CHAPTER ONE INTRODUCTION 1.1     BACKGROUND OF THE STUDY

Organizations consciously keep records of its activities as a result of developmental stride. Accounting records in particle are vital and evitable in organizations such as oil and gas industry even if it means just sales day book recording in a book. Before the advent of this modern day information technology, records have been kept mutually, which means record has to be taken by someone in cause of any transaction in a source document, book of origin entry, ledges to matron just a few.

Since information technology involves the use of computer system and other electronic media, it helps to enhance the value of information by reducing the geographical distance, time delay, human errors and other environmental problems in processing and referring data to those that need them for decision making. By this improvement business operations are simplified.

Proper information technology management is essential to convert information technology expenditure to information technology assets. Appropriate use of information technology’s gadgets improves organization’s performance due to these organizational innovations.

Daven and Kaullinan (2000) extended this Information Technology conversion process sequence to emphasize on the importance of considering the impact of information technology planning and selection of activities to realize technology value.

Information Technology of the application of computer and telecommunication equipment to store, retrieve, transmit and manipulate data used as a synonym for computer and computer networks, but it also encompasses other information distribution Technologies such as television and telephone.

Several industries are associated with Information Technology including computer hardware, software, electronic, semi conductor, internet, telecom equipment, e-commerce and computer services.

Generally, the development of computer system necessitated the study of the nature of Information Technology and flow in any organization. Computerization of the manual system and the computerized system will point out the mode of computerization especially as it concerns the development of the accounting records in Oil and Gas industry. Oil and Gas industry accounting is considering the cooperation of task returns and proper understanding of the accounting practice and system which have produced.

The aim is to give basic information and guidance on a number of aspects of oil industry accounting. Tax specialist may encounter matters which may include oil exploration and Production Company may in principle involve companies engaged in office commercial and industrial activities. It was in line with the forgoing that this project was undertaken to analyze the information technology as it regards to the importance that computerization and technology has on the development of accounting system in out and gas as is applicable to Nigeria Lignified Natural Gas (NLNG).

Nigeria LNG limited is jointly owned by Nigeria National petroleum cooperation (49%) shell (25-6%, total E&P (15%), and Eni (10-4%). It was incorporated as a limited liability company on may 17th 1989 to harness Nigeria vast natural gas resources and produce lignified natural gas (LNG) and natural gas liquids (NGLS) for export the company has wholly owned subsidiaries Fuchs bonny gas transport (BGT) limited and NLNG ship manning limited (NSML).

1.2     STATEMENT OF PROBLEM

Information technology is seen as the backbone of the financial system in the economy and could also be referred to as the lye-line of the economy. The primary role and performance of accountants as knowledge workers and key players in Nigeria economy is to provide useful objectives and timely information by properly processing financial data into information which serves as a basic and guide for decision making in Nigeria oil and gas organization. Therefore, the success of an economy is solely based on use financial system which out fishily is reference still being made to the part, to do with the performance in the economy. A broad opening in technology has been experienced I the world for oil and gas companies especially NLNG and they are currently taking advantage of these innovations to provide better improved and more efficient service that may enhance productivity. (Akinuli, 1999: Ovia 2005) using a computerized accounting system comes with its own set of problems, such as the need to protect against data through power failure or viruses and the danger of hackers stealing data. Computer fraud is also a concern and the need to instigate a system of control for who has access to the information, particularly customer information. If there is a security breach and data stolen, management can be held personally liable for the loss of data. Also the need to make sure that data has been correctly entered into the system, as a mistake in data entry can throw off a whole set of data (Lisa Magloff, 2016) this cloudy atmosphere therefore provides, a fertile ground for the researcher to examine the role of information technology in the accounting system performance, especially it’s impacts on NCNA, which is raised as a case study for this research so as to realize it’s significant impact and also short and long term goals in their operation in order to guarantee their profitability and growth.

1.3     OBJECTIVE OF STUDY

The objectives of the study are to examine information technology in accounting system performance (a case study of NCNA) with the following specification to:

1.       Determine the relationship between information technology and accounting system reliability.

2.       Determine the relationship between Information Technology and accounting system comparability.

3.       Determine the relationship between Information Technology and accounting system relevance.

4.       Determine the relationship between Information Technology and accounting system timeliness.

5.       Determine the relationship between Information Technology and accounting system verifiability.

1.4     RESEARCH QUESTIONS

In view of the above objectives of study, the following specific research questions where formulated:

1.       Is there any significant relationship between Information Technology and accounting system reliance?

2.       Is there any significant relationship between Information Technology and accounting system comparability?

3.       Is there any significant relationship between Information Technology and accounting system relevance?

4.       Is there any significant relationship between Information Technology and accounting system Timeliness?

5.       Is there any significant relationship between Information Technology and accounting system verifiability?

RESEARCH HYPOTHESIS: The following hypothesis where formulated and tested as followed:

Ho:    There is no significant relationship between        Information Technology and accounting system in Oil         and Gas industries.

HA:   There is a significant relationship between           Information Technology and accounting system in Oil        and Gas industries.

1.5     SIGNIFICANCE OF THE STUDY

Information Technology has a major driving force to the development of Technology which has impacted positively in virtually every sector of the Nigerian economy. In Oil and Gas companies, the use of computers in their day-to-day operations in order to provide quality services to their customers via the use of modern day technology. This study will be beneficial to people in the society who have quest for more knowledge. It will serve a yardstick for further study. Information Technology will also improve staff knowledge about the use of computer and other gadgets through which staff of the company can access network.

1.6     SCOPE OF THE STUDY

This work is centered on Information Technology and accounting system in Oil and Gas industry with Nigeria Liquefied Natural Gas (NLNG) as a case study.

  1.6.1  LIMITATION OF THE STUDY

The researcher also conducted the need for Information Technology and the factors that have propelled the use of Information Technology in the finance division of the said company. The researcher has also focused on the risk associated with the use of Information Technology evaluation in data processing.

The study has encountered several problems/limitations ranging from:

       Time availability

       Attitude of respondents in filling the questionnaire.

       Availability of money

1.7     DEFINITION OF TERMS

For the purpose of simplicity, and proper understanding, the following terms are explained as they apply to this study.

1.       Accounting Information: Is a system of collecting, storing and processing of financial and accounting data that are used by decision makers.

2.       Accounting Information System: Is generally a computer based method for tracking accounting activities in conjunction with Information Technology resources. This is also the qualitative and quantitative written information contained in a complete or partial financial statement. It includes balance sheet, profit and macroeconomic indicators.

3.       Financial Statement: Statement of accounting policies, the statement of financial position as at the last day of the accounting, the income statement as at that date. Note on the accounts, the auditor’s report, a statement of Cashion, a value added statement for the year. A five year summary and in case of a holiday company, the group financial statement as stated in CAMA 1990. In case of public sector accounting as prescribed by the intentional public sector accounting standard board (IPSASB, 2013).

4.       Information: It is what converged or represented by a particular arrangement or sequence of things. It is a vital ingredient that every organization needs as a basic and guide for decision making and action. Managers cannot effectively perform their function of planning organizing controlling and leading without objective and timely information that serve as source of knowledge for decision making. It can further be defined by Webster in collegiate (mush edition) as a signal or character in communication system or computer representation data.

5.       Technology: This can be referred to as the knowledge of techniques, process and the like, or it can be embedded in machines, computers, devices and factories which can be operated by individual without detailed knowledge of the workings of such things. This is also the industrial and applied science to industries use; it is referred to as the collection of fools, including machinery, modifications, arrangements and procedures used by emerging technologies. Information technology can therefore be said to be a computer telecommunication, as well as video techniques for the purpose of acquiring, processing, storing and disseminating vocal pictured, textual and numerical information.

6.       Accounting: This is the recording, classification, analysis, summary and interpretation of financial transaction to show how they affect the operational  performance in advance. It can further be viewed as the measurements, processing and communication of financial information.

7.       Computer: This refers to any electronic device that can accept store, process data automatically, result of these processes inform of information.

8.       Efficiency: Efficiency is measured in term of the ability of the computer to store very large quality of data and its ability to produce processed information when needed.

9.       Spread sheet: They are software package widely used by accountant’s powerful computational facilities and made range of application to which they can be applied (Anderson 1990:66).

10.     Management: This refers to individual or group of individuals responsible for studying, analysis, formulating decision and initiating appropriate action for the benefit of an organization (Ducker, 1995,7).

11.     Time factor: The limited time allowed for the research work made it difficult to be as through as necessary.