A.

Project Title
An Explanatory Study on the Status Trends, Usage of Information System (IS) and
Problems Arise of Application of Computerised Accounting System (CAS) among SMEs
in Malaysia.
Keywords: application of computerized accounting systems, CAS, status trends, usage of
Information System (IS) and problems

B. Brief description on the project background.

This research is about application of technology in a business context. Technology plays

an important part in the organization as it can be part of the reason a particular company
are being competitive advantage. Besides that, the concept of IT as a business enabler has
increase the demand of using computerized accounting system in the business especially
due to the increasing complication of business transaction nowadays. The more
complicated the financial activities of the business, the more likely a computerized
accounting system is needed to ensure effective financial reporting. Nevertheless, as
today the world is centered around IT which is known as the IT-centric world by some
authors, organisations clearly can neither operate not survive without information systems
(Gelinas, Dull and Wheeler, 2011).

Some smaller businesses or also known as the Small Medium Enterprises, SMEs and
micro enterprise still practicing manual accounting system, the old-fashioned
bookkeeping, but the trends of switching and applying computerized systems have been
widely spread these few years as computerized system promotes simplicity in terms of
user-friendly and among others features. Nevertheless, the switching in trends have been
boosted up due to the implementation of Malaysia government tax policy of GST by
April 2015 (Treasury.gov.my, 2015).

There might be problems arises for the companies when applying CAS after the
implementation of the government tax policy of GST and this project is to study whether
any problems arises for businesses when applying the CAS especially for those SMEs
that apply CAS due to the implementation of GST.

Therefore, the purpose of this project aims to explore the application of computerized
accounting systems in business among respondents and the correlation between the status
trends, usage of Information System (IS) and problems arises from the application of the
CAS.

C. Brief description of the project objectives

Understanding the trends, usage of Information System (IS) and problems in the
application of the CAS is important for companies as it will allow companies that are
applying or going to apply CAS into their business to be successfully adopt the system
and implement it. Therefore, the main objective of this project is to study the application
of computerized accounting system in the business among the SMEs. To specify the
study, Kuala Lumpur will be chosen as the location of the research. Below will be the
sub-objectives:

Objectives:
1. To access the respondents characteristics among the SMEs in Kuala Lumpur.
2. To determine the trends of CAS application in the business among the SMEs in Kuala
Lumpur.
3. To determine the usage of Information System (IS) in relation to CAS application in
the

business

among

the

SMEs

in

Kuala

Lumpur.

4. To determine the problems arises from CAS application in the business among the
SMEs

in

Kuala

Lumpur.

5. To identify the correlation between the trends, usage of Information System (IS) and
problems with the CAS application in the business.

Significance
The importance of why this research needs to be conducted is as follows. The researcher
hopes that this study will contribute benefits in terms of theoretical, management as well
as academic perspectives.

1. Theoretical perspective.

In terms of theoretical, this research would help other individual to prove the model and
also support further research, generated good ideas and so provides better understanding.

2. Management perspective.

This study could help the management to understand the trends, usage and problems
arises while applying the CAs into the business that will enable the company to apply the
system efficiently and effectively, as well as early warning for any possible problems
might arises during the application of the system, hence precautions and proactive actions
could be taken.

3. Academic perspective.

This research will benefit other student to understand the trends, usage and problems of

CAS application and could be a reference or guideline for other researcher who are
interested to study CAS application in another place.

Limitation

The reliability of the study depends on the honesty and memory of the respondents in
giving the information needed. The findings from this explanatory study should not be
generalized as a whole as it only consist a small number of SMEs in Kuala Lumpur and
the results are obtained from this study could be unique to this particular sample. Time
and cost constraints are also part of the limitation for this study.

D. Brief description of the models/theories/ concepts that will be used in this

proposal.

This study will based on the simple model of accounting information system which is the
three-step process as follows (Warren, Reeve and Duchac, 2015):-

Analyse
user
inform atio
n needs

Design
the
system to
m eet the
user
needs

Im plem en
t the
system

The basic accounting system would be used as the model to assess the application of
CAS in the business among SMEs as they are different from those large corporate where
high degree of complexity business transactions are needed to be processed by their CAS.
A simple CAS should have included all the basic component of accounting that a

business should practice such as the methods and procedures for collecting, classifying,
summarizing and reporting a businesss financial and operating information

Besides that the following models will be used as well:

Diagram 1. The sub-system the accounting IS. (D. Kimmel, J. Weygandt and E.
Kieso,

2011,

Image

available

at:

http://dilipchandra12.hubpages.com/hub/Accounting-as-an-InformationSystem#)

E. Academic research being carried out and other information, techniques being
learnt.

The following is just a part of a list of main books used for this project. There are other
books and journals which will be referred to and used in the project.

D. Kimmel, P., J. Weygandt, J. and E. Kieso, D. (2011). Financial Accounting 6th Edition
for Monmouth University. 6th ed. John Wiley & Sons, Incorporated.

Gelinas, U., Dull, R. and Wheeler, P. (2011). Accounting Information Systems. 9th ed.
Cengage Learning.

J. Lyons, R., F. Nolan, K. and Wah, C. (1991). Computer System for Financial Analyses
and

Reporting.

Google

Scholar.

[online]

Available

at:

https://www.google.com/patents/US4989141 [Accessed 30 May 2015].

Ssm.com.my, (2015). Total of Registered Companies and Businesses | Suruhanjaya

Syarikat Malaysia (SSM). [online] Available at: https://www.ssm.com.my/en/statistictotal-business-companies?field_date_year_value%5Bvalue%5D%5Byear%5D=2015
[Accessed 29 May 2015].

Treasury.gov.my, (2015). Why does the Government want to implement GST? Why now?.
[online]

Available

at:

http://www.treasury.gov.my/index.php?

option=com_content&view=article&id=2827:why-does-the-government-want-toimplement-gst-why-now&catid=506&Itemid=2493&lang=en [Accessed 29 May 2015].

Warren, C., Reeve, J. and Duchac, J. (2015). Accounting. 26th ed. Cengage Learning.

Wong,

C. (2013).

eCommerceMILO.

Malaysia's
[online]

SME

statistics, and e-commerce readiness

Ecommercemilo.com.

Available

http://www.ecommercemilo.com/2013/12/malaysia-sme-statistics-ecommercereadiness.html#.VWi9Kc-qqko [Accessed 29 May 2015].

|
at:

F. Brief description of the materials/ methodologies needed by the proposal.

This is a quantitative study. In terms of objectives, this is an explanatory study. Looking

into the sampling methodology, the population in this study is the SMEs (Small Medium
Enterprises) in Malaysia. The sample in this study refers to the SMEs in Kuala Lumpur.
In term if sampling methodology, this study had used quota sampling methodology. The
target group will the SMEs in Kuala Lumpur.

The total number of registered companies and businesses under SSM, the Companies
Commission of Malaysia, there are close 5.6 million of total business and roughly 1.1
million of local companies registered until 31st December 2014 (Ssm.com.my, 2015).
Most of the local companies registered are SMEs while most of the businesses stated here
are micro enterprises and these figures are huge to be said. To be more precise, according
to Census Report on SMEs 2011 there was total of 645,136 SMEs operating in Malaysia
(Wong, 2013), and that was 3 years back. For the year of 2015, there is an average of four
thousands of local companies being registered under SSM from January till April, and
this can be deduced that the total number of SMEs operating in Malaysia has significantly
increased since then. This amount of SMEs is considered as a large group sample. The
result from the Raosoft Sample Size Calculator suggested that 100 is the minimum
sample size of the survey with 50% of estimate response.

A quota sampling will be conducted among an estimate amount of SMEs through survey
and questionnaires. Graphical presentation such as histogram, bar charts and pie charts
will be used to ease the interpretation work.

G. Brief descriptions of the evaluation and analysis proposed for his project.

In this research paper, the research hypothesis is formed comprising the null hypothesis
(Ho) and the alternative hypothesis (Hi). Besides that, the study also employed the work
of Pearson Moment Correlation test to examine the relationship between variables as can
be seen from the hypothesis of the research.

1. The relationship between trend and the application of CAS in SMEs

Ho: There is no relationship or no significant correlation
Hi: There is a relationship or significant correlation
2. The relationship between the usage of Information System (IS) of information system
and the application of CAS in SMEs
Ho: There is no relationship or no significant correlation
Hi: There is a relationship or significant correlation
3. The relationship between the problems arise and the application of CADS in SMEs.
Ho: There is no relationship or no significant correlation
Hi: There is a relationship or significant correlation

This study helps to make contribution towards the research on the application of CAS in
business and try help to find a way to improve the computer system that the businesses
are using which will help businesses to improve the efficiency and effectiveness in
recording business transactions and financial reporting.

H. Illustration of how this project will benefit the future employability.

This research project will allow that company to understand how the business in adopting
and applying one technology. By understanding how the trends of CAS application and
the problems that possible arise, company can apply solutions that are specifically deal
with the elements that will influence the system being applied successfully. In addition,
this research allows the researcher to be able to learn and develop the skill of critical
thinking and strategic planning while doing the research.