Factors Influencing AIS Effectiveness Among Manufacturing SMEs: Evidence From Malaysia

Abstract

This study examines accounting information systems (AIS) effectiveness and its influence factors in the specific context of small and medium manufacturing enterprises (SMEs) in Malaysia. The proposed model examines the impact of AIS sophistication, manager participation in AIS implementation, manager AIS knowledge, manager accounting knowledge, and effectiveness of external experts such as vendors, consultants, government agencies, and accounting firms on AIS effectiveness. We included 232 SMEs registered with the Federation of Malaysian Manufacturers (FMM) in testing the model. The results show that manager accounting knowledge, and the effectiveness of vendors and accounting firms significantly contributed to AIS effectiveness. Overall, this study suggests that managers of SMEs need to acquire sufficient accounting knowledge to better understand business information requirements. Second, SMEs should engage qualified vendors who have experience and understand unique characteristics of SME to overcome their lack of AIS knowledge. SMEs should also exploit their good relationship with accounting firms to help them implement effective AIS. Finally, it is important for SMEs to learn from AIS implementation so that opportunities can be recognized and priority can be given to those initiatives that support their information needs.

Technological, Organisational and Environmental Aspects of Audit Technology Acceptance

“…Professional audit service provided by public accounting firms is vital to most businesses in providing assurance that businesses' financial reports are true and fair (Ismail, 2009). Auditors have to gather and evaluate audit evidence to examine whether their business clients have managed business transactions properly.…”

“…Despite the wide usage of audit technology in internal auditing (Mahzan and Lymer, 2009) and the importance of audit technology (Ismail, 2009), such utilisation is not extensive among public accounting firms specifically in performing external audit of their business clients (Curtis & Payne, 2008). Furthermore, previous study examines the adoption of audit technology through the perspective of individual auditors (Janvrin, Bierstaker, & Lowe 2008).…”

The Importance of Influences Factors for Chooses and Use of Software and Hardware to Support Operations in Accounting Information Systems Adoption

“…Nowadays, many organisations use vendors for implementing their system (Bandor & INST. 2006;Oracle 2008; Recently, organisations have experienced problems in the process of implementation of accounting information systems (Ismail 2009). The argument behind this finding is that accounting information systems often lack high-quality data.…”

“…Thus, many organisations needs to be seen as well adopting AIS, which is critical to a company in order to organise, manage and operate process in all sections. Ismail (2009) indicates that organisations are highly concerned to the problems of their AIS quality by continuously seek to improve the AIS adoption efficiency of their operations.…”

“…In addition, other authors (e.g. Davila, Foster et al, 2004;Naomi and Kevin, 2007;Ismail, 2009;Romney and Steinbart, 2009) state that within organisations there must be an attention given to the accounting standards and laws of each country because they impact in accounting management (Davila, Foster & Pearson 2004;Romney & Steinbart 2009). For example, Davila, Foster et al, (2004) state that management AIS adoption is the initial framing of the accounting adoption decision under GAAP (Generally Accepted Accounting Principles) constraints supported financial planning.…”