Corporate Finance

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International Journal of Economics and Finance

Vol. 4, No. 5; May 2012

The Usefulness of an Accounting Information System for Effective Organizational Performance
Siamak Nejadhosseini Soudani (Corresponding author)
School of Accounting and Management, Islamic Azad University U.A.E. Branch PO Box: 502321, Block 4A, Knowledge Village, Dubai, UAE
Tel: 97-14-295-3314
Received: March 19, 2012
doi:10.5539/ijef.v4n5p136

E-mail: Siamak.nejadhosseini@gmail.com

Accepted: April 9, 2012

Published: May 1, 2012

URL: http://dx.doi.org/10.5539/ijef.v4n5p136

Abstract
The aim of this study is to investigate usefulness of accounting information system (AIS) for effective organizational performance. AIS is the whole of the related components that are working together to collect, store and disseminate data for the purpose of planning, control, coordination, analysis and decision making. Therefore, impact of AIS on elements of organizational performance such as: performance management and financial performance is examined. The results of this study show that although AIS is very useful and have effect on organizational performance to listed companies in Dubai financial market (DFM) but, there is no relationship between AIS and performance management.

Keywords: Accounting information system, Financial performance, Performance management, Organizational performance
1. Introduction
Accounting Information Systems (AIS) are a tool which, when incorporated into the field of Information and Technology systems (IT), are designed to help in the management and control of topics related to organization’ economic-financial area. But the stunning advance in technology has opened up the possibility of generating and using accounting information from a strategic viewpoint (El Louadi, 1998). Accounting Information System (AIS) is vital to all organizations (Borthick and Clark, 1990; Curtis, 1995; Rahman et al., 1988; Wilkinson, 1993; Wilkinson et al., 2000) and perhaps, each organization either profit or non profit-oriented need to maintain the AISs (Wilkinson, 2000: 3-4). On the other hand, an AIS is the whole of the related components that are put together to collect information, raw data or ordinary data and transform them into financial data for the purpose of reporting them to decision makers (Mahdi Salehi, vahab rostami and Abdolkarim Mogadam, 2010). To better understand the term ‘Accounting Information System’, the three words constitute AIS would be elaborated separately. Firstly, literature documented that accounting could be identified into three components, namely information system, “language of business” and source of financial information (Wilkinson, 1993: 6-7). Secondly, information is a valuable data processing that provides a basis for making decisions, taking action and fulfilling legal obligation. Finally, system is an integrated entity, where the framework is focused on a set of objectives (Bhatt, 2001; Thomas and Kleiner, 1995). Accounting literature argues that strategic success is considered an outcome of Accounting Information System’s (AIS) design (Langfield-Smith, 1997). Several, studies have analyzed the role of AIS in strategic management, examining the attributes of AIS under different strategic priorities (Ittner and Larcker, 1997; Bouwens and Abernethy, 2000). It has also been analyzing the effect on performance of the interaction between certain types of strategies and different design of AIS (e.g. different techniques and information). The appropriate design of AIS supports business strategies in ways that increasing the organizational performance (Chenhall, 2003). Increasing AIS investment will be the leverage for achieving a stronger, more flexible corporate culture to face persistent changes in the environment. Innovation is the incentive with which a virtuous circle will be put in place, leading to better firm performance and a reduction in the financial and...
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