QUALITY OF ACCOUNTING INFORMATION SYSTEMS: LITERATURE REVIEWS AND PROPOSING RESEARCH MODEL FOR VIETNAMESE FIRMS45458

VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESSQUALITY OF ACCOUNTING INFORMATION SYSTEMS: LITERATURE REVIEWS AND PROPOSING RESEARCH MODEL FOR VIETNAMESE FIRMS Ta Quan

VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS

QUALITY OF ACCOUNTING INFORMATION SYSTEMS: LITERATURE REVIEWS AND PROPOSING RESEARCH MODEL FOR VIETNAMESE

FIRMS

Ta Quang Binh 1* , Nguyen Thi Thuan 2

Thuongmai University

University of Transport Technology

ABTRACT

In the integration trend of the modern world, along with the strong development

of information technology, accounting information system (AIS) has become an indispensable management tool to help managers can quickly make accurate and timely decisions, and achieve the business goals as expected By reviewing the research works in the country and in the world, the authors synthesize the factors that affect the quality of AIS and proposes models to study the factors affecting the quality of AIS in Vietnamese enterprises As a result of the research model, the article offers some suggestions for future verification studies that will contribute to improving the quality of AIS in Vietnamese enterprises in the integration stage

Keywords: AIS’s quality, affecting factor, enterprises

1 INTRODUCTION

All the firms, including profit or non-profit firms rely on accounting information to helps internal parties such as managers and external ones like investors, government agencies, banks and other people to achieve their objectives and give the right decision

in economic field (Hansen and Mowen, 2007) In developed countries, information disclosure standards often converge on important criteria to ensure transparency, publication time, benefits for businesses, investors and other stakeholders However,

in developing countries like Vietnam, the situation of information disclosure and transparency still increases According to statistics of the State Securities Commission, the number of reporting and disclosure violations always accounts for over 50% of the total number of sanctioned violations In addition, the quality of

*Corresponding author

Email address: thuannt@utt.edu.vn

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financial statements in some enterprises is limited, slow time, has not been proactive

in disclosing information about the operation situation, capital use situation, corporate governance situation, financial statement figures still contain errors, the quality

of corporate governance is still low compared to the common ground of regional countries In fact, businesses on the market, including large-scale enterprises, have just stopped at compliance with regulations but have not really taken the initiative to improve the quality of the accounting information system to improve the operational efficiency of the business

Accounting information helps firms in making investment decision, assessing the efficiency, carrying out observation and giving solutions to regulations Rommey and Steinbart (2012) also agreed that accounting information system should cover data collection, record and process to provide information for decision making In this case, accounting information is viewed as a system that helps manage planning and control by providing information that is appropriate and reliable for decision making Kieso et al (2012) explained that the nature of accounting information system should

be collecting raw data and presenting it under helpful accounting information for information users

In recent years, firms are facing many challenges, in which competition from businesses

in the region and around the world is extremely fierce Moreover, users inside and outside the enterprise on accounting information require more about processing, collecting and using accounting information The variability of the directions for improving the quality of AIS has received much attention from both domestic and foreign researchers Typically in the early 20th century, scandals of famous enterprises such as Enron, WorldCom, Health South, Olympus, Tyco International caused huge financial losses to investors Therefore, the issue of the quality of AIS is of top concern

in governance activities In fact, there have been many scientific studies and proofs about the influence of accounting information in making important decisions related

to investors, managers within enterprises, creditors, State management agencies, confirming the role and importance of accounting information and enterprise accounting information system

2 Context of Vietnam economy

Vietnam's economy is a mixed economy While the economy is increasingly marketed, the state's intervention in the economy remains high The Government

of Vietnam recognizes that the Vietnamese economy is a market-driven economy, and many countries and economies including some advanced market economies also recognize Vietnam as a market economy Currently, Vietnam has the following economic components: state economy, collective economy, private economy, state capitalist economy, foreign invested economy One of the measures taken by the Party and the Government of Vietnam to make the state economic sector become the dominant part of the economy is to establish state-owned economic groups and state corporations However, from the early 1990s until now, Vietnam has continuously carried out equitization of State enterprises According to the preliminary data of the General Statistics Office in 2007, the state economic sector is the largest, accounting for 36.43% of Vietnam's real GDP

Vietnam's economy is facing great challenges from instability of the world economy,

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in the context that the economy is in the stage of new economic integration (officially

a member of AEC) In addition, Vietnam is facing a growth model in width that has gradually become critical, it is necessary to improve the business environment for businesses and be determined to implement economic restructuring According to the report "Overcoming obstacles" - the April 2019 publication updated on the East Asia and Pacific situation of the World Bank (WB), in a positive view, Vietnam is in a stable position to benefit from many free trade agreements that have been and will

be effective during the forecast period

In the April 2019 report of the General Statistics Office, there were 14,854 newly established enterprises nationwide, up to 19% compared to March 2019 Besides, there are 17,463 enterprises operating again, up to 52.6% over the same period last year In the province, up to the first 4 months of 2019, newly established enterprises were 5,800, up to 13.3%; 5,500 manufacturing and processing enterprises accounted for 12.7% However, the number of enterprises suspending business for a period of 4 months in 2019 was 16,984 enterprises, up to 19.7% There are also businesses that stop operating and wait for dissolution procedures to increase

The report of the National Center for Socio-Economic Information and Forecast shows that during the period of 2016-2018, economic growth has been on the recovery track, but improving the quality of growth has not reached the goal suggest Although labor productivity improved is still low The effect of improving the business environment is not clear Recently, public debt has decreased but foreign debts and debt repayment obligations have tended to approach the safe limit

According to Vo Tri Thanh (2019), the external risk factor for Vietnam's economic prospects is that the growth rate of major economies may decrease stronger, including European Union, USA, Japan and China - the main trading partners of Vietnam Global tensions escalate, the uncertain future of the Brexit process and internal conflicts within the EU region make the future of Vietnam's economy in

2019 more uncertain

Because of the business and production context, there are still many barriers; the cohesion with the FDI sector and the capacity and operational efficiency of the domestic enterprises sector, especially small and medium-sized enterprises, are still limited, some works and projects are behind schedule, of poor quality, so it

is necessary to promote businesses apply to technology increase efficiency and production New technology allows businesses to increase productivity, reduce costs, increase profits many times Industrial production continued to remain at the cap level, up more than 11.4% Processing and manufacturing industry continued to grow impressively by 13.7% Establishing new businesses continues to rise sharply Newly registered enterprises with registered capital increased by 14.1%, the total newly and additionally registered capital reached over 3.8 million billion VNĐ More than 34 thousand businesses are return in operation

Although Vietnam has grown rapidly, spectacularly over the past three decades, the transition to a prosperous and modern economy has just begun in this country With per capital income still accounting for only a small part of the global average, Vietnam is trying to maintain its fast-growing trajectory and follow the path of other

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successful East Asian economies joined the ranks of high-middle income countries for the past half decade Although Vietnam has every potential to achieve this goal, success is not by itself The population is aging rapidly, moderate labor productivity, and slow investment growth are weighing on Vietnam's medium-term growth potential In order to cope with the resistance of domestic structures, Vietnam needs to steer the changing external environment, where global trade structures are shifting, disruptive technology, rapid innovation, transformation and climate change

is shaping opportunities and creating new risks

Figure 1 Vietnam's GDP growth 2010-2018 Source: https://tradingeconomics.com/vietnam/gdp

In fact, in Vietnam enterprises, the quality of AIS is still poor-spirited Standards, decisions, circulars guiding accounting, legal system, regulations of the State are still in the process of completion According to the survey of evaluation opinions, there are many factors that affect the quality of AIS, which can be positive or opposite, the time for information provision is still delayed, making timely and missing decision making business opportunities The security of information is still overlooked, so it

is necessary to study the factors affecting the quality of AIS This article focuses on discovering and proposing factors affecting the quality of AIS to provide effective solutions to serve managers

3 PREVIOUS STUDIES

There have been many studies on the quality of AIS in developed countries Delone and McLean (1992) analyzed 6 factors affecting the success of information systems including “system quality, information quality, use, user satisfaction, individual impact, organization impact” Delone and McLean (2003) provide a model of adjustment for the success of information systems The research model of Delone and McLean (2003), quickly became a leading theoretical model and the most widely applied model for information system researchers Many researchers inherited later when concerned with the quality of AIS

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Figure 2 Research model of Delone & McLean (2003)

Inheriting the research model of two researchers Delone and McLean, author Ivana and Ana (2013) analyzes the basic characteristics of accounting information systems quality, discussing the model of AIS’s quality measurement The perception of the quality of accounting information systems by accountants in medium and large companies in Croatia is also presented The paper presents the historical overview of AIS’s quality based on three empirical studies conducted in

2001, 2008 and 2012 come to the conclusion that information technology factors affect the way the AIS operates, contributing to the preparation, processing, presentation and provision of accounting information

The purpose of Barki (2016) was to know how the effect of Use of information technology on the quality of accounting information systems, organizational culture on the quality of accounting information systems, and the quality of accounting information system on the quality of accounting information Based

on the literature of some previous researchers proved that (A) technology affects the quality of accounting information systems, using information system (AIS) Effectively requires an understanding of the organization, management and information technology shaping the system the use of information technology within an organization intended to provide information to the user (B) Organizational culture affects the quality of AIS, at the stage of design and implementation of the system, required careful consideration of the information attitude is the main component of the organization, information systems can

be substantially influenced by the culture of the organization (C) accounting information quality influence on information accounting quality is built with the main purpose to process accounting data from various sources into the accounting information needed by a wide range of users to reduce risk when making decisions

In another research by Ojua (2016) is aimed at measuring the relationship between the use of accounting software and the quality of the Accounting Information Systems (AIS) available for business decision making among business firms in Nigeria Using a sample of one hundred and fifty experienced chartered accountants in service firms, and adopting questionnaires to gather primary data- the Kolmogorove-Smirnov (KS)

System Quality

Intention to Use Information

Quality Service Quality

User Satisfaction

Net Benefits

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test and simple statistical tools for analysis The first hypothesis shows result of 0.27 above 0.05 level of confidence hence rejected, while the second hypothesis confirms the various challenges encountered in the use of accounting softwares with result of 0.11 above 0.05 confidence level The results indicated significant improvement in the quality of AIS and support business decision making process but with varying challenges The findings of the study may have implications for the firms’ management staff and accountants, as they revealed the acceptance of accounting softwares as an integral resources of the organization but the resources are not fully utilized due to management attitude and poor training As a result of this research, it can be concluded that most Nigerian firms have not explored the full potential of accounting software to make AIS of high quality It is recommended that accountants update their skills through training on the full utilization of the resources

of accounting softwares, management should enforce the use of accounting softwares, and upgrade it periodically to benefit from it numerous benefits

In the study of the quality of the information technology system - the case of Manokwari, Mona and Anik (2017) to examine the impact of some user participation factors on the development of accounting information systems training and education, and top management support) on the quality of accounting information system at the Manokwari Regional Public Hospital Authors distribute our questionnaire and conduct the interviews to 35 accounting information system users at this hospital

to generateour research data They findings indicate that only top management support significantly affects the quality of accounting information system Practically, this study contributes to address the issue of the quality of accounting information system at the Manokwari Regional Public Hospital

Figure 3 Research model of Mona và Anik (2016)

At the same time, the study of Omran (2017) aimed to develop a conceptual framework for exploring the critical success factors that affect the quality of accounting information systems and the expected performance After reviewing extensively the related literature, the study’s framework identified the quality of accounting

User Involvement in

the Development of

Accounting

Information System

Training and

Education

Top Management

Support

Quality of Accounting Information System

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information systems’ critical factors in terms of top management support, education and training, continuous improvement, user involvement, and risk management The quality of accounting information systems has seven dimensions which were accuracy, audit ability, reliability, security, timeliness, flexibility, and user satisfaction Furthermore, the study’s framework identified three major expected outcomes which are efficiency, effectiveness, and the integration of accounting and financial information from different sources

Currently, there are very few AIS quality studies in Vietnam, such as Nguyen Huu Binh (2016) and Vu Thi Thanh Binh (2018) Nguyen Huu Binh (2016) examines impact of effective internal control system and information technology (IT) on the quality of accounting information system Data are collected from a survey

on 192 accountants, managers, and employees who operate and manage information systems in Ho Chi Minh City in 2014 The author used Cronbach’s Alpha coefficients, EFA methods to assess the reliability, value of scale, and linear regression analysis to test hypotheses The results of the study show that the quality of an accounting information system is influenced by the effectiveness

of internal control system as well as the application level of IT in accounting These results are expected to offer managers a basis for establishing a quality accounting information system that provide users with quality accounting information Vũ Thị Thanh Bình (2018) dựa trên nghiên cứu của Sajadi và cộng sự (2008) bao gồm:

(i) Cải thiện chất lượng của hệ thống báo cáo tài chính;

(ii) Cung cấp thông tin trợ giúp ban giám đốc ra các quyết định kinh doanh; (iii) Hỗ trợ hệ thống kiểm soát nội bộ hiệu quả hơn;

(iv) Giúp cải tiến quá trình đánh giá hiệu quả làm việc;

(vi) Giúp thực hiện các nghiệp vụ kế toán thuận tiện

Figure 4 Research model of Nguyen Huu Binh (2016)

4 PROPOSING RESEARCH MODEL FOR VIETNAMESE COMPANIES

The authors will conduct a review of previous studies in the world and in Vietnam related, then proceed to a collection of impact factors through inference techniques,

Use of IT

Quality of AIS

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in-depth interviews with experts After that, the authors continued to adjust the impact factors to ensure the suitability of characteristics of enterprises in Vietnam Based on the variable groups of the above studies, each concept approaches the model from a different perspective and based on the actual research at Vietnamese enterprises, the authors propose the model:

Figure 5 Proposal of research model for factors affecting the quality of AIS

Source: Proposal of the authors

* The linear regression equation for the proposed research model is as follows

Qais = a + β1AT + β2IT + β3OC + β4LD+ β5MC + β6TM + β7MK + ε

Inside:

β1, β2, β3, β4, β5, β6, β7, β8: respectively are the regression coefficients of the variables AT, IT, OC, LD, MC, TM, MK, FS

Qais: Quality of accounting information systems

AT: Accounting staff

IT: Information Technology

OC: Firms’ culture environment

LD: The system of legal documents, the supervision of the State

MC: Management’s Commitment

TM: Top Management Support

MK: Owner/Managers’ Knowledge

Information Technology (X2)

Firms’ culture environment (X3)

The system of legal documents, the supervision of the State (X4)

Quality of Accounting Information System

Accounting staff (X1)

+ H5

Management ‘s Commitment(X5)

+ H3

Top Management Support (X6)

+H2

+ H1

+ H6

+ H4

+ H7

Owner/Managers’ Knowledge (X7)

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* Concept of observed variables

+ Dependent variable: Quality of AIS

The system consists of integrated components / elements to carry out activities to achieve the organization's goals (Wilkinson et al., 2000; O’Brien and Maracas, 2009; Susanto, 2013) The term quality can also mean success (Delone and McLean, 2003; Seddon, 1997) or efficiency (Gelinas, 2012) or user satisfaction (Stair and Reynoalds, 2012) The term quality of the technical information system proposed

by Sacer et al (2006) is used to demonstrate the integration of many components

of the AIS, including hardware, software, human, network and quality database, job quality and user satisfaction Susanto (2013) explained that the quality of AIS is an integrated system of IS including elements and subsystems that are related to each other Integration elements also referred to as components of AIS include hardware, software, people, processors, databases and networks (Susanto, 2013) On the other hand, Bagranof et al (2010) think that the quality of AIS is a collection of data and data processing to create necessary accounting information for users

+ Accounting staff

Accountants staff include a full range of factors related to skills, knowledge of employees in the field of engineering and business that allow them to fulfill their accounting responsibilities (Xu, 2003) Accountants staff are in great need of the skills and knowledge of accounting and systems to be able to detect errors of data in the relevant system as well as to provide useful information analysis user In addition, accountants make accounting estimates at the end of the period, so the reliability

of the information is affected by the judgment of accountants (Nguyen Bich Lien, 2012)

+ Information technology

Since the 1990s, Huber (1990) has argued that advanced IT use leads to faster and more readily available information, including external information, internal information and information encountered previously, thus leading to to increased accessibility Large resources companies can gain a competitive advantage by deploying IT to support or enhance their business (King et al., 1989) Chan et al (1997), Hussin et al (2002) defided that IT relevance is related to the ability to adjust

IT and business strategies IT is any computer-based tool that people use to work

to provide information and support the organization's information processing needs (Hagg et al., 2008)

+ Firms’ culture environment

The environment is a component that describes the issues of corporate culture, organization, monitoring, inspection, laws related to enterprise operations and ERP software (Nguyen Bich Lien, 2012) Environmental factors can be defined as external factors that exist beyond the control of business managers Competitive pressure is also one of the environmental factors, referring to the level of pressure that businesses feel from competitors in the industry Corporate culture contributes

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to making a difference between businesses and is considered to be the tradition of each enterprise, it is the private property of the enterprise and a management tool, bringing competitive advantages for businesses

+ System of legal documents, State supervision

The main legal document system is the legal framework governing accounting work including the Law on Accounting, the accounting regime, circulars and decrees (Xu

et al., 2003; Vo Van Nhi et al, 2014 ; Nguyen Thi Hong Nga, 2014) As such, the legal document system affects the whole process of the information technology system from data collection to processing, storage and information provision through the use of documents and accounts , books, reports and methods and duration of information storage In addition, to strictly manage the revenues and expenditures in the enterprise, ensure the spending activities of the business for the right purpose, saving, fighting against waste, efficiency businesses

+ Management Commitment

Management Commitment is an important factor in determining the working behavior

of employees in organizations and a sense of duty of each employee in the organization Based on the commitment model proposed by Meyer and Allen (1997) called the

"three-component commitment model", the scale of commitment committed to the organization includes: emotional commitment, commitment Calculation based calculations and commitment based standards George and Jone (2012) in the study only presented two components of commitment to an organization, including emotional commitment and commitment An emotional commitment exists only when employees in the organization feel happy to be a member of the organization, they trust and feel good about staying at the organization

+ Top Management Support

According to Jen (2002), the quality of AIS cannot be separated from the Top Management Support Top Management Support will improve quality of accounting information system because there is a definite link between top management support during the process in develop and operate accounting information systems

in a quality way Moreover, Soegiharto (2001) used top management's support factor

in planning and controlling the accounting information system as an indicator to measure top management support in quality of system

+ Owner/Manager Knowledge

Owner/Manager Knowledge who have both knowledge of IT and accounting will have a better position than those who do not have knowledge in the context of the AIS because they can understand the company's AIS requirements and then use its IT knowledge to identify and deploy IT in accordance with the information needs

of the company Therefore, it is expected that in organizations including owners / managers with sufficient knowledge of accounting and information technology, AIS will be more qualified