Improving accounting information system of universal Vietnam steel building company limited

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYEN THI NHAM

IMPROVING ACCOUNTING INFORMATION SYSTEM OF
UNIVERSAL VIETNAM STEEL BUILDING
COMPANY LIMITED

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2017


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYEN THI NHAM

IMPROVING ACCOUNTING INFORMATION SYSTEM OF
UNIVERSAL VIETNAM STEEL BUILDING
COMPANY LIMITED

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: PROF. PHAM PHU QUOC

Ho Chi Minh City – Year 2017

SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED
FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION

The thesis proposal title: IMPROVING ACCOUNTING INFORMATION
SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDINGS COMPANY
LIMITED
Student Name: Nguyen Thi Nham
Supervisor: Dr. Pham Phu Quoc
1. General comments:
Remarks on the student’s attitude:
……………………………………………………………………………………
……………………………………………………………………
Remarks on the assignment’s academic quality:
……………………………………………………………………………………
……………………………………………………………………
2. Overall assessment:
Meet requirement for submitting
Not meet requirement for submitting
3. Other remarks:
Did the student follow the report schedule?
Yes

No

Other………………………….

The Turning plagiarism percentage:
Supervisor’s signature

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IMPROVING ACCOUNTING INFORMATION SYSTEM OF UNIVERSAL VIETNAM STEEL BUILDING COMPANY LIMITED

TABLE OF CONTENT

EXECUTIVE SUMMARY
PART I – INTRODUCTION
1. Company background
2. Company symptoms

PART II – PROBLEM IDENTIFICATION
1. Theoretical basic
2. Content of in-depth interviews
3. Verify the potential problem

PART III – CAUSE VALIDATION

PART IV – SOLUTION AND ACTION PLAN
1. Solution
2. Action plan

PART V – CONCLUSION

APPENDIX

REFERENCES

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EXECUTIVE SUMMARY
The purpose of this thesis is to assist Universal Vietnam Steel Building Company
Limited in identifying and resolving potential problem of accounting department.
The initial symptoms of the company’s accounting department come from the record of
yearly meeting of Board of Director with accounting department, this documents
mentioned following symptoms: (1) Negative cash fund in accounting reports; (2)
Duplicate payment in Accounts Payable; (3) Wrong liabilities in liabilities report; (4)
Late in payment for supplier; (5) Forgot to pay insurance 4 months for insurance office
and (6) Tax penalty. From the initial symptoms, I apply the process of Problem
identification – Solution decision – Organization of action (P-S-O) to identify problems,
find solutions and contribute action plan to improve above situation. Fistly, I identify
current problems by using necessary accounting theories as a basic to conduct in-depth
interview with 5 peoples who are working in Vienam head office. The interview found
out two problems in accounting department, there are (1) Poor in managing accounting
information and (2) Poor in accounting internal control. From that, I evaluate to find out
the potential problem is Poor in managing accounting information which influencing
significant to company’s accounting process; Secondly, informing theories to take into
account the causes of potential problem, include: (1)

lack of clearly accounting

procedure; (2) overlapping in accountant position; (3) poor in the leadership of BOD
and (4) poor in accountant’s competences. From these causes, by evaluating current
situation in the company, I found out the potential cause is Lack of clearly accounting
procedure. Thirdly, I propose possible alternatives and select the most appropriate
alternative for solving the problem of the company; Lastly, I plan the effective actions
for implementing the selected alternative - organize the procedure of accounting
information system.

PART I – INTRODUCTION

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1. Company background
Universal Vietnam Steel Buildings Co., Ltd (US Buildings) is a domestic company
which manufactures in pre – steel building business in Asia Pacific market. It was
established on August 2016 with the register capital is VND 5,000,000,000, the capital
had increased into VND 10,000,000,000 on January 2017.
Although US Buildings is not the first pre-steel building company in the Vietnamese
market, US Buildings always strive to develop sustainably and together with Vietnam
"Towards the future". US Buildings has been and will continue to provide high quality
products and perfect after-sales service to bring the highest satisfaction to customers as
well as contribute positively to the development of the pre-steel building industry and

Vietnam country.
Since its founding, US Buildings has grown steadily and continuously, not only in terms
of production scale but also sales. At present, US Buildings holds the positive position
in the pre-steel building market in Vietnam. US Buildings 's cumulative sales are over
2.000.000 tons, and the products have a large market share. From 5 employees in the
first day of establishment, up to now the number of employees of the company has
reached around 30 peoples working in three countries, there are Vietnam, Thailand and
Cambodia.
Until December 31th, 2017, the company has 9 completed projects and 5 projects are in
process. The total income from beginning until now is about VND 34,000,000,000 and
the profit gained is VND 8,000,000,000.
In addition to the business activities, US Buildings always strives to contribute
positively into the National budget by completing well the tax payment as well as
contributing to promoting the sustainable development of Vietnam’s community and
society with many long-term, practical and meaningful activities.
Throughout the history of establishment and development, with the continuous efforts
of all US Buildings employees, suppliers and partners, US Buildings has achieved great
achievements and continuously growing, fulfilling its mission to customers,
contributing significantly to the pre-steel building industry and Vietnam society.

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The mission of the company is to be one of the best organizations in Pre-Engineered

Steel Building industry, focus on both product quality and customer’s benefit. The
priority mission of the company is to provide the most excellent solution for PreEngineered Steel Building products. With the slogan “Durable Like Steel”, the company
intend to offer customers the most safety and durable steel structure.
Beside the pre-buildings industry, the company intends to broaden their business in
supplying solution for civil construction, interior design and open a plant to manufacture
steel structure in Vietnam market.

Internal structure
The internal structure of the company is a functional structure, is showed in the graphic
as follow:

Director

Vice Director

Sale Department

Engineer
Department

Purchasing
Department

Marketing
Department

Finance Accounting
Department

Graphic 1: Internal structure in Universal Vietnam Steel Buildings Company

The internal structure of US Buildings is fairly simple, because most management
functions focus on a business manager. This structure is suitable with the company in
early stage of development because it is compact. The power is focused on leader,
therefore, the decisions can be made and implemented immediately. Currently, US
Buildings is in process of recruiting many other employees and recontribute internal
structure with the key are sharing responsibility into the other persons for the long-term
development.

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2. Company symptoms
For one year of operation, US Buildings faced with many difficult problems coming
from the external environment such as finding market segment, attracting customers and
developing their products. Besides, the internal factors also influenced significantly to
the operation of the company, there are recruiting suitable employees, making rational
decisions in business and managing departments. To evaluate the result of company
activities through one year of operation, Board of Director organized a yearly meeting
with all departments focusing on evaluating business activity, employee’s competence
and performance of each department. Through the record of meeting, I summarized the
important recommends of accounting department as bellow:
In previous year, accounting department take a significant role into the development of
US Buildings, proven by the positive performances in resolving timely accounting tasks,
supporting passionately the other departments and keeping in touch with potential

customers, suppliers and government authorities. However, the operation of accounting
department is unable to avoid mistakes affected negatively to the activity of company,
the meeting evaluated and identified the negative symptoms of accounting department
need to improve which were summarized as following:

(1) Negative cash balance was showed in accounting reports
Obviously, the balance of cash account can’t in a negative number on accounting report,
however, the financial statement of year 2017 showed a negative cash balance and the
cash account in the general ledger has a credit balance. The credit or negative balance
in the general ledger cash account is caused by (1) recording inexactly cash transactions
in the general ledger cash account; (2) the amount received is not recorded while the
payment is recorded; (3) the accountants recorded transaction in the accounting books
without coinciding with the actual incurred amount due to missing data or loss of
receipts and expenses; (4) missing the comparison and controlling in cash balance in
period. The bellow table shows the different between current cash balance in balance
sheet and actual cash balance in internal cash book:
Item

Balance sheet

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Cash book/bank record

Different (+/-)


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Cash on hand

- 399.380.976

115.452.000

514.832.976

Cash in bank

2.725.438.406

2.540.435.020

- 185.003.386

Table 1 – Different of cash balance in balance sheet and cash book/bank record
(VND)
Above table showed the weakness of accounting department in recording and following
accounting data. Both items cash on hand and cash in bank recorded inexactly in general
ledger leads to data inaccuracies in balance sheet.

(2) Double payment for one invoice of supplier
In year 2017, the accounting department occurred one case of double payment. In
details, on July 10th, 2017, the company paid for Tan Co Joint Stock Company with
amount VND23,000,000 for Invoice No.0000181 issued on July 3th, 2017. However, on
November 23th, 2017, Tan Co JSC continued to request of payment for invoice above,

accounting department paid again and leads to double pay for invoice No.0000181 of
Tan Co JSC. Some days after secondly paid date, US Buildings accountant checked
liabilities and detected that the company paid twice for Tan Co JSC. This situation is
caused by (1) unchecking of accountant when paying for supplier of payment
accountant; (2) poor in control payment information of accounting department. From
above case, we can see that US Buildings is ineffective in managing liabilities results in
loss of company fund. Currently, accounting department just focus on payment
liabilities based on requires of other departments and manage liabilities sporadically and
disjointed, therefore, the balance of liabilities is inexactly.

(3) Wrong liabilities in liabilities report
At December 31th,2017, some suppliers include Phan Long Ltd., Vina-Japan Ltd., Hong
Phuc Ltd., Tan Co Ltd., Thep Ba Vina Ltd., sent the the comparison of liabilities to US
Buildings and required to provide liabilities balance. However, the current number of
liabilities balance of each supplier in company reports is different with the number

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which was given by suppliers. The different of supplier liabilities was showed as
following:
Suppliers

Supplier’s data

Phan Long Ltd.

46,845,000

US Buildings’s data

Different (+/-)

23,040,000

.23.805.000

Vina- Japan Ltd.

1,350,744,803

1.252.753.487

.97.991.316

Hong Phuc Ltd.

26,400,000

0

.26.400.000

Tan Co Ltd.

57,420,000

78,463,473

Thep Ba Vina Ltd.

88,532,292

22,528,594

21.043.473
.66.003.698

Total liability of 5

1.569.942.095

1.376.785.554

suppliers
Total liability on

.193.156.541

2.389.469.844

x

balance sheet

Proportion (%)

65.70%

Table 2 – Different of liabilities in US Buidings’s data and supplier data (VND)
From above table, we can see that only 5 suppliers accounted for 65.70% total liability
of the company, and these supplier’s liabilities were unfollowed leads to inexactly
balance of liabilities in US Buildings’s data. The different between company data and
supplier data for 5 above suppliers is VND193,156,541, in which the company data
recorded liabilities for those suppliers is VND1,376,785,554, however, following the
supplier’s data, this item currently is VND1,569,942,095. This situation affected
negatively to the operation of the company because it related to payment. If the liabilities
balance is inexactly, the payment for supplier will be lower/higher than the actual
payment. If paying higher, it results in loss of company money, in which if paying lower,
it leads to disputing with suppliers. To improve this situation accounting department

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should recheck all the contract value with suppliers, check the data from bank record
and actual cash book to verify the actual liabilities.

(4) Late in payment for supplier
Many cases occurred in Year 2017 with paying late, paying late created negative

repercussions to the relationship between the company and suppliers. The bellow data
showed the age of Phan Long Ltd. and penalty from paying late at December 31th, 2017
which calculated from suppliers:
Invoice No.

00000340

Amount of

Day of paying

Penalty

Amount of late

liabilities

late

interest

penalty

8,640,000

96

0,015%

124,416

14,400,000

62

0,015%

133,920

23.040.000

x

x

258,336

(27/9/2017)
0000384
(31/10/2017)
Total

Table 3 – The penalty of paying late for Phan Long Ltd. (VND)
The paying late for Phan Long company leads to loss VND258,336 of penalty and affect
to the reputation of the company. Besides, the company business in steel industry, the
suppliers of this type of business are limited, therefore, paying late influence negatively
to the evaluation from the supplier about the company, therefore, the company will be
difficult to use their services again. Besides, it could impact negatively on purchasing
staffs who working directly with suppliers.

(5) Forgot to pay insurance 4 months for insurance office
Recently, the company received from insurance office the notification of paying late
insurance of employees 4 months: September, October, November and December.
Detail of the notification as following:
Debt notification of Phu Nhuan insurance office

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Pursuant to the results of contributing social insurance, health insurance, unemployment
insurance, unemployment insurance (C12-TS sample) in December 2017, to the present
time the insurance debt amount of US Buildings as bellow:
Total amount of debt: VND134,069,723
Paying late penalty: VND530,648
Until December 31th,2017 the company paid: VND0
Total insurance debt the company need to pay: VND134,600,371
Paying late insurance created the penalty of VND530,648 and affect negatively to the
reputation of the company with insurance office as well as other government authorities.
(6) Tax penalty
Tax penalty in Year 2017 came from declaring and paying late personal income tax. In
details, the company declared PIT of Year 2016, Quarter 1, Quarter 2 of Year 2017 late
over 100 days, it created the penalty amount as bellow:
Items
(1) Penalty for late payment

(2) Administrative violations penalty for

Amount
VND212,105
VND3,920,000

late payment
Total penalty need to pay

VND 4,132,105

Table 4 – Tax penalty at July 31th, 2017 of US Buildings
Paying late make loss VND4,132,105 for the company. This situation affect negatively
to company profile in tax office and influent to the reputation of company under the
suppliers and customers. In real, some domestic projects need the information of
accounting report, if the investors see any penalty in accounting report, the opportunity
for co-operation with them will be narrowed.

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From the above symptoms, I realized that the accounting department of the company
has the problem in managing the accounting information system. Obviously, if the
company were good in managing accounting information, the financial information of

the company must be accurately. However, the above evidences showed us that the
current financial information is inaccurate and useless for manager in making decision.
Therefore, in next parts, I will use theories and research to find out actual problems
related to accounting system to improve above negatives.

PART II – PROBLEM IDENTIFICATION
From the symptoms which mentioned in previous items, I realized that these symptoms
are just the tip of the iceberg seen from the surface. In order to having an overview of
accounting department’s problem, I conduct the in-depth interviews with 5 members
belong to US Buildings include Director, Chief accountant, one sale, one engineer, one
purchaser of the company. These interviews help me look up the other symptoms as well
as verify the possible problems in accounting department of the company.
1. Theoretical basis
There are the reviews of literatures related to accounting information system which I
was used in the survey:
An accounting information system (AIS) is a system of collecting, storing and
processing financial and accounting data that are used by decision makers. An
accounting information system is generally a computer-based method for tracking
accounting activity in conjunction with information technology resources. The resulting
financial reports can be used internally by management or externally by other interested
parties including investors, creditors and tax authorities. Accounting information
systems are designed to support all accounting functions and activities including
auditing, financial accounting and reporting, managerial/ management accounting and
tax. The most widely adopted accounting information systems are auditing and financial
reporting modules [1]

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An accounting information system is one that accumulates, stores, and processes
financial and accounting information. The system generates reports that are used to
make decisions regarding how an organization is to be run. These reports are also used
by outsiders to evaluate lending and investment opportunities with the firm. The key
components of the system are:
 The policies and procedures governing how information is collected.
 The internal controls used to ensure that information is recorded correctly.
 The training employed to ensure that users operate the system correctly.
 The software and integrated database used to store and process information.
 The hardware on which the software and database is stored. [2]
The accounting information system is a collection of resources, such as people and
equipment, which are designed to alter financial data and other data into information to
be communicated to various decision makers [3]
The accounting information system is a set of interrelated activities, documents, and
technologies designed to collect data, process, and report information to a diverse group
of internal and external decision makers within the organization [4]
Accounting information system is a system to collect, record, store, and process the
data to generate information for decision makers [5]
There are six components of Accounting Information Systems [6] namely: (1) The
people who use the system, (2) The procedures and instructions use to collect, process,
and store data, (3) The data about the organization and its business activities, (4) The
software used to process the data, (5) The information technology infrastructure,
including the computers, peripheral devices, and network communication devices used
in the AIS; and (6) The internal controls and security measures that safeguard AIS data.
O'brien & Marakas [7] states that the components are interrelated, all items working

together (interrelated) to achieve a common goal by accepting inputs and produce
outputs through a transformation process that organized.

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Dimension implementation of accounting information systems in this research are:
transaction processing system [8] and the integration of the component system [9].
From the theories of accounting information system, I summarize the process of
accounting system in the following table:

Information
Technology

Procedures

Output

Input
People

Accounting
data

Software

Accounting
information
Internal
control

Graphic 2: The process of accounting information system.
The process of accounting information system mentioned five important factors: people,
procedure, technology, software and internal control. In which:
People: People include the peoples who are creating, processing and using accounting
system and the information from accounting department;
Procedure: The procedure is instructions of the company related to accounting works
include collecting document, processing accounting data and reporting for manager.
Accounting procedures dictate how companies record and report their financial
information and provide companies with basic understanding of how to record
information for internal and external business use.

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Information Technology: Information Technology (IT) deals with the application of
computers and telecommunications equipment to store, retrieve, transmit and
manipulate data. This may also be described as anything that renders data, information,

or perceived knowledge in any visual format through any multimedia distribution
mechanism.
Software: Accounting software describes a type of application software that records
and processes accounting transactions within functional modules such as accounts
payable, accounts receivable, general ledger, payroll, and trial balance. It functions as
an accounting information system. Accounting software can help to increase the
accuracy of your records by reducing or eliminating human errors in calculation.
Internal control: Internal controls in accounting are procedures that are put in place
within an organization to ensure business is carried out in an orderly, effective and
accurate manner. Internal controls play a critical role not only in public companies but
also in private companies, because internal controls establish safeguards to an
organization’s assets and minimize the opportunities of committing fraud and allowing
errors to go undetected in an organization’s daily operations.
2. Content of in-depth interviews
Based on the theories of accounting information system which was showed in previous
items, I conducted the in-depth interviews about accounting system in Universal
Vietnam Steel Building Co., Ltd, the contents of survey was presented as below:
2.1. List of interviewees

No. Interviewee name

Age

Position

1

Pham Hoang Thi

35

Director

2

Tran Thi Nhu Ngoc

37

Chief accountant

3

Tran Nghe Phong

29

Sales

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Nguyen Xuan Khanh

31

Engineer

5

Huynh Nhat Truong

26

Purchaser

14

Table 5 – List of members joined in-depth interview
2.2 Interview guide
Interview guide was built based on theorical basis about accounting system, which
showed in Article 1, Part II, includes 10 questions related to 4 basic factors of
accounting department : People, Procedure, Information Technology, Software, Internal
Control. The major content of interview questions are showed as follow (See all
interview guides in Appendix 1):
People

- Do you feel satisfy or unsatisfied with the competence of
company’s accountant? Why? Can you list the strengths and
weakness of current accountant?
- Do you think the methods of management in accounting
department of the manager are suitable or not with the company?
Can you list the strengths and weakness of current accounting
manager?

Procedure

- What are your recommend of current accounting procedures in
your company?

Software

- Does your company use software support for accounting process?
If not, what tools your company used for accounting process?

Information

- How is your company using the infrastructure of information

Technology

technology in accounting works?

Internal

- Does your company have the internal controls in accounting

control

department? Can you list some typical examples of internal
controls in your company?

Verify problem - Can you give me some unsatisfactions which you face when you
questions

work in (/with) accounting department?

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- Which of potential problem in accounting department do you
think affecting greatly to the business?
- Which causes of above potential problem do you think?
- Can you give some solutions in order to improve the current
accounting system?

2.3 Result of interviews
The content of interviews was transferred into transcripts (See in Appendix 2) to
simplize the synthesis of interviews. From that, I summarized the significant points
which affect to current operation of accounting department (See in Appendix 3).
From the information which collected from interviews, I found out some problems
which exist in the accountant system of the company:

(1) Poor in managing accounting information
Most of the important accounting information currently is inexactly, there are negative
cash fund, wrong liabilities and double payment for supplier. Accounting information
take a significant role in making decision of Board of Director, in the current case, the
Director can’t use accounting data for making decision, it affect directly to the effective

of business. Accounting information systems (AIS) play a crucial role in the strategic
position of an organization [10]. AIS is a system of collection, storage, and processing
of financial and accounting data to be used by decision makers [11]. Management
information systems (MIS) are responsible for collecting and disseminating information.
MIS and its most important component, i.e. AIS, are systematic methods for timely
collection, categorization, and analysis of information for managers and decision makers
[12]. Effective use of reliable information systems can help organizations reach an
optimal state, as it allows for understanding competitors and provides other competitive
advantages [13].
(2) Poor in accounting internal control
At the present, the accounting department is poor in accounting internal control. It is
evident that the company can’t control the balance of cash on hand, advance amount,

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account receivables as well as account payables. In additional, the company did not
reconcile the balance of cash in bank between internal record and bank statement.
Therefore, the current information in financial statements are incorrect and does not
reflect accurately the financial situation of the company, lead to the manager can’t make
decision based on current financial information.
When it comes to controlling activities, Board of Director did not have any checking in
period, so that, they can’t catch the financial situation of the company in time to make
decision. This lead to loose in management and lost control of financial information, if

this situation occurs in long time, the company would be difficult to control financial
information as well as would spend much time and resources to recover the accounting
information system.
About storage documents, the company save documents based on the habit, did not have
any marking and linking between documents and accounting records. The storage
document situation is messy and cleanliness. In other words, the company always saves
this type of document into other file which saves the other ones. Therefore, it is difficult
to look for documents and also easy to loss vouchers and documents.

3. Verify the potential problem
Through the result of in-depth interview and supported theories, we can see the current
situation of accounting information system depending on factors: the people, the
procedures, the software and the internal controls and security. From that, we found out
two possible problem exists in the company: (1) Poor in managing accounting
information and (2) Poor in accounting internal control. Compare with the current
situation of the company, two mentioned problem effect equally to the current situation
in accounting department of the company. Poor in managing accounting information
make the accounting data inaccurate and inadequacy affect negatively to decision
making, budgeting, planning and supplier communication. In which Poor in accounting
internal control also affect directly to the effective of accounting system, the securities
and the accuracy of accounting information. However, in the scope of this thesis, I
choose problem (1) Poor in managing accounting information as a potential problem

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because it affect directly to accounting department and close with current symptoms of
accounting department of US Buildings. Therefore, in the scope of this thesis I will focus
on chosen potential problem to find out the possible causes and find out the reasonable
solutions to innovate and improve the accounting information system.

PART III - CAUSES VALIDATION

As mentioned in previous part, the potential problem of accounting department is Poor
in managing accounting information. Therefore, this part focus on finding out the
possible causes which contributed this potential problem.
Aggregating from interviews in Part II, I summarize and give out the possible causes
related to problem as following:
(1) Lack of clearly accounting procedure
The company does not have any procedures and instructions in accounting department,
therefore, all accounting works were done basing on the experiences of accountant.
Actually, the company did not have any judgment about the competence of accountant,
so that it is difficult to assess the reasonableness of accounting works done.

(2) Overlapping in accountant position
In accounting department, the outstanding of employees is shown as following graphic:

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Chief accountant
General Accountant

Checking documents
directly from general
accountant before giving
for Director; Directly
manage General
Accountant

Consult Director in
management and investment
decision

Checking documents directly from suppliers,
customers, staffs

Conduct all the works related to accounting and
give the neccessary data when required
The detail works include:
- Record transactions
- Cashier work
- Tax declaration
- internal accounting report

Graphic 3: The structure of accounting department and responsibilities of each
position.
Currently, the accounting department has two persons. There are chief accountant and

general accountant. Chief accountant is also Vice Director of the company, who advices
to Director in making decision. When it comes to general accountant, the company has
merely one general accountant whom does all works related to accounting, from
receiving documents from other department to recording, reporting and storage
documents. Because general accountant does too much works, therefore, result in
overlapping and handling works ineffectively.

(3) Poor in the leadership of BOD
The leadership of Board of Director affect significant to the performance of accounting
department. McShane and Glino [14] define leadership as the process of influencing,
motivating and enabling others to contribute toward the effectiveness and success of
organizations of which they are members. Leaders apply various forms of influence to
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ensure that members have the motivation and clarity of roles to achieve certain goals.
Leaders also arrange the work environment, such as allocating resources and altering
patterns of communication, so employees can achieve organizational goals more easily.
Leadership is the ability to inspire confidence and to motivate individuals in achieving
organizational goals. Leaders influence people to do things
through the use of power and authority. An effective leader makes a positive impact on
the organization in terms of productivity and morale [15]. Yukl [16] defines leadership
is the process of influencing others to understand and agree about what needs to be done
and how to do it, and the process of facilitating individual and collective efforts to

accomplish shared objectives. The definition includes efforts not only to influence and
facilitate the current work of the group or organization, but also to ensure that it is
prepared to meet future challenges. Leader effectiveness is occasionally measured in
terms of the leader’s contribution to the quality of group processes, as perceived by
followers or by outside observers. According to House et al. [17] leadership is the ability
of an individual to influence, motivate, and make other people are able to contribute for
the sake of effectiveness and success of the organization. Schermerhorn et al. [18] define
leadership as the process of influencing others to understand and agree on what needs
to be done and how to do it, and is the process of facilitating individual and collective
efforts to achieve common goals.
According Hellriegel and Slocum [19], leadership is the process of developing ideas and
vision, execute the ideas and vision along with members of other organizations and to
make difficult decisions about human and other resources. There are four types of
dimensions into leadership styles are as follows: (1) the directive leader lets subordinates
know what is expected of them, schedules work to be done, and gives specific guidance
on how to accomplish tasks; (2) the supportive leader is friendly and shows concern for
the needs of subordinates; (3) the participative leader consults with subordinates and
uses their suggestions before making a decision; and (4) the achievement oriented leader
sets challenging goals and expects subordinates to perform at their highest level [20].
(4) Poor in accountant’s competences

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David McClelland [21] as a psychologist in the field of competence, defined
competency is a personal characteristics, motive, behavior or knowledge which proven
to boost excellent job. While Spencer and Spencer [22] defined competency as A
competency is an underlying characteristic of an individual that is causally related to
criterion-referenced effective and/ or superior performance in a job or situation.
Underlying characteristic means the competency is a fairly deep and enduring part of
the person's personality and can Predict behavior in a wide variety of situational job
task. Causally related means that a competency causes or Predicts behavior and
performance. Criterion- referenced means that the competency actually predicts who
does something well or poorly, as measured on specific criterion or standard.
Das et.al [23] stated that Competency is one of the most essential concepts for business
to Achieve Success in any of the day to day job responsibilities performance from task
management to recruiting, from training and development.
In a definition discussed above we conclude that there are two types of competence: (a)
individual competencies (knowledge, skills and abilities of the individual); and the
organization competence (the collective character at the organizational level). Ennis [24]
defined the competency as the capability of applying or using knowledge, skills,
abilities, behaviors, and personal characteristics to successfully perform critical work
tasks, specific functions, or, operate in a given role or position. From the definition
above it can be concluded that competence is a character or motive both individual and
organizations to achieve superior job performance. Therefore, the competence of
accountants is competencies possessed by accountants in this case relates to the
processing of financial reporting as well as accounting information.
 VERIFY POTENTIAL CAUSE
Based on above possible causes, I designed a small survey to define the potential causes.
Following are the outstanding of survey which I conducted.
-

Objectives of survey: Finding out the potential causes which resulted in the problem
“poor in managing accounting information” of the company.

-

Method of survey:

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Method of data collection: I used questionnaire to survey participants.
Method of data analysis: I created the question under the interval scale, therefore, to
simplify the analysis, I collected the survey results of 12 participants by manual method
in an Excel file. Then, we calculated the mean, standard deviation and Coefficient of
Variation (CV) of each factors based on the formulas which showed in Appendix 4
The mean and the standard deviation are the two important indexes in statistics and
analysis. The mean shows the average value of a set of numbers, in which the standard
deviation and Coefficient of Variation are a measure of how spread out numbers are.
- Scope of survey: all staffs of company who are working in Vietnam office, include 12
participants.
- Survey limitations:
As in every study, this dissertation has the following limitations:
•

The size of the sample was small;

•

Limited by skilled interviewers, as well as errors;

•

Limited by knowledge of interviewees about research topic;

•

Some participants completed the questionnaire without carefully reading, affect

to the result of research.
- Content of survey: I designed the questionnaire whose contents are showed as bellow:
Can you evaluate the influence level of possible causes to the problem in accounting
department? (From 1 to 5 correspond to the increase in influence level)
Possible causes\ influence level

1

2

3

4

5

A. Lack of clearly accounting procedure
B. Overlapping task in accounting position

C. Poor in the leadership of BOD
D. Poor in accountant’s competences

- Result of survey
Based on the survey result, we collected the answer of attendees in a manual way, we
have the answer of 12 attendees as in Appendix 5.

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From the table, I calculated the mean and standard deviation of each possible cause A,
B, C and D. The table showed us that the highest mean values 4.25 belonging to the
cause A. Lack of clearly accounting procedure, this number presented that the
participants have the high agreement in the cause A. In which, the peak of standard
deviation is 0.74 belonging to the cause B. Overlapping task in accountant position,
which showed that the wide different between the answers of each participant.
From the above figure, The cause - Lack of clearly accounting procedure has the highest
mean and has less fluctuation in standard deviation, it means that most of company
members think that the major causes results in current potential problem in accounting
department of the company come from Lack of clearly accounting procedure. Therefore,
there is no doubt that among 4 possible causes, the potential cause of accounting
department is Lack of clearly accounting procedure. The shortage of clearly
accounting procedure accounted for a wide range of influence proportion into current
circumstance in organization.

Through the process of finding out the potential causes of potential problem, I
summarized the overall of symptom, problems as well as causes in the final cause –
effect map as following:

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