Accounting Information System and Organizational Effectiveness: Evidence From SMEs Manufacturing Companies

Abstract

Accounting Information System (AIS) is an accounting device that is directly linked to economic and financial outcome as well as productivity of small medium-sized companies. This study aims to investigate the impact of AIS on the organizational effectiveness of manufacturing company categorised under small medium enterprises (SMEs). Generally, it is crucial for manufacturing organizations to have an effective technology so that business operating activities can be well-managed. However, most organizations only focus on some parts of AIS, which could lead to the ineffective utilization of AIS. Thus, this study intended to determine the impact of AIS elements on organizational effectiveness, mainly manufacturing companies.In this study, the updated IS Success Model developed by DeLone and McLean was used as it thoroughly describes all the components in the AIS. Questionnaires were distributed to 827 companies and 213 questionnaires were successfully collected. Findings show that AIS elements comprising of System Quality, Information Quality, Service Quality and System Use have a significant influence on organizational effectiveness. Therefore, this indicates that implementation of AIS by manufacturing companies is important to increase organizational effectiveness.