Title 1: Constraints of Computerized Accounting System Adoption among SMEs in Cagayan de

Oro City
Title 2: Constraints Affecting the Intention of Adopting Computerized Accounting System
among SMEs in Cagayan de Oro City

Introduction
A business's financial data is organized using an accounting system. the recording of
business transactions such as sales, purchases, assets, liabilities, and equity, creating financial
reports that include an aggregated breakdown of the transactions can be utilized to keep an
eye on, assess, and enhance past performance, present state, and be able to foresee a
company's possibilities. It aids in maintaining records to prevent and detect in order to give
users accurate financial information, scams and hostile actions must be avoided.
The world is constant changing where technology became the vital factors that is being
used in our daily lives. Global competition puts significant pressure on businesses to minimize
costs, maximize profits, and expand growth in order to thrive in this rapidly shifting
environment. Accounting is referred to as a “language of the business” as what Warren Buffet
expressed. In that circumstance, an accounting would be necessary. The intelligence or
information delivery system of that language is the information system. Accounting is a system
known as an information system collects, documents, stores, and processes data to create
information to make sounding decisions. (Romney and Steinbart, 2012)
According to Yuvaraj and Kibret (2013), accounting information system plays a vital role
if it has a potential for making administrative decision otherwise it misleads user’s idea and also
that lead them to make wrong decisions. Bookkeeping approaches remain popular in the
Philippines, they’re rapidly becoming obsolete in the face of an increasingly fast-paced and
demanding economic landscape.

Conceptual Framework
The content of this study is to determine how are the determinants affect the adoption
of computerized accounting system (CAS) in small to medium enterprises. The dependent
variables are cost (installation cost), business size, lack of government support, and perceiving
usefulness. These variables will show if there is a significant relationship between the
determinants of CAS and adoption of CAS among SMEs.
Schematic Diagram

Cost
(Installation
Cost)

Business Size

Lack of
Government
Support

Perceived
Ease of Use

Literature Summary
Technology transformation has made a tremendous global impact in all the aspects of
life. It has significantly changed the nature of the business and created competitive advantages.
Hence, Business Firms have to change the way of keeping records. The application of
computerized system facilitates quick reporting, and easy processing and storage
(Murungi&Kayigmba, 2015). According to (Sam et al., 2012) Previous studies reveal the
importance of maintaining proper accounting system. With a formal accounting system, firms
can get many advantages as it provides accurate and comprehensive results of operations.
The conducted study of Rogers (2016) was to examine how small business owners in
Central Ohio come to accept and use computerized accounting systems (CAS). The results of
this study showed a positive correlation between perceived ease of use, perceived usefulness,
and the intent to adopt CAS. However, the result has a gap about the role that computerized
accounting system may play in reducing business failure.
 As discussed in various literatures, adoption of computerized accounting information
system can be affected by several factors. Factors that have gained more focus in this study are
discussed in detail in the following constraints.
According to (Ahmed et al, 2016) Information technology was limited to large
companies in previous decades and can be used by small and medium enterprises to enhance
their performance. In relation to Gwangwava et al (2012), firm size of a business also influences
the intention to adopt accounting information systems. The size of firm gives money related
assets to acquire a new innovation and empowers spending on innovative activities. Larger
firms are more likely to be able to invest large amounts of capital, time and learning in order to
use the technologies than smaller firms.
The study of Kumar (2019) designed to identify the factors affecting the adoption of
computerized accounting system (CAS) among SMEs in Jaffna District. The study used
descriptive statistics, correlation, and regression analysis. It was caused to recognized the
constraints which affect the adoption of computerized accounting system among SMEs and to
assist the growth and social development. The result shows that the government of Sri Lanka
should support the adoption of CAS, and SMEs should understand the benefit and value in
adopting CAS that will lead growth for SMEs in Sri Lanka. Haleem (2016) studied the factors
affecting CAS with reference to government department in the Ampara District in Sri Lanka and
he found that infrastructure, human resource computer proficiency, government support are
important factors in implementing CAS. Therefore, no support coming from the government
itself will lead to business downfall or limit to grow by itself.
According to Muhammad et.al (2017), perceived ease of use means the user perceived
that the system is very simple to use. Therefore, it is believed that users’ behavioral intention to
use the system increases when system is perceived not difficult to use. Users that perceive
accounting information systems to be easy to use are more likely to adopt the technology than
those that do not. In connection with this, Legrisa (2003) suggested that perceived ease of use
is one of the most important factors in explaining accounting information technology adoption.
Thus the behavioral intention of chief executive officer to adopt accounting information
technologies is influenced by their perception of the characteristics of electronic means.
Therefore, chief finance officers who perceive accounting information technologies to be easy
to understand and use, are more willing to adopt electronic means and if the perception is the
opposite it leads to no means of using or adoption to CAS.
In the study of Chen, et. Al. (2016) the adoption of computerized accounting system is a
decisive factor in surviving in the competitive business environment. Their study shows that the
determinants have significant influence to the adoption of CAS among SMEs, and are relative
advantage, compatibility, complexity, trial ability, observability, top management,
organizational readiness, industry, market scope, customers, competitors and external support.
However, the study did not find enough evidence that the size of the business was a significant
determinant of CAS adoption.
 The study of Mohd Sam, et. Al. (2013) aimed to investigate the practice of CAS among
SMEs and to determine the determinants affecting the adoption of CAS among SMEs in Melaka.
Their study shows that the rate of adoption of CAS among SMEs is high. In addition, the analysis
also shown significant relationship between the independent variables and dependent variables
which proves that the relationships have been substantiated and contribute to the usage of CAS
adoption between SMEs in Melaka. The findings indicate that CEO innovativeness; perceive
ease of use and business competitiveness negatively correlated to the adoption of CAS. Results
reveals that only perceive usefulness are significantly positive correlated to CAS adoption. In
conclusion, the adoption of CAS in Melaka was caused by its usefulness.

Theoretical Framework
This study is basically anchored by the Technology Acceptance Model Theory (TAM) of
(Davis, 1989) that is useful in studying variables that affect the adoption of CAS. It is designed
to measure the adoption of new technologies and will determine how computerized system is
accepted to its potential users. The factor that encourage people to use the technology is
behavioral intention.
This study is consolidated by the Unified Theory of Acceptance and Use of Technology
(UTAUT) of (Venkatesh, et.al., 2003). Behavioral intention is determined by the actual use of
technology according to the UTAUT theory. The adoption of technology dependently affects
business performance, business effort, social interactions, and facilitating conditions. According
to Frissen (1999), the decision making of SMEs is done by the person in charge, either the
entrepreneur, director or the self-employed owner. Wherein they have different perception in
terms of usefulness, either the outcome is negative or no adoption of CAS at all.
According to Papagiannidis & Marikyan, (2020) the advances of ICT changes the
business’ way of conducting its operations. The application of technologies in the business
organization will ensure the benefits such as increasing its productivity, well-being of
employees, and customer satisfaction. Consequently, the adoption of computerized accounting
system is beneficial for companies such as SMEs. However, according to Papagiannidis &
Marikyan, (2020) in achieving these benefits, companies must allocate a massive budget for the
installation cost of the technology. Investment of ICT does not guarantee a success deployment
due to its low returns possibilities.
Statement of the Problem
The objective of this study is to identify the Constraints of adoption of Computerized
Accounting System among Small and Medium Enterprises in Cagayan de Oro City. The study
aims to answer the following questions:
1. How does the installation cost affect the adoption of CAS?
2. How does the lack of government support affect the adoption of CAS?
3. How does the business size affect the adoption of CAS?
4. How does the perceived usefulness affect the adoption of CAS?
5. Is there a significant relationship between the determinants of CAS and the adoption
of CAS among SMEs?

Hypothesis
The study was guided by the following hypotheses:
1. There is no significant relationship between the installation cost and the adoption of
CAS among SMEs.
2. There is no significant relationship between the lack of government support and the
adoption of CAS among SMEs.
3. There is no significant relationship between the business size and the adoption of CAS
among SMEs.
4. There is no significant relationship between the perceived usefulness and the adoption
of CAS among SMEs.