Role of Accounting Information in Decision Making (Case of AIB

Hossana Branch)

A Research Paper Submitted to the Department of Accounting

and Finance, for the Requirement of Partial Fulfillment on
Bachelor of Art Degree in Accounting and Finance

BY: - MITIKU YITAYIH

Advisor: Abdulej A. (MSc)

June, 2016

Hosanna, Ethiopia
Acknowledgement

First and for, I would like to prize the almighty God his unspeakable supports, saint virgin marry
for her special motherly contribution, angles and saints that protect me through all of my voyages
without interruption.

Secondly, my heartfelt appreciation and special thanks goes to my families for their moral
(psychological), financial and materials supports which enable me to reach here.

Thirdly my gratitude goes to my sincere and genuine advisor Abdulenja (MSA) for his
constructive and valuable comments and guidance in the preparation of this paper.

Lastly, I would to express my appreciation and greatest thank for Awash International Bank
employees and manager for their heartedly wiliness and support to give valuable information for
my study.
Abstract

Accounting information is the most important requirement for decision makers to achieve the
banks objectives. Availability of adequate accounting information plays a great role in decision
making process such as to decide the lending and borrowing policy of the bank.

Every bank workers should know the role of accounting information’s in decision making
process. The main objective of the study is to assess the role of accounting information in
decision making process of Awash International Bank in Hossana Town Branch. The specific
objectives are also the assess how accounting information is reported to decision makers to
evaluate how decision makers use accounting information in decision making process and to
identify the factors that hinder the role of accounting information not to play its role in decision
making process.

Problems commonly occur when accounting information is not used as does not play its
important role in decision making well. To evaluate and examine this problem the researcher use
the census of complete numeration to collect data from workers of the bank. The collected data
were both primary and secondary sources. The research mainly used the mainly used the
primary source include questionnaires and unstructured interviewees. The secondary data
sources of data was collected from different written material for example internet. The research
used mixed Research design that is both qualitative and quantitative.

The collected data was analyzed and interpreted with explanation finally summary of major
findings taken from the study financial and managerial accounting information are used for
banks decision making and the majority of the respondents agreed on its difficult to get easily
available accounting information to decision making. The researcher conclude that the financial
statement of the bank were prepared at the end of the fiscal year however the accounting
information is not properly reported to decision makers also to different problems like, error in
recorded keeping of business transaction and inaccurate and irrelevant input data during
customer from service period.

The researcher also recommended since, the accounting information plays a vital role in
decision making process of one organization the Awash International Bank accounting
information should be relevant for decision makers and the bank should create awareness and
improve its functional workers in the use of accounting information in decision making process.
 Table of Contents
Content Page
CHAPTER ONE
1. INTRODUCTION
1.1. Back ground of the study..............................................................................................1
1.2. Statement of the problem .............................................................................................1
1.3. Research questions ..................................................................................................................3
1.4. Objectives of the study...............................................................................................3
1.4.1. General objective ..................................................................................................3
1.4.2. Specific objectives ................................................................................................3
1.5. Scope of the study
1.6. limitation of the study
1.7. Significant of the study...............................................................................................4
1.8. Organization of the paper .............................................................................................4

CHAPTER TWO
2. Literature Review .............................................................................................4
2.1 Theoretical Literature Review
2.1.1 Accounting Information and Decision Making
2.1.2 The Accounting Information and Function
2.2 The Value of Accounting Information
2.3 Types of Accounting Information
2.3.1 Managerial Accounting Information
2.3.2 Financial Accounting Information
2.4 Decision Maters
2.5 Decision Making Process
2.6 The Role of Accounting Information in Decision Making Process
2.7 Financial Statement and its Role in Decision Making
2.7.1 Income Statement
2.7.2 Balance Sheet
2.8 The Accounting Information and Accounting Cycle
 2.9 The Empirical Literature Review
CHAPTER THREE
3. Research Methodology
3.1 Introduction
3.2 Research Design
3.3 The Study Population
3.4 Sampling Method and Sample Size
3.5 Data Collection Instruments and Procedures
3.5.1 Primary Data Collection
3.5.2 Secondary Data Collection
3.6 Data Processing and Analyzing Method.
CHAPTER FOUR
4. Presentation, Analysis and Interpretation of Data ........................................................................
4.1 Primary Data Analysis ................................................................................................................
4.1.1 Profile of Respondent ..............................................................................................................
4.2 Analysis of the Role of Accounting Information Decision Making Process...............................
4.2.1 Role of Accounting Information in Decision Making Processes..............................................
4.2.1 Accounting Information is Properly Reported to the Decision Maker ....................................
4.2.3 Efficient Use of Accounting Information by Manager’s .........................................................
4.2.4 Problems related to with use of accounting information in decision making process. ............
CHAPTER FIVE
5. Finding, Conclusion and recommendation ...................................................................................
5.2 Conclusion ..................................................................................................................................
5.3 Recommendations .......................................................................................................................
Reference
Appendix
 CHAPTER ONE

1. INTRODUCTION

1.1. Back ground of the study

Accounting information is any financial or other measurable control or

performances oriented information about an organization of relevance’s to stock
holders for their use in monitoring and in decision relating to that bank
(Taylor,1999).Throughout the world information about the bank is accumulated by
various government agencies and private organization. Bank information is
mentioned by many decision makers. Including manger’s financial analysis, stock
holders and customer groups. Accounting information is used for mangers,
investors, creditors, governmental employees and others use accounting
information for economic resources to help them in decision making process.
Today proper accounting information is very important for the success of any
organization. For example managers, investors, creditors and nonprofit
organization use accounting information in decision making. Accounting
information provides the base for decision making on the business and economic
questions that the manager conducting daily operations future operations and
developing the overall business strategies. Awash International bank is one of
process the organizations that uses accounting information for decision making and
allocation of it transaction events to maximize its earning and profitability in
today’s competitive environment The existence of an important and the best
accounting information has essential role in decision making process of any bank
or organization (Ingram Robert, 2001). Therefore, assessment of the role of
accounting information indecision making in Awash International Bank is the main
objective of this paper.
1.2. Statement of the problem
Accounting information is the most important requirement for decision makers.
Such as potential investors, lenders, managers, nonprofit organizations and various
government agencies also use accounting information through the people manages
them (Anderson,1990). Adequate accounting information plays a general role in
decision making process of the organization. Such as to decide the lending and
borrowing policy of the bank. Accounting information and decision making
process would have expressed as two faces of coins, since many organizations and
institutions need accounting information to increase their economy and to earn
profit. The problems commonly occur when accounting information is not used
and does not play its role well are the management has difficult to decide the
lending and borrowing policy of the bank as well as forecasting the bank out
comes in the future. The resulting statistical reports can be used internally by
management or externally by other investors parties including investors, creditors
and tax authorities (Mengistu Bogale,2008).

According to Yireg Kassahun studded at Debre Markos University in 2014, he

identified the problems commonly occur when accounting information is not used
by bank workers there are poor performance in decision making process loss of
profit but,

See the problems that affect the decision making process if the workers do not use
the following general accounting principles (GAAP).

- People the system users coordination.

- Procedure and instructions methods for retrieving and processing data.
- Data- information pertinent to the organizations business practices.
- Soft water- computer programs used to process data.
 - Information technology infrastructure- hardware used to operate the system.
- Internal controls- security measures to protect sensitive data.

Decision making process the bank used to decide about the role of accounting
information that plays its important role for the bank concerned to managerial or
financial decision making processes, how accounting information is properly
reported to decision makers and how properly reported accounting information is
important for decision makers and used for internal and external users (Mengistu
Bogale, 2008,).

In addition to this the researcher would concerned how decision makers use
accounting information in decision making efficiently. Efficient accounting
information would be used for them to now the performance of the bank and its
current and future situations to identify.

The last issue is also the factors that hinder the accounting information not to play
its role in management decision making process of the bank so the researcher tries
to identify such problems concerning to the issue (Anderson, 1990).

Research questions
 How accounting information is properly reported to decision makers?
 How accounting information plays its important role in decision making
process?
 How decision makers use accounting information in decision making
process?
1.3. Objectives of the study
1.3.1General objective

The general objective of the study is to assess the role of accounting information in
the decision making process in the case of Awash International Bank in Hosanna
Town branch.

1.3.2. Specific objectives

This study was tried to achieve the following specific objectives concerning to the
role of accounting information in decision making.

 To assess how accounting information is properly reported to decision

makers. ‘
 To identify the decision making process that accounting information’s plays
its important role in the bank.
 To evaluate how decision makers use accounting information in decision
making process efficiently
1.4. Scope of the study

The study is concerned with the assessment of role of accounting information in

decision making. This study make investigation only on Awash International Bank
and its related with accounting information in decision making process.

1.5. Significant of the study

The study was identified the problems concerning to the role of accounting
information in decision making in the organization and emphasis the following
points.
 It will help to Awash International Bank decision makers and organizations to
overcome the problem arising from in efficient processing of accounting
information. It will access the students for knowledge of accounting
information in decision making. It will use to perform better study on filed and
come up with relevant information for future researchers

1.6. Limitation of the study

The following were constraints that limited researcher work:
 Lack of reference material and source on related topics .
 Lack of experience.
 Unwillingness of interviewees.

1.7 Organization of the paper

The study has organized in five chapters. The first chapter has concerned with the
background of the study, statement of the problems and objective of the study,
scope of the study, significant of the study and limitation of the study. The second
chapter deals with review of literature. The third chapter deals with research
methodology,. The fourth chapter deals with data analysis and interpretation, The
fifth chapter deals with major finding, conclusion and recommendation.
 CHAPTER TWO

2. Literature Review

2.1 Theoretical Literature Review

2.1.1 Accounting Information and Decision Making

Accounting is defined as the process of identify, measuring, recording and

communicating accounting information to permit informed judgments and
economic decisions. The primary purpose of accounting is to help persons to make
economic decision in our society. Resources must be allocated with in kinds of
entity (Fees Warns, 1993).

2.1.2 The Accounting Information and Function

The accounting information provides the basis for making decision about resources
allocation. Most business decisions cannot make without careful analysis of
relevant information. The accounting function is the financial information of the
bank. In this regard accounting plays important role in transaction processing,
capturing and recording events. Accounting information is essential to the decision
making process. If provides information for three functions: planning, controlling
and evaluating.

 Planning:- is the processes if formulating course of actions.

 Controlling:- is the process of seeing what plans are carried out.
 Evaluating:- is the examination of the whole decision making process to the
end of improving it and up (Fees Warns, 1993).
2.2 The Value of Accounting Information

The value of accounting to user’s are defer main by its reliability. The purpose
information is to lead the user’s to desired action for this to happen information
must pass certain attributes, relevance, accuracy.

Completeness are consistently present information has reliability and provides

value to user’s informant lacking reliability has no value. The negative implication
of reliable information is that it can load to poor decision (James, 1998).

2.3 Types of Accounting Information

Accounting has defined as earlier as an information system that measures,

processes and communicates information that is useful for decision making
distinctions commonly is made between the field of managements accounting
information and financial accounting information.

2.3.1 Managerial Accounting Information

Both historical and estimated data used by management in conducting daily

operation, planning future operations and developing the overall strategies.
Management accounting reports may stress different futures of the managerial
accounting provides internal decision who is engaged with information about
financing, investing and operating activities.

2.3.2 Financial Accounting Information

Financial accounting information that are prepared according to generally accepted

accounting principles (GAAP). This statements report the past results of operations
and financial conditions of the business they are prepared primary the benefit of a
persons or institutions that are outside or external to the organization. This
statements are also useful to management in directing the performance of the bank,
for example in planning future operations managers to benefit by evaluating the
results of past activities as reported in financial statements. (Needles, 2002).

2.4 Decision Makers

2.4.1 The Users of Accounting Information

Accounting and accounting information are used more widely that commonly
realized. The users of accounting information can be divided roughly into three
groups.

1. Those who managers business.

2. Those outside a business who have a direct financial interest in the business.
3. Those people organizations and agencies that have an indirect financial
interest in the bank.

The user of accounting informational are:-

I. Management:
It the groups of people who have overall responsibility for operating
business and for meeting the banks goals. Management may include the
owner, in large business management more often consists of people who are
littered. Business organization have many varied and often complex
objectives. Thus includes mantling an accepted level of earnings and
providing services. To accomplishes these and other tasks the companies
must be successful. Managers should decide what to do, how to do it and
whether the result mach their goal. Manager’s consistently make the right
decisions on the basis of timely and valid accounting information what was
the company’s net income during the period.
 II. Users with a Direct Financial Interest
Another major function of accounting is to measure and reports information
about how to perform. Most business periodically published asset of general
purpose of financial statement that report their success in meeting the
objective of profitability and liquidity, these statements show what has
happened in the past and are important indicators of what is going in the
future, many people outside the bank carefully study these financial reports
including,
1. Present or potential investors: thus who invest or may invest in a bank
are interested in the past success of the business and potential earning
before investing the investor reviewing the bank’s financial statement.
2. Present or potential creditors: most companies borrowed money for
long and short term operating needs creditors those who lend money
or rendering services before being paid it must analysis a company’s
financial position before they make alone to the company.
III. Users with Indirect Financial Interest
Society as a whole through government and public group in recent years has
become one of the biggest most important users of accounting information.
Users who need accounting information to make decision on public issues
including: tax authorizers, regulatory agencies, economic planners and other
groups. (Needless, 2002).

2.5 Decision Making Process

Decisions making is the act of decision between two or more alternative course of
action. In running day to day business activities accounting information and
techniques are used to financial decision making process (Ahuja, 2006).
2.6 The Role of Accounting Information in Decision Making Process

There are many use of accounting information in decision making. Managers scan
account records to spot problems are to focus on, lenders use accounting records to
determine risky loan founds to a company might be, tax authorities can decide it
bank has paid the right amount of tax by analyzing the firms accounting
information. There following activities are also made based on the accounting
information:

 Investing decision
 Management decision
 Lending decision
 Taxes (Anderson, 1990).

2.7 Financial Statement its Role in Decision Making

Financial statements: are the accounting reports that provides the accounting
information to the users. A bank often provide as accounting information to
managers’ and other decision makers in its financial statements. The statements are
useful because they describe the banks financial health and performance in
accoutered and highly informative format because they provide an overall view of
the entire banks through accounting information financial statement are good place
to study.

2.7.1 Income Statement

Income statement is useful because its shows whether the business earned a
profit/net income. A bank earns a net income its revenue excess its expenses. A
bank incurs loss if its expenses exceed its revenues. So managers consider all those
to make decision.

Revenues: are inflows of assets received in exchange of for services provided to

customers as part of the major or central operations of the business revenues also
may occur as a decrease in liabilities.

Expenses: are out flows or the using up of assets as a result of the major or central
operation of a business it may occur as increase in liabilities.

2.7.2 Balance Sheet

The purpose of the balance sheet is to provide information that helps uses
understand a bank’s financial status as a result, the balance sheet is often called the
statement of financial position. The balance sheet describes financial position by
listing the types and dollar amount of assets, liabilities and equity of the business.

Assets: are probable future economic benefits obtained to controlled by particular

entity as result of past transaction or event in other words they are economic
sources owned by business that are expected to benefit future bank operations.

Liabilities: are probable future sacristies of economic benefits arising from present
obligations of a particular entity to transfer assets or provide services to other
entities in the future as a result of past transactions or events.

Equity: is the residual interest in the asset of an entity that remains after dedicating
its liabilities in the business equality is called the ownership interest. (Smith, 1989)

2.8 The Accounting Information and Accounting Cycle

An accounting cycle; is the sequences of accounting procedures used to record,

classify and summarize of accounting information. It begins with the initial
recording of business transactions and concluded with the preparation of financial
statements summarizing the effects of these transactions up on the asset, liabilities
and owners equity of the business. If includes the following steps:

1. Recording business transaction and events in the journals.

2. Classifying data by posting from the journals to the lager.
3. Summarizing data from the lager in an unadjusted trial balance.
4. Adjusting, correcting and updating recorded data completion of the wrote
sheet.
5. Summarizing adjusted and corrected work sheet data in the form of financial
statement.
6. Closing the accounting records (nominal accounts) to summarize the
operation of accounting period.
7. Preparation of post closing trial balance.
8. Reversing certain adjusted unites to facilitate the recording process in the
subsequent accounting period.

Financial reporting intended to provide information that will be use full in making
decisions. This objectives influences accountant’s prepare accounting information
for financial purpose. It also decision oriented objectives were specified the way
data measured and reported would change grammatically (Harrison, 1989).

2.9 The Empirical Literature Review

Accounting to William J Burns (2003), the role of accounting information is

important for decision making process. The research considers the following three
statements for the role of accounting information for decision making.

 If a counting information is not prevent by decision makers to decision

under consideration a change affects the researcher’s decision.
  The concept of accounting information held by a decision maker on how
will the accountant and accounting system measures a significant attributes
and factors affecting a decision making process towards the accounting
information.
 The availability of the accounting information will an important betterment
for decision makers to accounting information.

Accounting information is essential to decision making system.Because it provides

qualitative information for three functions. Because it provides qualitative
information for three functions. Those are: planning, controlling and evaluating.
The research suggested that also the accounting information is important for
measuring, processing, and communicating information that is useful to make
business decisions(Needless Jr ,2001).
 CHAPTER THREE

3. Research Methodology

3.1 Introduction

In order to conduct this research, methodology is one of the important parts. This is
because without research methodology research cannot be done. In addition to this
research was contained important points such as population, sampling method,
research design and data collection procedures.

3.2 Research Design

The research was used both qualitative and quantitative techniques to analysis
collected data. Because to describe the collected data about the role of accounting
information for decision making this techniques are suitable. Why because mixed
type of research; provides strength that offset the weakness of both type of
research, can be easy to develop and test a new instrument (phenomena) and used
to adders questions at different level (Black, 2010).

3.3 The Study Population

In conducting this research, the research would use the managers, accountants and
the economists of the Awash International Bank workers who are voluntary to give
available and reliable information about the role of accounting information
decision making in the bank. Currently, the bank has 11 staff members of total
works. There are one managers, one auditor, one accountant, and eight customer
service render get population for study was employed available of Awash
International Bank Hosanna Branch.
3.4 Sampling Method and Sample Size

In conducting this research, the research would use non probability sampling
technique that is censes. Because in order to acquire the relevant data the
researcher would draw census or complete numeration which enables the
researcher to reduce sampling error and to get detail information from the target
population (Black, 2010) business statistics.

The sample size is 100% of the total population because in census the total
population and the sample size are equal.

3.5 Data Collection Instruments and Procedures

3.5.1 Primary Data Collection

The primary data would be collected from in depth interview from the employees
of the organization and the researcher dominantly used the primary sources.

3.5.2 Secondary Data Collection

The secondary data was collected from different written materials for example
internet.

3.6 Data Processing and Analyzing Method.

After collecting data the researcher would try to edit, code and classify the
collected data. The researcher would be used instruments of electronic calculator
of change the data in the form of percentage. The researcher would used
descriptive and interpreting of the collected data by using the researcher would be
presented the research finding reports, conclusion and recommendations.
 CHAPTER FOUR
4. Presentation, Analysis and Interpretation of Data
This chapter deals with the presentation, analysis and interpretation of data gathered through
questionnaire and interview which were filled and answered by employees and manager of
Awash International Bank.

The total number of population in which the study was conducted to 11 employees. All
questionnaires 11(100%) distributed to employees are effectively responded and returned.
Interview was also conducted with the manager of the bank.

Thus, based on the data obtained from the population data is presented, analyzed and interpreted
by using tables and percentages.

4.1 Primary Data Analysis

4.1.1 Profile of Respondent

Table 4.1 Sex, age and marital status of the respondents

No Item Respondents Number Percentage

Sex
Male 7 64%
1 Female 4 36%
Total 11 100%
Age
20-35 years 8 73%
2 35-50 years 3 27%
Above 50 years
Total 11 100%
Marital status
Single 4 36%
3 Married 7 64%
Divorced
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
The above table 4.1 item 1, shows that 7(64%) of population respondents are male employees
and the remaining 4(36%) of population respondents are females. This shows that the majority of
the employees were males.

As indicated the above table item number 2 regarding to the age of respondents about 8(73%) of
the total population are between 20-35 years old and the remaining 3(27%) are between the age
of 36-50 years. This shows that the majority of Awash International employees are adult. From
the above table item number 3 shows that the marital status of the respondents. It shows that
4(36%) of the respondents are single 7(64%) of the respondents are married.

From this the researcher can conclude that, the majority of the employees are married.

Table 4.2 General qualification and educational level of the respondents.

No Item Respondents Number Percentage

Accounting 5 46%
Management 3 27%
1 Qualification Economic 3 27%
Banking and finance
Total 11 100%
Educational 12st grade completed
background Certificate
2 Diploma
Degree 9 82%
Master 2 18%
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
The table 4.2 item number 4 shows the 5(46%) of the respondents were qualified with
accounting, 3(27%) of the respondents were qualified with management and remaining 3(27%)
of the respondents were qualified in economics.
The above table item number 5 shows that, the educational back ground of the respondent
employees. It show that 9(82%) of the respondents are degree and the remaining 2(18%) of the
respondents are masters.

From this the researcher concluded that the majority of the Awash International Bank employees
are degree holders.

4.2 Analysis of the Role of Accounting Information Decision Making Process

4.2.1 Role of Accounting Information in Decision Making Processes

Accounting information pays a great role in decision making process, when the decision involves
business and economic questions. Accounting information is essential to the decision making
process. It provides information for planning controlling and evaluation of performance.

Table 4.3 Role of accounting information in decision making process of Awash International
Bank

No Item Response Respondents Percentage

Number

1 Does accounting information play its Strongly agree 2 18%

important role in decision making
Agree 7 64%
process of Awash International Bank?
Disagree 2 18%

Strong Disagree

Total 11 100%

Respondents Source: Completed from questionnaires 2016.

As the above table shows that 2(18%) of respondents are strongly agree with the accounting
information role in decision making processes of the bank, 7(64%) of the respondents agree and
the remaining 2(18%) of the respondents are neutral. This shows that accounting information
plays a great role for bank. Since it provides relevant of information for decision making.
4.2.1 Accounting Information is properly reported to the Decision Maker
In order to make a good decision accounting information prepared by the accountant, should be
understandable and timely reported for decision makers and report in the form of financial
statement.

Table 4.4 Preparation of the financial statement

No Item Response Respondents Percentage

Number
Yes, weekly
2
Do you prepare your own Yes monthly 4 36%
financial statement for decision
making? How often? Yes, semiannually 3 28%

Yes, annually 4 36%

No

Total 11 100%

Respondents Source: Completed from questionnaires 2016.

The above table 4.4 shows that 4(36%) of the respondents said that the bank prepare its financial
statement monthly, 3(28%) of the respondents said that the financial statement is prepared by
semiannually and the remaining 4(36%) of the respondents also said that the bank prepares its
financial statements annually. The monthly and semiannually prepared financial statements are
used to know the frequent intervals how things are going they prepared. Normally, financial
statements are prepared of the end of the year and used for external and internal users.

Table 4.5 Proper report of accounting information to decision maker

No Item Response Respondents Percentage

Number
3 Does accounting information properly Strongly agree 1 9%
reported to decision makers? Agree 3 27%
Neutral 3 27%
Disagree 4 37%
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
Table 4.5 shows that 1(9%) of respondents strongly agree the accounting information is properly
reported to decision makers, 3(27%) of respondents agree. While 3(27%) of the respondents is
neutral and 4(37%) of the respondents disagreed with the proper reporting of accounting
information to decision makers. This implies that the accounting information is not properly
report on item to decision makers.

Table 4.6 Easily getting available information

No Item Response Respondents Percentage

Number
4 Does the manager of Wash Strongly agree
international bank get available Agree 4 36%
accounting information easily? Neutral 3 28%
Disagree 4 36%
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
As table 4.6 shows that easily getting availability of accounting information for the manager
4(36%) of the respondents said agree that manager can get available accounting information
3(20%) of the respondents are neutral and the other 4(36%) of the respondents are disagree
regarding to this. So, these shows that majority of respondents said that it is difficult to get
available accounting information for decision making.

Table 4.7 Qualification of accountants and gathering accounting information

No Item Response Respondents Percentage

Number
5 Does Awash International bank Strongly agree
accounts and managers are gathering Agree 3 27%
accounting information for decision Neutral 6 55%
making process? Disagree 2 18%
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
As the above table 4.7 shows that 3(27%) of the respondents agree with the qualification of
accountants and managers in gathering accounting information for decision making process,
6(55%) of respondents are neutral and the other 2(8%) of the respondents are disagreed. So, the
researcher concludes that het qualification of managers and accountants in gathering accounting
information is average level of acceptable.

Table 4.8 Preparation of financial statements with regard to principle of GAAP

No Item Response Respondents Percentage

Number
6 Does the bank accounting prepared Strongly agree 3 27%
financial statements based on GAAP? Agree 6 55%
Neutral 2 18%
Disagree
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
The above table shows that 3(27%) of respondents were strongly agree that accountants of the
bank prepares the financial statements based on GAAP. 6(55%) of respondents agree and 2(18%)
of the respondents are neutral. Therefore, the accountants of the Awash International Bank
prepare financial statement based on the principle of GAA.

4.2.3 Efficient Use of Accounting Information by Manager’s

Manager’s used accounting information efficiently. Because accounting information is essential
to play an important role in the decision making process.

Table 4.9 Proper use of accounting Information by decision makers

No Item Response Respondents Percentage

Number
7 Does Awash International Bank Strongly agree 2 18%
manager’s properly using accounting Agree 5 46%
information in decision making Neutral 2 18%
process? Disagree 2 18%
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
As the above table 4.9 shows that 2(18%) of respondents are strongly agree with the managers
proper use of accounting information in decision making process, 5(46%) of the respondents
agree, 2(18%) of the respondents are neutral and the remaining 2(18%) of the respondents were
disagree with managers proper use of accounting information in decision making. So the
researcher concludes that, majority of respondents were agreed on the manager’s properly use of
accounting information in decision making process.

Table 4.10 Understanding awareness of managers and economists used of accounting

information in decision making process
No Item Response Respondents Percentage
Number
8 Does manager and economists have Strongly agree 1 9%
adequate understanding of awareness Agree 3 27%
about the use of accounting Neutral 2 10%
information indecision making Disagree 5 46%
process Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
In the above table, the respondents shows that 1(9%) of the respondents strongly agree that the
managers and economists of a bank have adequate understanding or awareness about the use of
accounting information in decision making process, 3(27%) of the respondents were agree, wile
2(18%) of respondents said neutral and the rest 5(46%) of respondents said disagree. This shows
that, majority of the mangers and economists lack enough adequate understanding and awareness
about the use of accounting information in decision making process.

Table 4.11 Effective, accuracy and reliability of accounting information in decision making
process

No Item Response Respondents Percentage

Number
9 Is manager of Awash International Strongly agree 2 18%
Bank use accounting information Agree 5 46%
effectively? Neutral 2 18%
Disagree 2 18%
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
As the above table 4.11 item number 9 shows that 2(18%) respondents are strongly agree that the
manager of the bank use accounting information effectively, 5(4%) of the respondents. Also
agreed and 2(18%) of the respondents were neutral with the manager is effective use of
accounting information and also 2(18%) of the respondents also were disagree with manger
effective use of accounting information. This shows that mostly the manager use accounting
information effectively for the process of decision making.

Table 4.12 Accuracy and reliability of accounting information in decision making

No Item Response Respondents Percentage

Number
10 Is the use of accounting information Strongly agree 1 9%
accurate and reliable for decision Agree 3 27%
making of your bank? Neutral 4 37%
Disagree 3 27%
Strong Disagree
Total 11 100%
Respondents Source: Completed from questionnaires 2016.
From table 4.12 item number 10 shows that 1(9%) of the respondents also agree, 4(57%) of the
respondents are neutral and 3(27%) of the respondents were disagreed with the use of accounting
information is reliable and accuracy. Therefore, the bank use of accounting information
indecision making process is averagely accurate and reliable.

4.2.4 Problems related to with use of accounting information in decision

making process.

When you perform day to day activities it may occur problems regarding to the use f accounting
information in decision making process. Table
4.13 Problems related with the use of accounting information in decision making process.

No Item Response Respondents Percentage

Number
11 Does manager and economists have Yes 7 64%
adequate understanding of awareness
about the use of accounting No 4 36%

information indecision making

process Total 11 100%
12 If your answer for question 11 is yes  Errors of financial statements
list the problems  Error in business transaction
 Problem in record keeping
 In accuracy of input data and irrelevant
information.
Respondents Source: Completed from questionnaires 2016.
As the above table 4.13 item number 11 shows that 7(64%) of the respondents said that yes there
is problem related to using of accounting information for decision making process. The other
4(36%) of the respondents are response of number, form the respondents of yes they mention
some problems regarding to the problems in relation with the use of accounting information
indecision making process, like in accuracy of input data, in efficient financial statements and
errors in recording business transactions. Therefore the above problems related with the use of
accounting information in decision making process.

Analysis of interview question that is provided by the manager of Awash International Bank.

1. Accounting information indecision making process.

According to the manager of Wash international Bank making begins with customer
from services, recording customer’s information and then processed this information to
give availably information to the user and the bank up to the preparation of financial
statements.
 Generally, as the manger said the flow of accounting information and decision making
has its own process from the customer front services up to the end of information
processed to give meaningful of the decision maters.

2. Factors affect or hinder accounting information not to play its role in decision making
process of the bank are
The manager replies that the factors that affect the accounting information not to play its
role for Awash international bank is the system installed that affect the banks day to day
activities not fast to transmit information and not to do works properly, efficiently,
relevantly and accurately data during the recording time of customers. The electric power
problem, lack of high qualified professional workers related to the accounting
information are the factors for Awash International Bank.

3. Organizational mechanisms to solve problems

The manager said that the bank tries to solve the problems to the use of accounting
information for decision making were by keeping accounting records of customer’s front
services accurately, reliable and provide timely information for the users of accounting
information for decision making process, by wring highly qualified workers and
professionals related to record keeping of customer’s information and the banks for the
use of decision makers. The system installed is try to be fast through using of modern
technological connections.
4. Advantage of using of accounting information in decision making process.
the advantages of using of accounting information in decision making process helps the
manager to pass preparing fast decision making regarding to the bank, to measure and
report how the business is actually going on and to show the bank performance by
preparing correct financial statements.
 CHAPTER FIVE
5. Finding, Conclusion and Recommendation

Based on the analysis and interpretation results of the study on the role of accounting
information in decision making the researcher has drown the following finding, conclusion and
recommendations.

5.1 Summary of Major Finding

 The researcher has assessed the role of accounting information in decision making
process of Awash International Bank. From the study the following findings are
identified.
 Accounting information plays a vital role of a bank in decision making process since, it is
provides relevant records of customer information during customer from service.
 The majority of respondents said that accounting information is important for
management bodies to plan the lending and borrowing policy of the bank.
 Financial and managerial accounting information are style managerial accounting is
important of provide information about the banks future operation plans and to develop
the overall objectives of the business strategy of Awash International Bank.
 The majority of respondent also agreed that the financial statements of the bank are
prepared annually at the end of the fiscal year.
 The preparation of financial statements for the bank is based on the principle of GAAP.
 The majority of the respondents were agreed that it is difficult to get easily available
accounting information for decision making of the bank due to the net work breakdown
and misstatements in accounting records on time accounting information for decision
makers.
 The majority of respondents said that there are problems related with the use of
accounting information in decision making process are inaccurate and irrelevant data
recording during customer’s front service time, in efficient financial statements and errors
in business transaction records.
5.2 Conclusion

The researcher was conducted it senior essay study in Awash International Bank to assess the
role of accounting information indecision making process. the researcher was conducted on 11
workers of Awash International Bank that is the total target population as collected the data
through using of questionnaires and interview of Awash International Bank that is the total
population as collected the data through using of questionnaires and interview of the awash
international bank manager’s.

Based on the major finding of the study the following conclusion is drawn.

 Accounting information is an information system that plays a vital role in decision

making process of the bank that the management bodies use if for deciding the lending
and borrowing policies of the bank. Both financial and managerial accounting
information are used for the bank to perform the day to day activities and to develop the
overall business strategy of the bank. The preparation of financial statement is based on
the principle.
 The financial statement of the bank is mainly prepared of at the end of the fiscal year.
However, the accounting information of the bank was not properly reported to decision
makers due to different difficult like, terminating of system connection failed. This
creates the accounting information is not fast to transfer and not to do the accounting
worker’s properly fastlly and efficiently form the customer from services up to the
preparation of financial statements to change available information of decision makers of
the bank.
 The problems which are related with the use of accounting information were: problems
with good record keeping, error in recording business transaction, in accurate and
irrelevant input data during customer from services periods.
 The problems which is existed due to electric power supply is also another factor for
accounting information not to play its role in decision making process of the bank.
5.3 Recommendations

Following the identification and based on it the researcher has come up with the following
recommendations.

 Since, the accounting information plays a vital role in decision making process of once
organization. The Awash international bank accounting information should be relevant
for the decision makers. The accurate, relevant data for managers to decide about the
banks’ present and future plans and to achieve the banks objective so, the accounting
information should be relevant for users.
 The Awash International Bank should also prepare its financial statements frequently
with the period of weekly and monthly in addition of semiannually as much as possible
because different internal and external users use it frequently. When financial statement
are prepared weekly and monthly they help the bank to know day to day performances
and to focus on how the business is going on.
 The Awash International Bank should improve the skill and knowledge of its functional
worker’s who, are participated on the banks activities especially on the use of accounting
information for decision making process through, giving training and development
program about how to gather the accounting information according and reporting the
accounting information in decision making process.
 The bank should also create awareness and enough understanding about the use of
accounting information in managerial decision making process who because the
management is important that control the banks day to day’s activities and decide on
behalf of the bank so that, the management should be enough understanding in the use of
accounting information for decision making process.
 Awash International Bank should be also solve the problems related with the use of
accounting information in decision making process through, making the input data
customer front services accurate, relevant, using on time and update the system
connection to be fast for using of accounting information for decision making process
other on is keeping records properly, availably and transfer on time accounting
information for decision makers through, reduction of the errors that are occurred during
business transaction and preparing of financial statements.
 The Awash International Bank is also the problem of electric power supply so the bank
should give due attention for this because the electric power is important for performing
the day to day accounting information activities for the bank so, this problem should be
identified and to be substituted by generator incurring additional cost for it and give
adequate service for customers without any power problem.
Reference

- Anderson, Needless, 1990, principle of accounting 5th edition.

- Ash, Ahuja, 2006. Encyclopedia 1st Edition New Delhi.
- Black, 2010. Business statistics
- Fees Warrn, 1993. Principle accounting 16th edition.
- Harrison, Roger W. 1989. Principle of Accounting 6 th edition. Home, Wood
American Bankers association.
- In Gram, Robert W, 2001. Financial Accounting for decision making 4 th
edition, south western college, USA.
- James Hall A. 1998. Accounting Information System 2nd edition, South
Western College USA.
- Mengistu Bogale, 2008. Principle of Accounting 1st edition.
- Needless, Believer E, 2002. Principle of Financial Accounting 5 th edition,
Hough-ton Mifflin Company, USA.
- Smith Jack L, 1989. Principle of accounting 3 rd edition, Growth Hilling New
Work.
- Taylor, Dannis 1995.Core concept of accounting introduction to accounting
information. Grow hill company New Work.
 Appendix
Wachemo University Faculty of Business and Economics
Department of Accounting and Finance
Dear respondents!
This questionnaire is prepared to obtain primary data on the assessment of the role
of accounting information in decision matching process of the Awash International
Bank.

The respondent kindly requested to give relevant information and your cooperation
is valuable and complete response will be keep confidential and used only for
academically research purpose.

Direction

 There is no need of writing name

 Please indicate your answer by putting “(”

Part I personal information

Personal information

1. Sex male female :

2. Age:20 – 3 5 36-50 above50
3. Martial statues :single Married divorced
4. Qualification :Accounting Economics Management
Banking and finance if any specify
5. Educational back ground: Diploma Degree Masters
Part II of the questionnaires
The following questions concerned about the role of accounting information in
decision making.

1. Does accounting information plays important role in decision making

process f the Awash international bank?
Strongly agree Agree Disagree
Strongly disagree Neutral
2. Business organizations normally prepare their financial statements. Do you
prepare your own financial statements for decision making process? How
often?
Yes, weekly yes, semiannually
Yes, monthly yes, annually No whatever
3. Does reported properly accounting information to decision makers?
Strong agree Agree Disagree
Strongly disagree Neutral
4. manager of Awash International Bank get useful accounting information
easily
Strongly agree Agree
Strongly disagree Neutral Disagree
5. Awash International Bank accountant and managers are well qualified in
gathering the accounting information for decision making process
Strongly agree Agree Disagree
Strongly disagree Neutral
6. Accountants of Awash International Bank prepared financial statements
based on GAAP
Strongly agree Agree Disagree
Strongly disagree Neutral
 7. Awash International Bank manager properly use accounting information for
decision making process
Strongly agree Agree
Strongly disagree Neutral Disagree

8. Manager and economists in Awash International Bank have adequate

understanding or awareness about the use of accounting information in
decision making
Strongly agree Agree
Strongly disagree Neutral Disagree

9. The use of accounting information in decision making process is accurate and

reliable for the bank
Strongly agree Agree
Strongly disagree Neutral Disagree

10. Is Awash International Bank managers use accounting information

effectively? Yes No
11. Is there any problem in relation with using of accounting information
indecision making process of the bank? Yes No
12. If your answer for question 11 is yes places mention them _________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
 Interview question for the manger
1. What is the flow of accounting information in decision making process?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________

2. What factors affect hinder accounting information not to play is role in

decision making of the bank?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
How the bank try to solve the problems related to the use of accounting
information? _________________________________________________
_____________________________________________________________
3. What is the advantage of using of accounting information in decision
making process? _______________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________