Electronic Accounting Practices: An Effective Means for Financial Reporting Quality in Nigeria Deposit Money Banks

Abstract

Evidence from the literature (Akinduko, 2000;Anao, 2002;Emmanuel, 2015) revealed that the major reason for accounting practice is to ascertain financial position at a given time.Accounting information system (AIS) is useful in all types of organizations especially the banking industry where the survival and growth of such organization depend to a large extent, on supplying effective accounting information to internal and external users (Khalid, 2004).It is also apt to contend that the size of an organization determines the appropriate volume and complexity of accounting information for managerial decisions in such areas as purchasing, protection, hiring, borrowing, and investment.For instance, Amidu,Effar, and Abor, (2011) averred that accounting systems are responsible for recording, analyzing, monitoring and evaluating the financial condition of companies, preparation of documents necessary for tax purposes, providing information support to many other organizational functions, and so on.The objective of accounting information systems is to provide the reliable accounting information on a timely basis (Guan, 2006).An internal control system is a series of procedures designed such that Abstract:Nigerian banking industry has in recent times been reportedly facing different degrees of financial issues which give rise to widespread failure in the financial information quality.This serves as a pointer to the relevance of electronic accounting practices in achieving global quality financial reporting.Electronic accounting practice is a technology-based method which combines accounting principles as well as the concept of an information system to record, process, analyze and produce financial information about a business to end users.Studies in this regard, focusing on Nigeria Money Deposit Banks (NDMBs) were few and require further empirical investigation.This study, therefore, evaluated the impact of e-accounting practices on financial reporting quality of selected banks in Nigeria.Primary data were collected using questionnaire and secondary data covering a period of 2010-2017 were collected from the annual report of the selected banks.Ten deposit money banks in Nigeria were selected using homogeneous purposive sampling.Three hundred copies of a questionnaire were administered randomly on the selected staff of the banks out of which two hundred and sixty were returned and used for the study.Data collected were analysed using descriptive statistics like table and percentage with inferential statistics such as pooled regression analysis at 95% confidence level.The results showed that Bank Size (BS) at 92%; Cost of ICT Deployment (CID) at 69%; Perceived Ease of Use (PEOU) at 74%; and Perceived Benefit (PB) at 86% were specific factors influencing electronic accounting adoption in the selected banks.A significant differences was observed in factor influencing e-accounting adoption (R 2 = 0.9661; Adj R 2 = 0.9633; F= 1318.61;p= 0.000).The fixed effect estimation result revealed that electronic accounting promotes users confidence on the financial statement of the selected banks (R 2 =0.6203;Adj R 2 =0.6150;F=67.20; p=0.000).This study concluded that all the considered variables; BS, CID, PEOU, and PB influenced e-accounting adoption and that e-accounting practice enhanced accounting procedure and improved the timeliness of report generation and financial reporting quality of banks.It was recommended that deposit money banks should put more effort by developing mechanism that strengthens e-accounting usage to promote users confidence on the financial information published by banks.

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