the functionality and capability of the
software which were obtained from the survey. The areas respondents felt that
required the most changes included report-writing functions (2.54), the flexibility and
customisation of the software (2.37) and the ability of the software to handle
transaction complexity (2.30). On average, respondents felt that few to no changes
71
were required in the security features (1.98) of the software and its ability to handle
transaction volume (2.20).
Figure 4-26 Mean ratings of changes wanted in the functionality/capability of the

software

Graphics features 2.22 4
Ability of the software to deal with changes in financial legislation 2.20 5
Functionality/capability of the software 2.25 1
Few changes are needed in the security features and in the ability of the
software to deal with changes in financial legislation. These software categories were
also ranked high on the list of importance when it comes to selecting the accounting
software. It seems that firms choose their accounting software wisely – at least in
relation to these factor categories – since few to no changes are needed here.
In the software selection decision discussed earlier, report-writing functions did

not rank high on the list of importance (Figure 4-14), whilst over here it was the
software feature which respondents wanted the most to change, as shown in Figure 4-
26. As such, due to not giving enough attention to this function when searching for
accounting software, this could have resulted in the respondents selecting
inappropriate software.
Certain areas are not deemed to be important, but then firms state their
dissatisfaction and that they want to see changes in them. This means that these
features are actually important for the business but not enough effort is made to
ensure that the quality of such features are present when selecting the accounting
software, such as in the case of report-writing functions.
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4.5.3.2 The software vendor’s stability and support

Figure 4-27 shows the mean ratings of the software vendor’s stability and
support, obtained from the survey. On average, respondents felt that changes to the
training given by the vendors (2.17) and technical support (2.20) ranged from a few
changes to some changes required.
Figure 4-27 Mean ratings of changes wanted in the software vendor’s stability and
support

Vendor stability and support 2.19 2
As such, in the area of vendor stability and support, no major changes are
required and there should be no disturbances to the vendor relationship in the short
term.
4.5.3.3 The cost of the software

The mean ratings obtained from the survey of the cost of the software in terms
of the changes expected are shown in Figure 4-28. On average, respondents felt that
changes to training costs (2.09) and the annual operating cost (2.15) ranged from a few
changes to some changes required.
Figure 4-28 Mean ratings of changes wanted in the cost of the software

Training costs and the annual operating cost were ranked low on the list of
importance, and respondents felt that few changes were required in these areas. A
possible reason for this is that training costs and ongoing fees might be planned
beforehand, and thus if any major changes were required they would have been
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discussed before the accounting software was bought. This means that the
respondents are less likely to seek any improvements in these areas.
4.5.4 Satisfaction and improvements

Figure 4-29 compares the mean satisfaction ratings with the mean
improvement ratings. In general, security (3.96) was the highest rated software feature
in terms of satisfaction, whilst also being the software feature respondents felt the
need for the fewest improvements (1.98).
The handling of transaction complexity (3.87) was the third highest area of
satisfaction for the respondents, although it was an area which, on average,
respondents felt some changes were required (2.30).
The report-writing functionality of the software (3.52) was one of the areas
respondents were the least satisfied with, and it was one of the highest rated areas
were respondents wanted to see changes (2.54).
Figure 4-29 Mean satisfaction and improvement ratings
Rank Highest satisfaction Few improvements wanted

1 Security features (3.96) Security features (1.98)
2 Handling of transaction volume Training costs (2.09)
(3.91)
3 Handling of transaction complexity Annual operating cost (2.15)
(3.87)
Rank Lowest satisfaction Many improvements wanted
1 Vendor software testing (3.41) Report-writing functions (2.54)
2 Training by software vendor (3.43) Flexibility/customisation (2.37)
3 Report-writing functions (3.52) Handling of transaction complexity
(2.30)
It is unsurprising that security features, an area which the respondents felt

satisfied with, was also the area where few improvements were wanted. Firms who
choose their accounting software in line with their organisational goals and business
requirements are more likely to be satisfied with their choice, ultimately not needing
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any changes in such an area (unless organisational goals or business requirements

change). Similarly, report-writing functions ranked low on the satisfaction scale by the
respondents, and it was thus one of the areas where they wanted to see some
changes. If the users are not satisfied with a certain area of the system they would
require improvements in order to curb frustrations and functional limitations. Despite
this line of reasoning, although the respondents were satisfied with the software’s
ability in handling transaction complexity, they still required a few changes in this
feature, perhaps in the transaction processing speed and efficiency.
4.5.5 Circumstances influencing changing over to a new accounting

system
Figure 4-30 shows how the 50 respondents feel that certain reasons and
circumstances could influence their decision to change their accounting system. A
rating of 1 means that the reason indicated “does not influence the decision to change
the system”, whilst a rating of 5 means that the reason given “strongly influences the
decision to change the system”.
The strongest influences to changing over are if the current system is obsolete
(3.74) and if the software vendor is not delivering on his promises (3.48). On the other
hand, the fact that better systems are available (3.12), or that the current system does
not provide information on a timely basis (3.24), have a lower influence on the
decision to change the current accounting system.
Figure 4-30 Mean ratings of the decision to change over to a new accounting system
Reasons for changeover Mean Rank

Current system is obsolete 3.74 1
Software vendor is not delivering on his promises 3.48 2
Current system does not provide sufficient management information 3.44 3
Current system is expensive to maintain 3.32 4
Current system does not provide information on a timely basis 3.24 5
Better alternative systems are available 3.12 6
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It is not surprising that if the current system is thought to be obsolete then the
firm would be influenced to change to a newer, more updated and more relevant
system. It is counterproductive and places the firm at a competitive disadvantage if
other businesses are using more efficient accounting system software. In fact, Little
(2006) highlighted the importance of changing the system in order to remain
competitive.
It seems that the fact that better systems could be available is the circumstance
which least influences the respondents to change their accounting system. However,
the “current system is obsolete” reason ranks at the top, whilst the fact that “better
alternative systems are available” ranks at the bottom – even though an obsolete
system may be defined as one which in time has been overtaken by newer and better
systems. An explanation for this seemingly mismatched ranking is that respondents
took “obsolete” to mean old systems which are no longer functional and relevant in
the present business environment – however, the availability of better systems does
not mean that the current system is not performing well, but it could be that there are
other systems which can perform the same functions more efficiently and effectively.
So it is possible to change to a new accounting system whilst the old system would still
be helping in achieving the business objectives i.e. the current accounting system is
not obsolete functionality-wise, but better systems are available.
If the software vendor is not delivering on his promises, for example by not
fixing problems on a timely basis and taking too much time to roll out new updates,
again, the accounting system’s performance will be hindered and consequently
business performance will drop. It is thus one of the top reasons for a changeover.
Not providing sufficient management information would be another major

reason to change the accounting system, considering the importance of a system
which produces adequate information in order for a firm to make good business
decisions. Wrong decisions taken on the basis of incorrect information may well ruin a
business and its reputation. According to Bagranoff et al. (2010), the main objective of
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the AIS should be fulfilling the users’ information needs. If the AIS fails in this regard it
would thus be failing to deliver in its principal intended purpose as a system.
It is important to note that, on average, all the circumstances put forward at

the very least moderately influence the decision to change the system, albeit with
varying degrees of influence. This means that all the listed considerations should be
given merit when a firm is trying to determine if a change in the AIS is required.
4.5.5.1 Other factors

All 50 respondents were asked to rate how strongly certain factors are taken
into consideration when deciding if a new system should be developed or purchased.
The mean ratings were obtained on a scale from 1 to 5, where 1 relates to “not
important” and 5 relates to the reason being “very important”. The results are found in
Figure 4-31.
The most important factors are the disruption to the business’ operations when
moving to a new system (4.12), followed by a tie between the proficiency of the users
in using the current system (3.92) and the costs necessary to be incurred when
changing over (3.92). The factor which is least taken into consideration is the time
required to search for a new accounting system (3.32).
Figure 4-31 Mean rating of other factors which are taken into consideration when
deciding if a new system should be developed or purchased
Factors to be taken into consideration Mean Rank

Disruption necessary to the business operations when moving to 4.12 1
a new system
The proficiency of the users with using the current system 3.92 2
Costs necessary to be incurred when changing over to a new 3.92 3
system
Employee training required when adopting a new system 3.80 4
The time required to search for a new system 3.32 5
The disruption to the business operations is naturally of high concern to firms

since it can inhibit the firm from engaging in its daily business processes, setting it back
both in terms of revenue and in terms of its reputation – since if customers are not
77
serviced they may take their business elsewhere. If the changeover takes the course
over several weeks (although not necessarily disabling all of the business operations
during this time, in fact this is very unlikely) it will also bring about tensions amongst
the employees. Consistent with the author’s findings, the disruption and hassle to the
business was also one of the top reasons why companies do not change their
accounting software, a study by Elikai et al. (2007) found, as previously identified in
the literature.
The costs which are incurred when changing over are also important. In fact, in
another study it was the top reason why companies may be reluctant to change their
accounting software (Ivancevich et al., 2010). If the costs are anticipated to be too
expensive when changing over, firms may be unwilling to take the plunge of acquiring
new accounting software due to the monetary investment required.
4.6 Conclusion
This chapter presented and discussed the most important findings from the
questionnaires and interviews. The conclusions drawn from these results obtained, as
well as the macro viewpoint of the software selection and review processes are given
in the next chapter. Any recommendations identified by the author are also put
forward.
78
CHAPTER 5 – SUMMARY, CONCLUSION AND
RECOMMENDATIONS
Chapter 5 Summary, Conclusion and Recommendations
5.1 Introduction
This final chapter will give a brief summary of the study and the conclusions
derived from this research project. Recommendations on improving the software
selection and review processes for AISs are also put forward, and the areas for further
research are then identified.
5.2 Summary and conclusion

Every firm uses an AIS to process its transactions, to produce reports in
compliance with financial legislation and accounting standards, and for internal
decision making purposes. Most firms today use CASs to meet these ends. The AIS
needs to be well understood by its users, and the software has to be both functional
and intuitive to allow them to make the best use out of it. Having an AIS which can
help the firm carry out its objectives is imperative if the system is expected to meet the
aforementioned aims. As such, selecting the appropriate software is a very important
decision for any firm. Once the accounting software has been selected, continuous
system reviews and strives for improvement should be on the firm’s agenda.
The focus of this study was to analyse the AISs in Malta, evaluate their software
selection process, and then determine the satisfaction with such systems and identify
any areas for improvement. This was accomplished through distributing questionnaires
and conducting semi-structured interviews with local Maltese firms.
This study indicates that most firms in Malta use CASs, with only a few number
of micro and small companies who still make use of MASs. This is in line with the
established literature, especially considering the importance of information
technologies in today’s fast paced business environments. Many firms use stand-alone
accounting software, with the majority of large firms making use of accounting
software which is part of a larger system (e.g. ERP and CRM systems). These are mostly
used in large enterprises as these systems have the ability to integrate many different
business processes together, facilitating the handling of large volumes of data in a
80
relatively shorter period of time when compared to stand-alone accounting software.

Additionally, although the bulk of accounting software is purchased off-the-shelf, this
does not exclude any future software modifications if certain changes are deemed
necessary by the system designers and users. The author remarks that the results from
this study suggest that AISs in Malta are similar in structure to foreign AISs.
Senior management and the finance and accounting departments are involved
in the majority of the cases in the software selection process and the final purchasing
decision. These personnel are often present in this decision either because of their
hierarchical position of power within the business, or because of their intricate
knowledge and proficiencies with such AISs, which thus aids the firm in selecting the
right software. The software purchasing decision is hence taken by a number of
different people, bringing together new ideas and more expertise. In the software
selection process, the functionality of the software is the most important factor
category for firms seeking out new accounting software. The cost of the software is
actually the least important selection criteria – most firms believe that in the selection
process, the actual functions that can be performed by the software are a more
influential component than its price. This fact is also confirmed in many other studies.
The author considers that the software selection process undertaken by Maltese firms
to be highly comprehensive, thus enabling the correct decision to be taken.
As such, the author believes that due to this intricate software selection
process, firms in Malta are generally satisfied with the software choice for their AIS.
Choosing the accounting software which best matches the business requirements will
likely result in firms being more satisfied with their choice in the long term. This choice
is assisted by proper research and consultations with business solution experts and
accountants.
The majority of firms are reactive to change and thus only review their
accounting system when new business requirements arise or bugs and deficiencies are
identified. Few firms are proactive in this regard, performing a review periodically to
make sure that the system is up to current business standards. Despite the fact that
81
most firms are satisfied with the functionality of their software, a few changes would
still be welcome in this area. Firms want to see improvements in the report-writing
functions of the software and its customisability. Producing financial reports is one of
the main aims of an AIS, and so such emphasis given on this software aspect is to be
expected, considering its importance as a key role of the system. Customising the
accounting software would also give more technical control over the system, allowing
firms to make any changes without having to communicate and liaise with the
software vendor.
The author identified other improvements which could be made to increase the
firms’ satisfaction with their accounting software, and the accounting system in
general. These improvements include enhancing the software’s ability to handle
transaction complexity, having better graphics features, new intuitive user interfaces,
more helpful vendor support, and detailed technical documentation. Firms are more
likely to change their accounting system if they perceive that it is obsolete, or if the
software vendor is not delivering on his promises when it comes to technical support.
However, the disruption necessary to the business operations and the user’s ambiguity
with using a new system can be a major influence on this decision to change. It is thus
evident that many firms fear change and uncertainty.
82
5.3 Recommendations
 Using computerised decision support tools – it is common practice for foreign
companies to make use of software programs which aid management in
selecting suitable accounting software according to the business’ requirements.
This approach could be applied locally by compiling a list of the most popular
accounting software in Malta, whereby the program then creates a short-list of
software that best matches the needs of that business.
 More frequent accounting system reviews – firms should review their AISs
periodically. In Malta it is prevalent for firms to only make changes to the
system if problems are unexpectedly uncovered or if new business
requirements arise. However, being proactive has many advantages. A firm
would be able to stay one step ahead of its competitors by always having the
latest software updates and system changes. Additionally, it would not be
exposed to vulnerabilities since these are actively sought out to prevent any
exploitations.
 Strengthening the functionality of the software – software vendors should

ensure that their focal point when developing or selling their accounting
software is its functionality. This is the area which firms base most of their
purchasing decision on, and as such for firms to be satisfied with their choice
the functionality of the software has to meet their expectations. Effort has to
be made to provide robust software with fast operating report-writing
functions, inherent software customisability, and ultimately have the necessary
capabilities to meet a business’ requirements.
83
5.4 Areas for further research

There are a number of similar research areas which can be explored, some also
building upon this dissertation.
 Exploring the effects of business size on the software purchasing decision –

large companies usually have better means of selecting the right accounting
software than small businesses due to the organisational resources available.
Smaller firms have to make do with free or low-cost sources of information to
help them in making the software selection. Hence, there are differences in the
selection criteria prioritised by large companies and those prioritised by smaller
companies. A study can focus on identifying these differences.
 Focusing on the way accounting software is acquired – there are various ways
of how to acquire accounting software: off-the-shelf, bespoke, or developed in-
house. There are many different reasons why firms might opt for one option
over the other. Each decision carries with it various advantages and
consequences which companies have to weigh before making a decision, and
these can be explored in another study.
 Concentrating on the meticulous SDLC process – the SDLC is a long, intricate

process which some firms undertake in order to develop and maintain a proper
accounting system, proactively dealing with issues before they become a major
problem. A research project could study firms who undertake this process in
order to create a better understanding of the level of work and commitment
that this procedure entails.
84
5.5 Concluding remarks

The software selection and review processes are very significant for Maltese
firms. Failure to have sound and reliable procedures for selecting the software will
result in a sub-optimal choice, which leads to poor performance, endless problems,
and frustrated employees – and also unsatisfied customers. The changes and
improvements wanted from the accounting systems which are identified in this
dissertation show that firms are aware of the importance of the software selection
process, as well as the future on-going reviews of such systems. This awareness gives
assurance that firms take this procedure very seriously, and that they understand that
the software chosen should result in a long term commitment – if the relationship
between the users and the system is to be successful, and ultimately beneficial for the
business.
This research project has identified the most important software selection
criteria, and evaluated the review processes. The significance of the results is that
firms seeking new accounting software can look at what other firms in their sector
have chosen, what the most important software functions are for them, and ultimately
whether they are satisfied with their decision. This helps firms take better decisions
when selecting the accounting software. Additionally, it also helps local software
developers and vendors to better understand what Maltese firms want from their
accounting software. An alignment between what the firms want and what is delivered
to them will result in increased satisfaction and better organisational performance.
Considering that little literature is available locally in this area, this study also
contributes new knowledge on AISs, the software selection procedures, and the review
processes.
85
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APPENDIX 1 – QUESTIONNAIRE
Appendices
https://www.surveymonkey.com/s/AIS_thesis_survey
[Online questionnaire filled in by the survey respondents]
----------------------------------COPY OF THE QUESTIONNAIRE -------------------------------------
1. What is your position within the business?
 Accountant
 Manager
 Financial Controller
 Business Owner
 Auditor
 IT administrator
 Other: _____________
____________________________________________
2. Which best describes your role when it comes to accounting software?
 Software user
 System designer
 IT specialist
____________________________________________
3. What industry does the company you work for primarily compete in?
 Agriculture
 Building and Construction
 Consulting services
 Education
 Financial and business services
 Fixture and Fittings
 Government
 Healthcare and Pharmaceuticals
 Hospitality services
 Industrial products and services
 International trading
 Legal services
 Manufacturing
 Media and advertising
 Retail
 Shipping and marine
97
Appendices
 Technology
 Training services
 Wholesale
 Other: _____________
____________________________________________
4. What is your business classification with regards to size?
 Micro (< 10 employees and ≤ €2m annual turnover)

 Small (< 50 employees and ≤ €10m annual turnover)
 Medium (< 250 employees and ≤ €50m annual turnover)
 Large (> 250 employees and ≥ €50m annual turnover)
____________________________________________
5. Do you use Computerized Accounting Software (CAS)?
 Yes
 No
____________________________________________
-If the answer to question 5 was yes, skip this question and go to question 7-
6. What is the reason why you are still using a manual accounting system in today's
fast paced business environment? Tick where applicable.
 Adopting a computerised system is expensive

 Too much hassle involved in changing over
 A manual system is adequate for our business processes (e.g. very small
business)
 It has always been this way in this business
 There is no risk of technological glitches or power outages altering or
destroying the data
Go to question 19
____________________________________________
7. Is the CAS stand-alone, or part of a larger system?
 Separate accounting software (i.e. stand-alone)

 Part of a larger system (e.g. ERP)
____________________________________________
98
Appendices
8. How was the accounting system acquired?
 Developed in-house
 Purchased off-the-shelf
 Custom software/bespoke (purchased software specifically tailor-made to the
business' needs)
____________________________________________
9. What accounting software or integrated system does the business use?
 Developed in-house or Bespoke/custom software

 Access software (provided by Philip Toledo Ltd.)
 Excel
 CaseWare
 Oracle
 Sage
 SAP
 Shireburn
 Microsoft Access
 Microsoft Dynamics AX
 Microsoft Dynamics NAV
 Other: _____________
____________________________________________
10. Which software modules are included in the accounting system? Tick where
applicable.
 Accounts payable
 Accounts receivable
 Billing
 Electronic payment
 Fixed assets
 General ledger
 Inventory control
 Job costing
 Manufacturing
 Multi currency
 Payroll
 Purchase order
 Sales invoicing
99
Appendices
 Timesheet
 Other: _____________
____________________________________________
11. Who was involved in the software selection procedure? Tick where applicable.
 Business consultants
 Finance and accounting departments
 I.T. staff
 Senior management (business owner, directors, CEO etc)
 Other staff: _____________
____________________________________________
12. Were you involved in the software selection decision?
 Yes
 No
____________________________________________
13. How important are the following major categories in the software selection
decision?
Major factor categories 1 2 3 4 5

The functionality of the software     
Vendor stability and support     
Cost of the software     
1 – Not important
2 – Slightly important
3 – Moderately important
4 – Important
5 – Very important
____________________________________________
100
Appendices
14. How important are the following criteria when making the software selection
decision?
1 2 3 4 5
Functionality/capability of the
software
Flexibility/customisation     
Graphics features     
Handling of transaction
    
complexity
Handling of transaction volume     
Ability of the software to deal
with changes in financial     
legislation
Integration with the current
    
system
Possibility for future expansion
    
(scalability of the software)
Report-writing functions     
Security     
Upgradability     
User friendliness     
Vendor stability and support

Software vendor reputation     
Technical support and
    
documentation
Time elapse required to roll out
    
to the new software
Training by the vendor given to
    
the users
Vendor software testing     
Cost of the software

Annual operating cost
(maintenance and/or license     
fee)
Initial purchasing cost     
Installation costs     
Training costs     
1 – Not important 4 – Important
2 – Slightly important 5 – Very important
____________________________________________
101
Appendices
15. How satisfied are you with the following software features and other related
components of the current system?
1 2 3 4 5
software
Handling of transaction     
complexity
Integration with the current     
system
Possibility for future expansion     
(scalability of the software)
Software's capability in dealing     
with changes in financial
legislation
Upgradability     
Vendor stability and support

Software vendor reputation     
Technical support and     
documentation
The time elapsed when rolling     
out to the new software
Training by the vendor given to     
the users
Vendor software testing     
Cost of the software

Annual operating cost     
(maintenance and/or license
fee)
Initial purchasing cost     
Installation costs     
Training costs     
1 – Not satisfied 4 – Satisfied
2 – Slightly satisfied 5 – Very satisfied
3 – Moderately satisfied
____________________________________________
102
Appendices
16. Is the accounting system reviewed proactively or reactively to spot defects and
encourage improvements?
 Reactive: The system is reviewed when bugs or deficiencies arise

 Reactive: The system is reviewed when new business requirements arise
 Proactive: The system is reviewed periodically through a Systems Development
Life Cycle
 The accounting system has not been reviewed once yet
___________________________________________
-If the answer to question 16 was "reactive" or "the accounting system has not been
reviewed once yet", skip this question and go to question 18-
17. How frequently is the accounting system reviewed to spot defects and encourage
improvements?
 Every 6 months
 Every 1 year
 Every 2 years
 Every 5 years
____________________________________________
18. Where would you like to see changes (improvements) in the current accounting
system?
The list is in terms of how the current software handles the following
functions/features.
1 2 3 4 5
software
Handling of transaction     
complexity
Dealing with changes in financial     
legislation
103
Appendices
Vendor Support
Technical support and     
documentation from the vendor
Training by the vendor given to     
the users
Cost of the software     

Annual operating cost     
(maintenance
Training costs and/or license     
fee)
1 – No changes required
2 – Few changes required
3 – Some changes required
4 – A lot of changes required
5 – Changed completely
____________________________________________
19. How would the following reasons influence your decision to change over to a new
system?
1 2 3 4 5
Better alternative systems are
    
available
Current system does not provide
sufficient management     
information
Current system does not provide
    
information on a timely basis
Current system is expensive to
    
maintain
Current system is obsolete     
Software vendor is not
    
delivering on his promises
1 – Does not influence the decision to change the system
2 – Slightly influences decision to change the system
3 – Moderately influences the decision to change the system
4 – Influences the decision to change the system
5 – Strongly influences the decision to change the system
____________________________________________
104
Appendices
20. How important are the following factors which are to be taken into consideration
when deciding if a new system should be developed/purchased.
1 2 3 4 5
The proficiency of the users with     
using the current system
Costs necessary to be incurred     
when changing over to a new
system
Disruption to the business     
operations when moving to a
new system
Employee training required     
when adopting a new system
The time required to search for a     
new system
1 – Not important
2 – Slightly important
4 – Important
5 – Very important
____________________________________________
21. Is there any intention to change the current accounting system?
 Yes, within one year

 Yes, within the next 5 years
 No
105
APPENDIX 2 – INTERVIEW QUESTIONS
Appendices
1. Could you describe your AIS? What software do you use? What are the most
used modules? Is it off-the-shelf software or custom-made? How long has it been
installed?
2. Is there a process by which the system is periodically reviewed to determine

if any modifications are required? What is this process? And has the accounting system
or software ever been changed? If there have been any changes, what where the
reasons for these changes?
3. How do the employees use the information produced by the AIS? Are they
given appropriate training for this? Did the software vendor help in the training
provided?
4. How satisfied are you with the accounting system in place? Did it meet your
expectations? Has business performance improved? (less mistakes, quicker, more
intuitive etc) What areas are you most satisfied with and least satisfied with?
5. What can be improved from the AIS? What benefits would the changes in
the accounting system and/or software bring to the users and to the organisation?
6. Who was involved in the software purchasing decision and what was their
role?
7. The choice of accounting software is a major part of the AIS, and there are
various decision support tools which can be used. Was there a particular methodology
adopted in choosing the software (e.g. point scoring analysis, consultations with
business solution experts etc)?
8. Is the price of the accounting software a top priority? Or are you more
concerned with the functionality of the software? How important are future
maintenance costs during the selection process?
9. The vendor relationship can ensure long-term success with the AIS (e.g.
updates, maintenance, bug fixing). How did this play a role in your purchasing
decision?
107
Appendices
10. Accounting software comes in various forms and sizes. Your business could
potentially grow and expand greatly in the future. Was the software chosen with this
long term view in mind? Is it scalable to the business' size?
11. Due to local laws and regulations such as VAT, GAPSE and FSS modifications
may be required to the accounting software. Are there any provisions in legislation
which can affect your software, and consequently the software selection decision?
Were any modifications requested when purchasing the software? (US software not
VAT compliant for example)
12. What are the future plans for the AIS? Are there any major changes
planned?
108
APPENDIX 3 – OTHER JOB POSITIONS
Appendices
Job positions listed under the ‘Other’ category by the survey respondents
Other job position No. of respondents %

Accountant trainee 2 4.0
Accounts executive 1 2.0
Accounts officer 2 4.0
Assistant investment advisor 2 4.0
Assistant to financial controller 1 2.0
Financial advisor 2 4.0
General manager 1 2.0
Head of IT 1 2.0
Managing director 1 2.0
Supervisor 1 2.0
Tax manager 1 2.0
Team leader 1 2.0
Transport manager 1 2.0
Total 17 100.0
110
APPENDIX 4 – OTHER ACCOUNTING
SOFTWARE
Appendices
Accounting software listed in the ‘Other’ category by the survey respondents
Other accounting software No. of respondents %

Tourplan 1 10.0
Apex 1 10.0
CaseWare 1 10.0
Cursor Accounting System 1 10.0
Pastel Evolution 1 10.0
Intuit Quickbooks 3 30.0
PFS Paxus 1 10.0
Infor SunSystems 1 10.0
Total respondents 10 100.0
112

Georges - Xuereb-PG Dissertation UPDATE

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The Software Selection and Review Processes

for an Accounting Information System

A dissertation submitted in partial fulfillment of the requirements

Purpose: Most firms make use of computerised software as part of their

Design: The objectives of this study were achieved by conducting semi-

Conclusions: The software selection process is generally given significant attention,

Value: Due to the significance of having a well functioning and robust

Keywords: Accounting Information System, Computerised accounting, Software

Library Reference Number: 14MACC081

Student’s ID Code 428491M

Student’s Name & Surname Georges Xuereb

Course Masters in Accountancy

Title of Dissertation The Software Selection and Review Processes for an

_______________________ GEORGES XUEREB

1.2 Background information

(Hall, 2011, p.9)

decision making. Due to technology developments, accountants need to learn systems

An AIS helps an organisation in achieving its objectives, and thus it is very

Accounting software has evolved from spreadsheets containing basic data, to

1.3 Need for such a study

1.4 Objectives of the study

1.5 Limitations of the study

Due to this dissertation topic being very general in nature, as opposed to

1.6 Study overview

2.2 Overview of the Accounting Information System

(Hall, 2011, p.10)

2.3 Acquiring the Accounting Information System

 Backbone systems – these systems consist of a general system structure on

 Vendor-supported systems – these are customised systems where the design,

(Hall, 2011, p.15)

2.3.1 The Systems Development Life Cycle

The systems development process will vary between different business

o General systems goals – an AIS can contribute towards an efficient and

o Top management systems goals – an AIS helps top management in

o Operating management systems goals – these are narrower and

(Bagranoff et al., 2010, pp.420-424)

(4) Systems implementation, follow-up, and maintenance – this stage

2.4 Users of the Accounting Information System

The accountant's involvement should be "pervasive" in systems development,

McChlery et al. (2005) express a similar viewpoint when they identify

Jean-Baptiste (2006, p.16) explains that the "modern accountant is expected to

2.5 The impact of information quality on organisational

Management requires "good quality and reliable information" (Sajady et al.,

Aspects of good quality information are identified as accuracy, format, content,

2.6 The evolution of Information System models

o Different information needs - the flat-file structure may exclude certain

o Elimination of data redundancies - data is stored only once and this

o Elimination of multiple updates - there is only one source of data and

o Immediate data availability - any changes to the data is instantaneously

o Economic agents - entities from both within and outside the

2.7 The computerisation of the Accounting Information

Computerising the accounting system brings about many benefits associated

2.7.1 Types of accounting software

Most accounting software modules include "general ledger, accounts payable,

Low-end small business accounting software is used by small firms which do

2.8 The software selection and review processes

could mean incompatibility problems, functional limitations, and frustration, as well as

The scalability of the accounting software is an important aspect to consider,

2.8.1 Decision tools supporting the selection of the accounting

Oliver (1994) recommends a six-step approach where the accountant helps

Bagranoff et al. advocated a technical approach to evaluating an AIS using a

2.8.2 The accounting software selection criteria