ACCOUNTING INFORMATION SYSTEMS AND FINANCIAL PERFORMANCE OF PUBLIC UNIVERSITIES IN WESTERN REGION

Abstract

Accounting information systems are vital in managing entities as they put internal control mechanisms in place and enhance decision-making processes that improve efficiency and financial performance. However, in public universities, they seem not to be quite efficient since they are still experiencing challenges concerning internal controls. Several studies linking AIS and financial performance have been conducted though none focused on universities hence the lack of information on how they influence universities' performance. Therefore, the purpose of this study was to establish the influence of accounting information systems on the financial performance of public universities in Western Region. Specific objectives were to: determine the influence of financial reporting systems on financial performance, analyses the influence of payables management systems on financial performance, examine the influence of receivables management systems on financial performance, and investigate the influence of internal control systems on the financial performance of selected public universities in Western Region. The technology acceptance model, diffusion of innovation theory, and balanced scorecard theories guided the research. The study targeted 215 respondents from 10 selected public universities in Western Region, where simple random sampling was used to obtain a sample of 138 respondents. The study adopted a pragmatic research philosophy and employed a sequential exploratory research design. Data was collected using questionnaires and analysis of audited financial statements. Data was analysed via descriptive and inferential statistics. Multiple regression analysis results indicated that financial reporting systems, payables management systems and internal control systems had a significant negative influence on financial performance (net surplus/deficit) with coefficients of -0.214, -0.136, -0.253 and p values of 0.017, 0.021, and 0.035 respectively which are less than 0.05. Receivables management systems had an insignificant negative influence on financial performance (net surplus/deficit) with a coefficient of -0.105 and a p-value of 0.063, which was greater than 0.05. The study concluded that improving financial reporting systems, payables management systems, and internal control systems would improve financial performance by reducing the net deficit of public universities in Western Region. The findings have a direct bearing on managers of public universities and policy makers to enable them to put strategies in place to improve the existing accounting information systems. The study, therefore, recommends that the management of public universities should enhance their systems to incorporate international financial reporting standards in the preparation of reports, enable automatic tracking of debtors and creditors to improve their liquidity position and solidify their internal controls to diminish the probability of financial loss.