The Promotion of Corporate Governance and Transparency by using Accounting Software

by

ACKNOWLEDGEMENT

I am very grateful to God who has given me the grace to start this course and end it successfully. I would like to thank my family especially my dad, who worked really hard and stood by me all the way. God bless my family who gave me full support and encouraged me. I would like to thank my supervisor, for having patience and support. Finally to my friends and all who have made the completion of this project a success, thank you and God bless you.

DECLARATION

I declare that the work in this dissertation was carried out by me. The project is my own original work and has not been submitted elsewhere in fulfilment of the requirements of this or any other award.

SIGNED: ............................................................. DATE: ..........................

ABSTRACT

Good governance of a firm and the firm's use of information technology are not separate considerations. An agent's behavior can be influenced or controlled through the effective use of auditing, control systems, budget restrictions and incentive compensation, all of which can be facilitated by IT. So important is information to the effective control and operation of a firm that it has been suggested that information is replacing ownership as the source of governance power, and that IT is influencing the reinvention of the organization . This study will help us to make an evaluation of the degree to which the use of Accounting Software can help promote Corporate Governance and Transparency.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1 Background of the Study1

1.2 The Influence of Governance and IT on Organizational Performance4

1.3 IT Can Mitigate Governance Problems6

1.4 Purpose of the Study8

1.5 Aims and Objectives of the Study……………………………………………………….8

1.6 Scope of the Study9

1.7 Research Questions9

CHAPTER 2: LITERATURE REVIEW10

2.1 Performance Measure of firm10

2.2 Information Technology and Firm Performance12

2.3 Information Technology and Strategy13

2.4 Performance and Structure14

2.5 Success and Failure with Information Technology16

2.6 Examining the Reasons for IT Successes and Failures18

2.7 Accounting, Information Technology and Corporate Governance20

2.8 Research in Information Technology in Corporate Governance21

2.9 Corporate Governance and Transperancy in Business Reporting22

2.10 The situation of Corporate Governance in China24

CHAPTER 3: METHODOLOGY27

3.1 Research Design28

3.2 Secondary Research Methods29

3.3 Qualitative Research Method29

3.4 Significance of the research33

3.5 Literature Search33

3.6 Reliability and Validity33

3.7 Ethical Concerns34

CHAPTER 4 : DISCUSSION36

4.1 Information Technology and Governance36

4.2 The Importance of IT in the Governance of the Firm37

4.3 Responsibility for IT governance40

4.4 Information Technology and Competence43

4.5 Sarbanes-Oxley and Information Technology45

4.6 Corporate Governance and Transparency46

CHAPTER 5 : CONCLUSION50

5.1 Recommendations for Future Research52

REFERENCES53

APPENDIX………………………………………………………………………………………59

CHAPTER 1: INTRODUCTION

1.1 Study background

A study of corporate governance requires an understanding of its foundations in agency theory, brought forth in The Wealth of Nations by Adam Smith in 1776. Smith recommended that an administrator (i.e., an agent) without straight possession of an organization will not create the similar judgments and decisions, nor implement the identical concern as would a proprietor (i.e., a principal) of that company. The agency problem in such a relationship results when the agent seeks to maximize personal utility by acting in egotism which is not forever in the ...