Page 1 of 14
Journal for Studies in Management and Planning
Available at https://pen2print.org/index.php/jsmap/
ISSN: 2395-0463
Volume 04 Issue 11
November 2018
Available online: https://pen2print.org/index.php/jsmap/ P a g e | 6
Determinants of Computerized Accounting Information System adoption by
Hospitals in Addis
Ababa, Ethiopia
Raya University, College of Business and Economics
Department of Accounting and Finance
Lecturer
Tel: +251918654091
E-mail: tilahunmanchilot@gmail.com
Abstract
The purpose of this study is to investigate factors that affect adoption of computerized
accounting information system by hospitals in Addis Ababa. It examines the effect of cost-benefit
perception, perceived ease of use, human resource, firm size and management commitment on
computerized accounting information system adoption. The study adopts explanatory research
design along with census survey of all of 52 hospitals in Addis Ababa. Primary data was
collected from these hospitals. The main findings indicate that adoption of computerized
accounting information system is significantly affected by perceived ease of use, human resource
and management commitment. Furthermore, cost-benefit perception and firm size are not
significantly related to adoption of computerized accounting information system. The study
recommends that hospitals should attempt to employ qualified and competent personnel;
accounting information system vendors should provide packages that are easy to use and
management to support accounting information system implementation.
Key words: Computerized accounting information system, perceived ease of use, Addis Ababa
Page 2 of 14
Journal for Studies in Management and Planning
Available at https://pen2print.org/index.php/jsmap/
ISSN: 2395-0463
Volume 04 Issue 11
November 2018
Available online: https://pen2print.org/index.php/jsmap/ P a g e | 7
1. Introduction
It has frequently been said that accounting is the language of business. If that is the case, then an
accounting information system is the intelligence or the information providing vehicle of that
language. Accounting information system is a system that gathers, records, stores, and processes
data to produce information for decision makers. (Romney and Steinbart, 2012)
Accounting information system is defined as a computer-based system that processes financial
information and supports decision tasks in the context of coordination and control of
organizational activities (Nicolaou, 2000).
An accounting information system can be either manual system or a computerized system that
use information technology or something in between. The procedure is the same without
regarding the approach taken. Accounting information system must gather, enter, process, store
and report financial information. The manual or computer hardware and software are the tools
used to produce the information (Romney and Steinbart, 2012).
Computerized accounting information systems have replaced manual-based accounting system in
virtually all businesses and organizations giving accountants, managers, employees and
stakeholders’ access to important accounting information (Albright 2006).
According to Gwangwava et al (2012), computerized accounting system has three main
advantages than manual accounting system: computerized systems automate and simplify the
process of recordkeeping, allowing all transactions to be recorded in electronic format and posted
automatically to ledger; computerized accounting systems are more accurate, make fewer
mistakes than manual accounting systems; and computerized accounting systems are real time
and provide updated information on account balances and the status of accounts.
As we live in the age of technological advancement, the role of computerized accounting
information systems is of greater importance in managing an organization and implementing
Page 3 of 14
Journal for Studies in Management and Planning
Available at https://pen2print.org/index.php/jsmap/
ISSN: 2395-0463
Volume 04 Issue 11
November 2018
Available online: https://pen2print.org/index.php/jsmap/ P a g e | 8
internal control systems. Accounting information systems allows a company to manage its
business with potential benefits of improved process flow, reduced inventories, better data
analysis and customer service, and increased profit margins (Gwangwava etal, 2012).
The significance of accounting information system in the economy of a nation has been
recognized universally, particularly in the contribution to the economic management of
developing economy, where the contribution of accounting information system towards growth,
creating job opportunity and social progress is highly important. The role played by accounting
firms has been enhanced by the development of accounting information system, which has
contributed to the professional values added to these organizations (Laudon, 1991). Truth to be
told, computerized accounting information system employed by software experts to process
accounting information systems with a good support of financial statements have reduced the
human error factor, compared to manual systems (Dalci and Tanis, 2009). Accounting
information system also provide information on actual budgets of the organization that will help
the company’s management to plan and control business operations ,but an appropriate
framework that determine the usage and impact of accounting information system is yet to be
determined. According to Ahmed et al (2016), accounting information system is beneficial and
valuable to the all types of business regardless their size, it can provide help during all the
process of decision making and enhance business performance and strategies. Consequently,
many organizations should adopt and practice accounting information system in order to
manage, execute and control adequately in all areas and functions.
According to Yuvaraj and Kibret (2013), accounting information system plays a vital role if it
has a potential for making administrative decision otherwise it misleads user’s idea and also that
lead them to make wrong decisions.
Despite all the advantages associated with the use of computerized accounting information
system, hospitals in Ethiopia are still disinclined to adopt this technology. Ethiopian firms have
poor accounting records for the purpose of avoiding tax and other obligations, which creates
twofold problem. Poor records make it difficult for companies to get reasonably valued credit
and then to manage their affairs effectively if they do get credit. Failing to make efficient
decision based on financial information is a feature of firms in Ethiopia due to multiple books
