Integration of Cost Control and Information Technology Systems: Effects on Corporate Performance in Nigeria.
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Date
2014
Authors
Omorogbe, C.E
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Abstract
Increasingly hostile environment has led to the need for firms to consider more effective control strategies for achieving competitive advantage and improving performance. Evidence from previous studies has suggested that using advanced cost management systems enabled by advanced information technology (IT) systems would result in enhanced performance. However, there are conflicting views about observed performance levels when IT systems are introduced into the management accounting function. Some studies have recommended a detailed analysis of components within these systems for more conclusive results. This study, therefore examined the effect of the integration of cost control (CC) system (a subset of management accounting system) and information technology (IT) system on performance. It also examined the influence of certain organisational factors based on the contingency, task-technology fit and technology acceptance theories on the relationship between the variables. The study used cross-sectional survey, obtaining a sample of one hundred and three (103) firms selected from a total of one hundred and forty-one firms listed on the Nigerian Stock Exchange between 2006-2010. A model which incorporated organisational variables’ influences on CC/IT systems efficiency was tested using data collected through a questionnaire administered on 156 managers in the accounting and IT resource units of the 103 firms. Statistical tools used for analysis were means, correlations, multiple regression and Analysis of Variance (ANOVA). The results showed that 64.7% of the sampled firms had moderately developed cost accounting systems with mean score of 3.6534; and moderately developed cost control systems with mean score of 3.9736 and 3.5491 for cost control techniques and performance measurement techniques efficiency respectively. Cost control techniques explained about 50.7% (Adj R2 of 0.507) variation of non-financial performance; and performance measurement techniques explained about 33.7% (Adj R2 of 0.337) variation of non-financial performance. The organisational cost control structure and lines of authority had low effect on CC and IT systems efficiency; explaining about 14.2% (Adj R2 = 0.142) of cost control system efficiency and about 15.7% (Adj R2 = 0.157) of IT system control application efficiency. The observed integrated CC-IT systems explained about 57.0% (Adj R2 = 0.570) variation of non-financial performance and 29.0% (Adj R2 = 0.290) variation of turnover growth rate. The study provided evidence in support of the proposition that CC-IT integrated systems enhance non-financial performance of firms when there is a fit between cost control task and IT control applications. It was therefore recommended that firms should have a highly developed cost accounting system in order to properly anchor cost control systems that can enable IT systems.
Description
A Thesis Submitted to the School of Postgraduate Studies, University of Lagos.
Keywords
Cost Control , Information Technology , Corporate Performance , Research Subject Categories::SOCIAL SCIENCES::Statistics, computer and systems science::Informatics, computer and systems science::Information technology
Citation
Omorogbe, C.E (2014), Integration of Cost Control and Information Technology Systems: Effects on Corporate Performance in Nigeria. A Thesis Submitted to University of Lagos School of Postgraduate Studies Phd Thesis and Dissertation, 203pp.