Accounting Information Systems of Mobile Telecommunication Companies in Bangladesh

Abstract

Mobile telecommunication companies h Ave emerged as an important economic sector in present time and it is adding a lot in boosting up the economy of Bangladesh. The mobile telecommunication companies in Bangladesh are aiming at providing cost effective and quality services to the customer as customer satisfaction is most important for the survival and success of any company. For this purpose, the mobile telecommunication companies need an efficient AIS for providing necessary information to its various users. The user group includes creditors, investors, lenders, regulators, trade union and management and many one who take their necessary decisions based on the information by the annual reports of the companies. Appropriate and efficient AIS is needed by the companies to provide relevant and reliable information to the interested users in time. The appropriate AIS depends on the relevant accounting policies, principles and most importantly the standards set by both national and international bodies. Legal framework of a country gives clues to framing appropriate AIS for an organization. At present AIS bears significance as it helps the management evaluate the past operations, control the present actions and through them to decide the future activities of any organization. The objectives of the study are to know the major characteristics of AIS, analyze the opinions of the respondents regarding the application of legal framework and compliance with accounting standards, judge the efficiency of AIS through selected indicators, identify the factors influencing the efficiency of AIS and analyze the opinions of the respondents regarding the qualitative characteristics of accounting information produced by AIS. There are six mobile telecommunication companies in Bangladesh and researcher has selected two mobile telecommunication companies viz Grameenphone Ltd. and Tele talk Bangladesh Limited for five years starting from 2008 to 2012. Three sets of close - ended questionnaires were used in the light of objectives and hypotheses of the study for the selected respondents. First set is for company executives, second set is for experts in accounting (chartered accountants, cost and management accountants and teachers in accounting) and third set is for security consultants. The present study is based on both primary and secondary data. The secondary data have been collected from the audited annual reports of the selected companies and primary data for the purpose of the present research study have been collected from 195 respondents consisting of 60 chartered accountants (CA), 50 cost and management accountants (CMA), 30 teachers in accounting (Acad.) and 55 security consultants (SC). Likert five point rating scales are used in two sets of questionnaire for measuring the opinions of the respondents. For judging the reliability of data the reliability test is done through Chronbach Alpha test and Split-half test. After obtaining the data from the different sources, various statistical tools like mean values, standard deviation, coefficient of variation, t-test, Chi-square test and ANOVA test have been used to analyze the collected data. The AIS of the selected companies is fully computerized and accounting software is used for recording transactions, processing of transactions and preparing the financial statements to the interested users. The financial statements are prepared on going concern basis under the historical cost convention using Generally Accepted Accounting Principles (GAAP) in accordance with accounting standards, the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws in Bangladesh. The selected companies follow the provisions of IAS/BAS 1, 2, 7, 8, 12, 16, 17, 18, 21, 23, 24, 32, 34, 37 and 38 respectively and also follow the provisions of International Financial Reporting Standards (IFRSs)/Bangladesh Financial Reporting Standards (BFRSs) for preparing and presenting the financial statements. In the evaluation of the operating results of the selected companies, it is evident that the Company # 1 could earn good profit during the study period but the performance of Company # 2 is not satisfactory because it has been continuously facing loss for the last several years with the exception of 2011. The operating performance of Company # 1 is better than that of Company # 2 during the study period. Some hypotheses have been developed regarding the operating results of the selected companies and all hypotheses are rejected which means that there is significant difference between the operating results of the selected companies. In the analysis of the opinions of the respondents, it is evident that the 50.00% of the respondents think that the selected companies moderately apply legal framework for preparing the financial statements and the null hypothesis is accepted which means that there is no significant difference of opinions among the respondents regarding the application of legal framework for preparing the financial statements of the selected companies. It is also evident that 65.00% of the respondents think that the selected companies moderately comply with accounting standards for preparing the financial statement and the null hypothesis is rejected which indicates that there is significant difference of opinions among the respondents regarding the degree of compliance with accounting standards for preparing the financial statements of the selected companies. To evaluate the efficiency of AIS of the selected companies, some indicators have been identified. It is evident that the 91.43% of the respondents opine that the effective internal control system, 62.86% of the respondents think that the proper security measure, 65.71% of the respondents think that good documentation, 60.00% of the respondents opine that the separation of operation from accounting, 80.71% of the respondents think that the extent of disclosure, 63.57% of the respondents opine that the cost effectiveness, 56.43% of the respondents think that the flexibility to meet future needs, 47.14% of the respondents reveal that the processing power of accountants and 79.29% of the respondents reveal that the independent internal and external audit are important way to judge the efficiency of AIS. It is also evident that the 40.71% of the respondents think that the all indicators are important to judge the efficiency of AIS of the selected companies. In addition, the 56.92% of the respondents opine that accounting information produced by AIS is moderately adequate and the null hypothesis is accepted, 60.00% of the respondents think that the accounting information produced by AIS is moderately informative and the null hypothesis is rejected and 57.95% of the respondent’s state that the accounting information produced by AIS is moderately concise and the null hypothesis is accepted. It is found that there is no significant difference of opinions among the respondents regarding adequacy and conciseness of accounting information produced by AIS and there is significant difference of opinions among the respondents regarding the informativeness of accounting information produced by AIS of the selected companies. The study shows that 57.14% of the respondents opine that the size of the company, 44.29% of the respondents think that the earning of the company, 78.57% of the respondents reveal that the availability of trained accountant, 80.00% of the respondent state that the internal control system, 52.86% of the respondents think that the internal audit, 47.14% of the respondents opine that the internal check, 72.86% of the respondents reveal that the attitude of management, 51.43% of the respondents think that the organizational structure, 45.72% of the respondents think that the resources of the company and 69.29% of the respondents opine that the good use of information technology greatly influences the efficiency of AIS and the hypotheses are accepted which means that there is no significant difference of opinions among the respondents regarding these various influencing factors of the efficiency of AIS of the selected companies. It is found that 36.43% of the respondents think that the age of company moderately influences the efficiency of AIS and the null hypothesis is accepted which indicates that there is no significant difference of opinions among the respondent regarding the age of company as an influencing factor of the efficiency of AIS. It is also found that 42.14% of the respondents opine that the rank of responsible executive moderately influences the efficiency of AIS and the null hypothesis is rejected which means that there is significant difference of opinions among the respondent regarding the rank of responsible executive as an influencing factor of the efficiency of AIS of the selected companies. The study also shows that 54.36% of the respondents think that the accounting information produced by AIS of the selected companies is moderately relevant, 55.39% of the respondents opine that the accounting information is moderately reliable, 42.05% of the respondent state that the accounting information is moderately useful, 50.25% of the respondents think that the accounting information is moderately understandable, 51.79% of the respondents reveal that the accounting information is moderately comparable and 53.85% of the respondents think that the accounting information is moderately consistent and the null hypotheses are accepted which indicate that there is no significant difference of opinions among the respondents regarding the various qualitative characteristics of accounting information produced by AIS and disseminated in the annual reports of the selected companies. Based on the study findings, researcher suggests that the transparency of financial statements shown in the annual reports issued by the selected companies should be ensured. The preparation of the financial statements must ensure the various qualitative characteristics of accounting information. The strict compliance with the accounting standards, the Companies Act, 1994, the Securities and Exchange Rules 1987, the Income Tax Ordinance 1984 etc. should be monitored by BSEC. The accountants who are responsible for performing the various activities of AIS should be trained properly so that AIS can deliver relevant information for all concerned. Accounting information should be more timely and well-structured for various interested users so that they can make effective, dynamic decisions. Internal control activities, functions of audit committee, management control activities and corporate governance etc. should be coordinated. ICAB and ICMAB may try to organize more seminars for developing AIS, MIS, Decision Support Systems, Executive Information System and Expert System etc. for our business organizations.