In this paper, we focus solely on material weaknesses for two reasons. First, it is the
most severe type of internal control deficiency, and thus offers the greatest power for our
determinants tests. Second, the disclosure of material weaknesses is effectively mandatory,
while the disclosure of ‘‘significant deficiencies’’ is unambiguously voluntary.3 Focusing on
these more mandatory disclosures helps avoid self-selection issues associated with
voluntary disclosures.
In the last two decades, ERP system has been one of the best technological solutions for the effective and efficient information management (Françoise et al., 2009). Noudoostbeni et al. (2010) point out ERP is one of the main businesses that help organizations to manage their resources in the effective way. Under the circumstances, ERP system has become the necessary tool in application of information technology (IT). The main function of ERP system is to combine all operational information needed for every process from different departments into one database and information is imported to the accounting department (Kale, 2000). It shows the importance of ERP system in accounting field. However, ERP system also brings great impact on the role of accountants. It has replaced or consolidated many works of accountants. This may change the nature of their job. They have to face the new environment with a positive attitude.
The purpose of this research is to explore the impact of ERP system on accountants. Desormeaux (1998) agrees that ERP implementation raises the role and position of the accounting department and accountants because accountants are considered information providers and analysts for other departments after ERP implementation. In contrast, vendors of ERP system in Taiwan think accountants are financial guardians. Therefore, it is important for us to explore how ERP system affects the role of accountants. Through this research, we want to understand the impact of ERP system on accountants more to help them adapt to the new role.
The research subjects are the Shanghai Financial Service Center and accounting departments of R company in region businesses of mainland and Taiwan. R company is a representative transnational chemical company in the USA and its sales volume and market share are large and high. This research uses case study approach to find out the impact of ERP system on accountants in R company and discusses the role and job qualifications of accountants after ERP implementation.