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The Effect Of ERP System Implementations on the Usefulness of Accounting Information

The Effect Of ERP System Implementations on the Usefulness of Accounting Information. Research Question. Does ERP implementation affect the usefulness of accounting information?. Accounting information usefulness. Two primary qualitative characteristics Reliability Relevancy Timeliness.

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The Effect Of ERP System Implementations on the Usefulness of Accounting Information

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  1. The Effect Of ERP System Implementations on the Usefulness of Accounting Information

  2. Research Question Does ERP implementation affect the usefulness of accounting information?

  3. Accounting information usefulness Two primary qualitative characteristics • Reliability • Relevancy • Timeliness

  4. Hypotheses H1: ERP implementation reduces reliability of accounting information. H2: ERP implementation improves timeliness of accounting information.

  5. Theoretical Models ERP Reliability ERP Timeliness

  6. Reliability Model ERP Reliability Conceptual Level Construct Validity ERP Discretionary Accruals Operational Level

  7. Relevancy Model ERP Relevancy Conceptual Level Construct Validity ERP Reporting Lag Operational Level

  8. Research Design One-group pretest - posttest design • tests a single group before and after a treatment We test a group of companies before and after the implementation of ERP.

  9. Regression Model-Reliability Analysis • Dependent Variable---Discretionary Accruals • Independent Variable---Pre (no ERP) and Post (ERP) • Control variables • To control for confounding factors and increase internal validity

  10. Regression Model-Relevancy Analysis • Dependent Variable---Reporting Lag • Independent Variable---Pre (no ERP) and Post (ERP) • Control variables: • To control for confounding factors and increase internal validity

  11. Data • We obtain our sample of ERP system adopters from a proprietary database supplied by a leading international provider of ERP systems. • Sample size • Reliability analysis:1645 observations • Relevancy analysis: 1585 observations

  12. Reliability Analysis Results

  13. Relevancy Analysis Results

  14. Conclusions • ERP implementations reduce accounting information reliability. • ERP implementations improve accounting information relevancy.

  15. Limitations • Research Design-pretest and posttest design • Advantage: comparisons are made by the same subjects. • Disadvantage: confounding factors Alternative Designs?

  16. Limitations • Measures for reliability and relevancy • Construct validity

  17. Limitations • Sample selection • Selection bias • External validity

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