JIMMA UNIVERISTY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF ACCOUNTING AND FINANCE

TITLE:-ASSESSMENT OF ACCOUNTING INFORMATION SYSTEM

PRACTICE COMMERCIAL BANK OF ETHIOPIA (A CASE STUDY
OF GASUBA BRANCH)

A RESEARCH PAPER SUBMITTED TO DEPARTMENT OF

ACCOUNTING AND FINANCE FOR PARTIAL FULFILLMENT OF B.A
DEGREE IN ACCOUNTING AND FINANCE

BY: ENDRIAS WOLDE ID 3801/07

ADVISOR: MOHAMMED .G (MSC)

May, 2017

JIMMA, ETHIOPIA

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 ABSTRACT
This research paper is entitled as assessment of accounting information system
practice in case of commercial bank of Ethiopia in Gesuba branch. The main objective of this
study is than in order to assess the overall accounting information system practice in case of
Ethiopia in the branch of Gesuba specially, and to identify the kind and type of computer based
information system. To achieve the stated objective this research I have intended to collected
data from both primary and secondary source of data. In order to collected primary data the
researcher used questionnaires. And to collect secondary data, I used documents such as annual
reports, internet and books. The type of research use for this study was descriptive the sampling
technique used in this research was judgmental sampling.

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ACRONOMIY
AIS according information system

CBE commercial bank of Ethiopia

DSS decision support system

EDP electronic data processing

EIS executive information system

FMISUB function management information subsystem

MIS Management Information System

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 Table of Contents

Table of Contents
ABSTRACT................................................................................................................................................II
ACRONOMIY...........................................................................................................................................III
CHAPTER ONE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................................1
1.1 BACKGROUND OF THE STUDY............................................................................................................1
1.2 STATEMENT OF THE PROBLEM..........................................................................................................1
1.3 OBJECTIVE OF THE STUDY..................................................................................................................3
1.3.1 GENERAL OBJECTIVES.................................................................................................................3
1.3.2 SPECIFIC OBJECTIVES..................................................................................................................3
1.4 SIGNIFICANCE OF THE STUDY............................................................................................................3
1.5 SCOPE OF THE STUDY........................................................................................................................3
1.6 ORGANIZATION OF THE STUDY..........................................................................................................3
CHAPTER- TWO............................................................................................................................................4
REVIEW OF RELATED LITEREATURE.............................................................................................................4
2.1 DEFINITION OF AIS.............................................................................................................................4
2.1.1 ACCOUNTING..............................................................................................................................4
2.1.2 INFORMATION............................................................................................................................4
2.1.3 SYSTEM.......................................................................................................................................4
2.1.4 INFORMATION SYSTEM..............................................................................................................5
2.1.5 ACCOUNTING INFORMATION.....................................................................................................5
2.1.6 ACCOUNTING INFORMATION SYSTEM....................................................................................5
2.2 ACCOUNTING METHOD.....................................................................................................................5
2.2.1 ACCRUAL BASIS OF ACCOUNTING...............................................................................................5
2.2.2 CASH BASIS OF ACCOUNTING.....................................................................................................6
2.2.3 ACCOUNTING SYSTEM................................................................................................................6
2.2.4 FISCAL YEAR................................................................................................................................6
2.5 TRANSACTION PROCESSING..............................................................................................................6
2.5.1 COMPONENT OF THE TRANSACTIONPROCESSING SYSTEM........................................................6

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 2.6 COMPUTER FRAUD AND SECURITY....................................................................................................8
2.6.1 BUSINESS ETHICS........................................................................................................................8
2.6.2 COMPUTER ETHICS.................................................................................................................8
2.7 INTERNAL CONTROL..........................................................................................................................8
2.7.1 CONTROL ENVIRONMENTAL.......................................................................................................9
2.7.2 RISK ASSESSMENT.......................................................................................................................9
2.7.3 CONTROL ACTIVITIES..................................................................................................................9
2.7.4 INFORMATION & COMMUNICATIONs........................................................................................9
2.7.5 COMMUNICATION......................................................................................................................9
2.8 FUNCITION OF AIS...........................................................................................................................10
2.8.1 DATA COLLECTION....................................................................................................................10
2.8.2 DATA PROCESSING....................................................................................................................10
2.8.3 DATA BASE MANAGEMENT......................................................................................................10
2.9 INFORMATION GENERATION...........................................................................................................11
2.10 BANKING INFORMATION SYSTEM (BIS).........................................................................................12
2.10.1 BANKING COMPANIES AS INFORMATION PROVIDERS............................................................12
2.10.2 BANKING COMPAINES INFORMATION SYSTEM USERS...........................................................12
2.10.3 INFORMATION MANAGEMENT...............................................................................................13
2.11 TYPES” COMPUTER- BASED” INFORMATION SYSTEM...................................................................14
2.12 IMPIRICAL STUDY...........................................................................................................................14
CHAPTER THREE........................................................................................................................................15
RESEARCH METHODOLOGY.......................................................................................................................15
3.1 RESEARCH DSIGN.............................................................................................................................16
3.2 Population Target and Study Area...................................................................................................16
3.3 source of data and method data collection..................................................................................16
3.4 SAMPLE SIZE AND SAMPLING TECHNIQUES....................................................................................16
3.5 METHOD OF DATA ANALYSIS...........................................................................................................16
CHAPTER FOUR..........................................................................................................................................19
DATAANALYSIS & INTERPRETATION..........................................................................................................19
4.1 INTRODUCTION...............................................................................................................................19
5.1 CONCLLUSION..................................................................................................................................28
5.2 RECOMMENDATION........................................................................................................................29

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DEC LARATION...........................................................................................................................................36

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 CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
According information system is a collection of resources such people and equipment designed
to transformation financial and other data in to information. This information is communicated to
a wide variety of decision marker accounting system performs this transformation whether are
essentially manual or thoroughly computerized (George 200).

An effective accounting information system is essential any organization long success without a
means or monitoring the even that occur there would be no way to determine how well the
organization performance every organization also needs to tack the effect of various events on
resources that are under its control information about agent who participates in those events
necessary to assign responsibility for action taken (marshal, 2005).

According information system as a group of inter component that work collective to any out
input, processing, output storage and control action in order in to convert data to information
product that can be used to support forecast in planning control, coordination decision making
and operational activates in an organization in terms of components that undertaken this activity,
they can be classified in to five basic resources of help maintain and operate the system such as
is manager and technical support staff hard ware resources includes computer and other item
such as printer software resource refer to computer programs known as software and associated
instruction annuals communication resources includes networks and the hard ware and software
needed to support them. Data resources cover the data than an

Organizations have access to such as computer data based and paper file.

1.2 STATEMENT OF THE PROBLEM

The according information system (AIS) consist of the retoured and method use to initiate
identify, analyze, classify and record the organizations transaction and to account for the related
asset and liabilities. The quality of information the IAS generates impact management’s ability to
take action and make decisions in connection with the organizations operation and to prepare

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reliable financial statements. An effective accounting information system was help to identify
and record all valid financial transaction, provide timely information about transaction
insufficient detail; to permit proper classification and financial report, accurately measure the
financial value of transaction so their effect can be recorded in financial statement and finally it
provide accurately recorded transaction in the time when they accrued (James, 2008).

There were problems that rose from the fusion of accounting information system fields in
accounting point of view. One of those problems was that computerized system was at constant
risk of hackers. That means breaking the password and then robes the information and different
things. Another problem was that of computer fraud. That means the theft, misuse or
misappropriation of assets by altering computer readable records and files.

Another related problem was power failures, virus, and loss of information. There was relatively
high cost accounting expert system be sided this system be up to date usually firms staff needed
some store of special training courses of effective use of the system. Another issue was about
network. Without the availability of network, there was no provision of qualified services.

In light of the discussions presented above this study assessed the accounting information system
practices of Commercial Bank of Ethiopia.

This study tries to answer the following basic research questions.

 How is the accounting information system practice carried out in commercial bank of
Ethiopia
 What kind of accounting information system does the bank uses?
 Which types of computer based information system bank perform
 In what way accounting information system to provides quality serves for
customer?

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1.3 OBJECTIVE OF THE STUDY
1.3.1 GENERAL OBJECTIVES

The general objective of the study is to assess the practice of accounting information
system in commercial bank of Ethiopia Gesuba branch

1.3.2 SPECIFIC OBJECTIVES

 To assess the accounting information system practice in commercial bank of Ethiopia
 To identify the kind accounting system activities the bank use.
 To assess the security of the bank.
 To evaluate the type of computer based information system the bank use.

1.4 SIGNIFICANCE OF THE STUDY

This study was help to assess the overall accounting information system of commercial bank
of Ethiopia in Gesuba branch. This research was help the researcher to come up with
practical situation, it was helps the company to improve effectiveness of accounting
information system practice and it helps as data sources for other researcher.

1.5 SCOPE OF THE STUDY.

Accounting information system is a comprehensive term that exists in each and everywhere
and it has great importance to management activity or administration. Any existing
organization administration needs AIS to be effective. The study focuses on assessment of
accounting information system practice and challenges on commercial Bank of Ethiopia in
Gesuba Branch

1.6 ORGANIZATION OF THE STUDY

The study is organized into five chapters. The first chapter’s introduction back ground of the
study area by the comprising different information, statement of problem, objective of the study,
significance of study scope of study the second chapter describes review of related literature the
third chapter focuses on research methodology. The fourth chapter contains data analysis;
interpretation and finally the last chapter provide conclusion and important recommendation.

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CHAPTER- TWO

REVIEW OF RELATED LITEREATURE

2.1 DEFINITION OF AIS

Before proposing a comprehensive definition of the AIS we might consider the meaning of
each word individually. And then we can comprise definition and set of purpose for the AIS.

2.1.1 ACCOUNTING
Accounting is often called the ‘’language of business’’ this language can be viewed as an
information system that provides essential information about the financial activates of
unenvied for various individual or group for their use in making information judgments and
decision as such accounting an term of transaction data made by hand printing by mechanical
and electronic or magnetic impressions on tape or disk. Fees, 1990.

2.1.2 INFORMATION
Common definition information is that it is data that have been processed so that they are
meaningful. This require a process that is used to product information which involves
collecting data and then subjecting them to a transformation process in order to create
information, some examples of information include from cast or a financial statement
(Elizabeth, 2008).

2.1.3 SYSTEM
A system can defined as a collection of component the twice together towards a common
goal. The objective of a system as a single legal and of then system contain several sub goal,
all contributing to meeting the overall system goal for example the finance, operation and
making areas of the organization should all have a goal which together help to achieve
overall all corporate objective it can be see that in system data are used as the input for a

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 process that create information as an output in order to evaluate the performance of the
system some kind of feedback mechanism is required (Elizabeth, 2008).

2.1.4 INFORMATION SYSTEM

The tern information system suggests the use of computer technology in an organization to
provide information to users. A computer system is a collection of computer hard ware and
software designed to transform data into useful information (George 2000).

2.1.5 ACCOUNTING INFORMATION

Being information system an accounting information system must have the target system it
should be obvious the target system must be business operation in a narrow sense. Of the non-
accounting aspects of business operation are covered by information systems, such as human
resources information system management information, production planning/ scheduling system,
strategic planning system soon. The target system, for an accounting system have to do with the
aspect of business operation than have with the aspect of business operations that have to do with
accountability for the assets/ liabilities of the enterprise the determination of the result of
operation that ultimately leads to the computation of comprehensive income., leads to the
computation income and the function reporting aspect of business operation (George, 2000).

2.1.6 ACCOUNTING INFORMATION SYSTEM

We might an accounting information system as a computer base system designed to transform
accounting data information. However, we use the term accounting information system more
broadly to include transaction processing cycle the use of information technology and the
development of information system, (George, 2000).

2.2 ACCOUNTING METHOD

2.2.1 ACCRUAL BASIS OF ACCOUNTING
Revenue is recognized when realized and expense are recognized when incurred without regard
to the time of cash receipt or payment the focus of the accrual basis of accounting is on the
realization of revenue, the incurrence of costs and the matching of revenue is realized with cost
expired (expenses) (mosich,1984)

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2.2.2 CASH BASIS OF ACCOUNTING

Revenue is recorded only when is received and expenses are recorded only when is cash is paid
the determination of income thus res on the income of revenue and payment of expenses, rather
than the realization and the incurring of expense. (Mosich, 1984)

2.2.3 ACCOUNTING SYSTEM

The way in which management is given information for use in conducting the affairs of the
business and in reporting to owners creditors and other interested parties is called the accounting
system in general sense, any accounting system includes the entire network of the
communicatory used by a business organization to provide needed information.( Fee, 1990)

2.2.4 FISCAL YEAR

The maximum of an accounting period is usually one year which includes a complete cycle of
the seasons and of business activation. Income and property taxes are also bases on yearly
periods and thus require that annual determination be made.

The annual accounting period by an enterprise is known as its fiscal year. Fiscal year ordinarily
begin with first day of the particular month selected and end on the last day of the twelfth month
hence. The period most commonly adopted is the calendar year, although other periods are not
unusual, particularly for incorporated business for example an enterprise may adopt a fiscal year
that ends when business activities have reached the lowest point in the enterprise annual
operating cycle. Such a fiscal year is term the natural business year (Fees 1990).

2.5 TRANSACTION PROCESSING

The term transaction processing encompasses the variety of activities an organization must
undertake to support its day to day operation.

2.5.1 COMPONENT OF THE TRANSACTIONPROCESSING SYSTEM

The principal component of transaction processing system includes inputs, processing storage
and out these components is part of both manual and computerized system.

INPUT

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Source documents, such as customer order, sale slips invoice, purchase order, and employee time
cards are the physical evidence of inputs into the transaction processing system. They serve
several purposes:

CAPTURE DATA

Facilitate operation by communicating and authorizing operation the process.

Standardize operation by indicating what data rewire recording and what action need to be taken.

Provide a performance file for future analysis, if the documents are retained.

PROCESSING

Processing involves the use of journals and register to provide permanent and chronological
record of input. The entries are done ether by hand in simple manual system (journalized) or by a
data entry operator using a person computer. Journals are to record financial accounting
transaction and register are used to record other type of data not directly related to accounting.

STORAGE

Ledger and file provide storage in both manual and computerized systems. The general; ledger
the account/ voucher payable ledger and the account receivable are the record of final account.
They porridge summaries of firm are financial accounting transition.

A file is an organized collection of data. There are several type of files. A transaction usually
contra data that temporary rather than permanent by contrast a master file contains data are a
more permanent of continuing interest.

OUT PUT

There are wide varieties of output is from transaction processing system. Any document
generated in the system is an output some document are both output and input e.g. a customer
invoice is an output from the order entry application system and also an put document do the
customer other common out puts of a transaction processing system are the trial balance financial
report, operetta report pay cheeks, bill of lading and voucher and voucher payment for vendors.
(George, 200)

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2.6 COMPUTER FRAUD AND SECURITY
Fraud is and all means person used to gain an unfair advantage over another person. Fraudulent
act includes lire suppressions of the truth, tricks, and cunning and this involve a violation a trust
or confidence. Losses from fraud in the United States are to be about 500 billion year

Either someone with an organization or external party can commit fraud. Not surprisingly,
former and current employees (some time called knowledgeable inside) are much more likely to
perpetrate fraud tan are non-employees because employees understand a company system and its
weaknesses, they are better able to commit a fraud eared make it more difficult for often referred
to as white- collar criminals, to dusting wish them from criminal who commit violent crimes.

Internal fraud can be broken down into two categories misappropriation of asset and fraudulent
reporting misappropriation of asses or employee fraud is committed by a person or group of
personal for personal financial gain, (marshal, 2003)

2.6.1 BUSINESS ETHICS

Ethics pertains to the principles of conduit individual use in making choice and guiding their
behavior situation that involves the concept of right and wrong more specifically, business. This
involves finding the answer to two question; (1) how do managers have recognized what right
how do they a achieve it?

Ethical issues in business can be divided in to four area equality rights, honesty and the exercise
of corporate power (James, 2008).

2.6.2 COMPUTER ETHICS

The of information technology in business have had a major impact on society and thus raises
significant ethical issue regarding computer crime, working condition privacy and more
computer ethics is the analysis of the nature and social impact of computer technology and the
corresponding formulation and justification of the policies for ethical use of such technology.
(This includes) concern about software as well as hardware themselves (James, 2008).

2.7 INTERNAL CONTROL

Internal carnal is a process- affected by an entity board of directors, management, and other
personnel- designed to provide reasonable assurance regarding the achievement of objectively

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the following categories; (a) reliability financial reporting (b) effectiveness and efficiency of
operation, and (c) compliance with applicable law and regulations.

An organization internal control process consists of five element the control environment risk
assessment, control, activities, information and communication and monitoring.

2.7.1 CONTROL ENVIRONMENTAL

An organization control environmental, the first five component of internal control is the
foundation of all a then component of the control system. The control environmental is the
collective effective of various factors on establishing enhancing or mitigating the effectiveness of
specific policies and procedure.

In the words, the control environment sets the overall tone of the organization and influence the
control conics business of the employees.

2.7.2 RISK ASSESSMENT

Risk assessment the second of the fire component of internal control, is the process of identifying
analyzing and managing risk that affect the company objective.

2.7.3 CONTROL ACTIVITIES

Control activities, comprising the third component of internal control, are the policies and
procedures established to help ensure that management directives are carries out

2.7.4 INFORMATION & COMMUNICATIONs

Information & communication comprise the fourth component of control. Information refers to
the organization accounting to identify assemble, analyze, classify, record and report the
organization transaction and maintain accountability of the related assets and liabilities.

2.7.5 COMMUNICATION.

Communication relates to providing a clean understanding all policies and procedure realty
control good communication.

MONITORING

Monitoring the fetch comport of internal control, involved the ongoing process of assessing the
quality of internal control over time and taking corrective action when necessary (Marshal,
2003).

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2.8 FUNCITION OF AIS
Every organization is performing the major AIS.Those are

2.8.1 DATA COLLECTION

Is the first operation stage information system? The objective is to ensure that even data entering
the system are valid. Complete and free from material error. In many respect, this is the most
important stage in system. Should transaction error pass through data collection undetected, the
systems process the errors and poor decisions by the user. To rules govern the design of data
collection procedures relevance and efficiency. The information system should capture only
relevant data a fundamental of the system designer is to determine what is and what is not
relevant. Hero she does so by analyzing the user need only data that ultimately contribute to
information (as defined previously) are relevant. The data collection stage should be designed to
filter irrelevant fact from the system. Efficient data collection procedures are designed to collect
data only once. These data only once these data can be made available to multiple users
capturing the same data more than once lead to data redundancy and inconsistency. Data
redundancy over loads facilitates and reduces the overall efficiency of the system. In consistency
among redundant data elements can result in appropriate action and bad decision (James, 2000).

2.8.2 DATA PROCESSING

Once collect data usually require processing to produce information tasks in the data processing
stage range from simple to complex. Examples includes mathematical algorithms (such as linear
programming modes used for produce and positing and summarizing procedure used for
accounting application (james,008).

2.8.3 DATA BASE MANAGEMENT

The organizations data base is physical repository for financial and non-financial data. We use
the term data in the generic sense. It can be a filing cabinet or computer disk regardless of the
data bale physical from we can represent its contents logical hierarch. The level in the data
hierarchy- attributes, record, and file (James, 2008).

DATA ATTRIBUTE

The data attribute is the most elemental piece of potentially useful data in the data base. An a
tribute is logical and relevant characteristics an entity about which the firm captures data

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RECORD

A record is a complete set of attributes for a single occurrence with in an entity class. For
example a particular customer name address, and account balance is one occurrence (or record).

FILE

A file is a complete of record of an identical class. For example, all the AR records of the
organization constitute the AR file similarly, file are constructed for other classes of record such
as inventory, account payable and payroll the organization data base is the entries collection of
such file (James, 2008).

2.9 INFORMATION GENERATION

Information generation is the process of compiling arranging formatting and presenting
information to users information can be an operational document such as ales order, as structured
report, or a message on a computer screen, regard legs of physical from useful summarization
relevance the completeness and summarization.

Relevance:- the contents of are port or document sense a purpose. This courage to support
manager’s decision clerks test.

Time lines:-the age of information is a critical factor in determine is use fullness. Information
must be non-older than the time period of the action its supports.

Accuracy:-information must be free from material. However materiality is a difficult concept to

quantity? If it no absolute value it is a problem-specific concept. This means that in some case,
information may be lower.

Completeness:- no piece of information essential to a decision or takes should be missing

Summarization information:-should be aggregated in accordance with the heed lower level

managers tend information that is highly detailed. As information low up ward though the
organization to management it be become more summarized, (James, 2008).

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2.10 BANKING INFORMATION SYSTEM (BIS)
Bank information is one of the ways the bank after for receiving information. Bank information
system allows the client to get information by phone or fax about the bank, its service, exchange
rates, the accounts and forward message to the bank or any other system subscribers.

Benefits bank information system

 Provides interactive communication b/n the clients and the bank 24 hours a day
 Information access and transfer can be performed any part of the world
 The bank guarantees confidentiality by granting the client the identification number and
the password these entered the phone hays for three more bank information system is
connected to a multi-channel phone number (jams, 2008).

2.10.1 BANKING COMPANIES AS INFORMATION PROVIDERS

Bank companies must provide information to a number of groups, customers, investors and stock
holder information system play vital role in the business success of a bank information
technology can provide the information a business need for efficient operation effective
management and competitive advantage. However if information system do not properly support
the strategic objective business operation or management needs of an enterprise they can
seriously damage its projects for survival and success so the proper management information
system is a major challenge for managers, to be a good information system manager the
company user. Group of have specific information needs bank companies much provide accurate
time information business (James, 2008).

2.10.2 BANKING COMPAINES INFORMATION SYSTEM USERS

Be sides providing information banking companies also use vast quantities of information an
information system is asset of people, procedures and resource that collects transforms, and
disseminates information in an organization do as manager rely on many types of information
system(IS). The might include simple manual (paper, and pencil) information system and
information (word of mouth information system. However, know a day all of the banking
industries are developing to computer based information system, that use hard ware, software
telecommunication, and other forms of information technology(IT) to transform data resources in
to a variety of information products, the banning compares use information to operate efficiently
an bank need together and evaluate information about its entered operation such as how well the

12
company is using its people, its money and its technology company need to know most managers
are managerial end user. The information system function represents.

 A major function area of business that is as important to business that is as important to

business success as the faction of accounting finance, operation management, and
marketing & human resource management.
 A major source of information and support needed to promote effective decision
marketing manager.
 An important ingredient in developing competitive products and services that give an
organization a strategic advantage in the global market place
(James, 2008)

2.10.3 INFORMATION MANAGEMENT

Successful companies have always under stood the important having using quality information
however information management become major areas of study only when the age of
information was us hired in by the introduction of computer technology. As a management
concept information management assumer than information is an essential maximum efficiency
and effectiveness. Information management is combination of system and technology designed
to maintain and improve the effectiveness of a company by making sure that information user
receive the right information at the right time in the right format businesses have to take a
number of essential steps in order to manage information effectively. Businesses must:

 Identify the information that customer stock holder want to provide services.
 Modify old system and technology or introduce new system and technologies needed and
 Monitor system and technology to make sure they provide the right information are need
benefits of information management of course the reason business are willing to pay for the
cost of information if have is prodding most of benefits. Among these benefits are:-
 Better customer service
 More realist goal setting
 Better decision making
 Improved problem solving
 Increased productivity
 Increased productivity

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  Increases efficiency and effectiveness
 Better understanding of the business environment
 Better understanding of internal customer. (james,2008)

2.11 TYPES” COMPUTER- BASED” INFORMATION SYSTEM

The information system suggest the use of computer technology in an origination to provide
information to use a computer- based information system is collection of computer hard ware
and software designed transform data into useful information.

1. Electro data processing system: use of computer for transaction oriented data processing
2. Management information system uses of computer provide decision oriented information
manager.
3. Function management information sub system: concept apply to separate function area
within the organization.
4. Decision support system: is designed for specific type of decision for specific user
example non-routine actives.
5. Expert system: uses of knowledge for decision make expertise decision
6. Executive information system: strategic need for top level mgmt.
7. Accounting information system: design to transform accounting data in to information.
8. Electronic networks: are group of computer that are connected together electronically.
They make it possible for companies to conveniently assemble transaction data and
distribute information across multiple physical locations

2.12 IMPIRICAL STUDY

 Addis who conducted his research on accounting information system practice in
Commercial Bank of Ethiopia in Gesuba branch identified the following problem.
 The duties and responsibilities given is in Commercial Bank hence
duties such as assessing information technology information system are
not enough.
 Even if there are enough skilled and of qualified personnel in
Commercial bank relation with qualified personnel to perform AIS
activities effectively.
 Less initiative from employees

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  Less training given to the personal concerns AIS
 Legging behind at the competitive advantage of
 The banks have been somewhat enough hard ware and software devices. But it needs
additional hardware & software package installation on order to provide effective service
for customer &provide appropriate information for the bank.

CHAPTER THREE

RESEARCH METHODOLOGY

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3.1 RESEARCH DSIGN
The objective of the study would to assess the accounting information system practice in the
bank institution to collected and analyzed data in relevant manner for purpose of conducting this
study and come up with more satisfactory solution to the problem part.

3.2 Population Target and Study Area

In the data analysis section the collected data from questioners distributed to the employee of the
commercial bank of Ethiopia in case study of Gesuba branch would analyzed& interpreted. After
the necessary data is collected the data edited and analyzed by considering the basic research
questions. The finding is presented by using statistical loot like table, & percentage

3.3 source of data and method data collection

To conduct this study the researcher used both primary and secondary data source. In order to
conducted this research the researcher would use the primary data source. This primary source
would be collected through questionnaires which are distributed to the employee of the bank.
Questioners would be presented using both close ended and open ended & from this entire all
questionnaire source are lost are lost because respondent negligence. In ordered to collect
secondary data researcher would be use documents such as annual reports, internet and books

3.4 SAMPLE SIZE AND SAMPLING TECHNIQUES

The sample selection method use in this research would judgmental sampling because the
researcher to get real information from employee and manager. The sample size was simply
selecting employee of the bank by the judgmental sampling technique in commercial bank of
Ethiopia in Gesuba branch the total population in the organization is 49 worker including
manager from this 23 employee is use as the sample size (Organization,2009)

The sampling method used was the judgmental sampling method because of the users of
accounting information is accountant and manager so the researcher distributed the questionnaire
to the employee to get relevant data by the researcher interest.

3.5 METHOD OF DATA ANALYSIS

In the data analysis section the collect data from question distributed to the employee of the
commercial bank of Ethiopia in case study of Gesuba branch will be analyzed& interpreted.

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After the necessary data is collected the data edited and analyzed by considering the basic
research questions. The finding is presented by using statistical loot like table and percentage

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CHAPTER FOUR

DATAANALYSIS & INTERPRETATION

4.1 INTRODUCTION
This chapter has focused on the data analysis and interpretation which gathered through
distribution of questionnaires to the employees of commercial bank of Ethiopia Gesuba branch.
This chapter also contains table with in data gathered & detailed interpretation of giving
comments on the data. The research distributed 23 questionnaire from the questionnaire 20 or
87% of the questionnaire is collected because some respondent has lost the questionnaire so the
research tried to do the analysis based on the collected 20 or 87% of the questionnaires.

TABLE 45.1 WORK EXPERIENCE OF RESPONDENT

Item Respondent No of respondent Percentage

Work experience One year 4 20%

Two year 6 30%
Above three year 10 50%
Total 20 100%
Source: researchers own computation from questionnaire

As it indicated in above table than 4(20%) of the respondent it work for one year and 6(30)
of the respondent is work for two year, and 10(5o) of the respondent is work above three
years .This indicate that half of the respondent has worked for above three year it indicates
that this respondent has more experienced with AIS practice in relative with that of the two
response.

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 TABLE 4.2 EDUCATION LEVEL

Item Response No of response Percentage

Education Diploma 0
Degree 13 65%
Master degree 7 35%
Total 20 100%
Source: researchers own computation from questionnaire

As it’s clearly indicated in the above table that all of the respondent education

TABLE 4.3 FIELD OF STUDY

Item Response No of response Percentage

Field Accounting 13 65%
Management 4 20%
Economics 3 15%
Total 20 100%
Source: researchers own computation from questionnaire.

As its clear indicated in the above table that 13(65%) of the respondent was graduated in
accounting, & 4(20%) of the respondent was graduated in management, & 3(15%) of the
respondent was graduated in economics this show that majority of the respondent was graduated
in accountant.

TABLE 4.4 USAGES OF AIS

Item Response No of respondent Percentage

Usage AIS in the bank Excellent 4 20%
Very good 6 30%
Good 10 50%
Very good
Total 20 100%
Source: researchers own computation from questionnaire

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Attempt has been made to know the appropriateness of accounting information system position
given in an organization structure of commercial bank of Ethiopia Gesuba branch respondent
have been asked about the appropriateness of AIS position of the bank structure and the response
has given in the following table.

As indicated in the above table 20(20%) of the respondent stated that AIS position of the bank is
excellent: 6 (53.75%) of the respondent elaborated as very good, 10(50%) of stated that as good.
From this analysis the majority of the respondent stated that AIS usage is good and the minority
of the respondent stated that is excellent.

TABLE 4.5 EMPLOYEE RESPONCES REGARDING ADDITIONAL SECTION.

ITEM RESPONSE NO OF RESPONDENT PERCENTAGE

Supporting section Yes 10 50%
No 4 20%
I don’t know 6 30%
Total 20 100%
Source: researchers own computation from questionnaire

The response which is gathered from the employees of the commercial bank of Ethiopia Gesuba
branch about addition section should incorporated to accounting information system department
of the bank has been resented as follow.

As it clearly shown in the above table10(50%) of respondent believe that there should be a need
to incorporated additional section for AIS, 4(20)of respondent elaborated that there is no need to
incorporated addition section forays in the bank and the remaining 6(30%) of respondent stated
that they not know whether to incorporate to AIS division section or not this implies that
majorities of the respondent agree in the there should be additional section to incorporate with
AIS almost the minimum of the respondent stated that there should not be addition section &
more of from previous respondent they don’t know.

TABLE 4.6 HUMAN RESOURCES

ITEM RESPONSE NO OF RESPONDENT PERCENTAGE

21
 KILID HUMAN POWER YES 20 100%

NO 0
TOTAL 20 100%
Source: researchers own computation from questionnaire.

The above table resented that 20(100%) of the respondent have respond that there are qualified
personnel in the company. This indicates that there are qualified personnel, to perform the
activities of accounting information system in the bank.

TABLE 4.7 SUPPORTSTO AIS DIVISION

ITEM RESPONSE NO RESPONDENT PERSENTAGE

Attention give by Yes 18 90%
management for AIS
division
No 2 10%
Total 20 100%
Source: researchers own computation from questionnaire

As it’s shown on the above table 9(90%) of the respondents answered that there is ample
attention and support from management; & 2(10%) of respondent no attention by management.
This refer to the bank is giving proper attention for accounting information system because the
majorities respondent agree in that there high attention give by management.

TABLE 4.8 GARDWARE & SOFTWARE PACKAGE

ITEM RESPONSE NO OF RESPONDENT PERSANTAGE

Hard ware & software Yes 19 95%
package availability
No partly 1 5%
I don’t know
Total 20 100%
Source: researchers own computation from questionnaire

22
As it is clearly indicated in the above table 9(95%) of the respondent believe that there is cough
hard ware and software package, 1(5%) or respondent said that there is partly enough hardware
device and software package.

The hardware and software package are necessary things for effective & efficient activities of
providing accounting information system for company as well as customers giving them the true
information about the service they provide and financial statement so the bank has a good
hardware and software package in order to run the business.

THE ROLE OF AIS ON THE BANK

Information has a great role in every organization to provide a good service, to indentify the
position of company. To clarify this researcher collected information from respondent regarding
the role of information from respondent regarding the role of accounting information system
practice as to achieve established goal and objectives of the organization are as follows:

 Providing the necessary information of the bank

 It enables the bank to render quality and fast service and enhance customer
satisfaction.
 Properly know the profit & loss of the organization
 To know who’s is potential customer & mobilized customer base and customer
deposit
 To protect the bank fraudulent action
 It reduce work over load
 By qualifying the work and to simple all thing done by the using computer. S
 Provide a good information for timely follow up of the bank performance
 It has big role because every financial transaction is processed and analyzed by
AIS
 In the bank accounting information system is day activities of the bank

PROBLEMS RELATED TO ACCOUNTING INFORMATION SYSTEM IN BANK.

To observe there problem related to AIS in the bank researcher distribute the questionnaire to
identify the problems of AIS commercial bank of Ethiopia Gesuba branch.

23
Accounting to respondent’s response those problems relates to AIS in commercial bank of
Ethiopia as follows:

 Insufficient knowledge and lack of training

 Problems related with identify and properly using systems.
 Lack of awareness creation to the employee
 Sometimes may be information gap which is problems related AIS
 Broad band service quality is among major problem that there day to day activity

ONLINE CONNECTION NETWORKS WITH OTHER BRANCH

The research distributed questionnaires to respondent to know whether the bank is using online
connection to branch and the responses has been percentage as follows as per the respondent
almost90% of commercial bank of Ethiopia are online connected and the researcher asked the
advantage of using on line connection with other branch.

TABLRE 4.9, ADVANTAGES OF USING ONLINE CONNECTION.

ITEM RESPONSE NO OF RESPONDENT PERCENTAGE

Advantage of using Yes 18 90%
online connection
No 2 5%
I don’t know
Total 20 100%
Source: researchers own computation from questionnaire.

As indicated in the above table 19(90%) of the respondent responded that there is advantage of
using online connection: 2 (10%) of the respondent response that is no advantage of using online
connection with other branch using on line connection network connection system has more
advantage for the bank and customer. Some of the advantage is:

 Is simple the work at all

 It saves energy& time of the customer and employee
 It enables the bank to have clear and net performance of the operation

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  For customer it easy to manage his/her account from anywhere via to mobile
banking, internet banking or card banking system
 For employee is also easy to use the system
 For the bank it easily can have its report
 Minimize cost of supply (paper value) and increase profitability
 On line connected branch no work will be bank loaded every work will be
done with in time
 It makes operation go fast and smooth

OPERATION & IDEA REGARDING TO OVER ALL AIS

 The bank should on the service for local branch to redundancy & ambiguity
 Still it lack
 Very smart and world class bank by the year 2025
 The practical started two or three years ago so in future it will be very good
currently very satisfactory
 Recent AIS practice in CBE are the latest and updated technology in Ethiopia
 It play a great role in the business activity of the bank
 Although the bank use modem system software there are so many draw aback
within the bank and outside the bank
 In Gesuba branch so weak
 Good but need some modification
 By using electronic data processing information system to use any accounting or
bank operation & report at all

Accounting information system practice support companies long range objective the research
distributed questionnaire about the impact of AIS practice on bank long range plan and the
respondent as follows

TABLE 4.10 AIS IMPACT THE BANK LONG RANGE PLAN

Item Response No of respondent Percentage

25
 Impact of AIS ONS Yes 19 95%
on long range plan
No
I don’t know 1 5%
Total 20 100%
Source:- researchers own computation from questionnaire

As indicated the above table 8(85.71%)of the respondent response that AIS practice impact
(affect)the bank long range plan? No response say that AIS practices does no impact the bank
long range plan and 2(14.29%) of the respondent response that they don’t whether the bank is
impacted or not so this implies that the majorette of respondent stated that AIS affected the bank
long range plan.

TABLE 4.11 TYPES OF AIS

Item Response No of respondent Percentage

Type of IAS Computerized 20 100%

Total 20 100%
Source:- researchers own computation from questionnaire

Accounting information system is performance by manual which is using paper and pencil on the
traditional way and also performed by modernized technology which is called computerized and
there researcher tries to assess the kind of AIS practice the bank

Perform and respondent response as follow. As indicated table 10(100%) of respondent response
that the use computerized types accounting information.

TABLE 4.12 TYPES COMPUTERIZED-BASED INFORMATION SYSTEM

ITEM ACTIVES SELECTED TIMES

AIS 11
EDP 10
MIS 6
EN 2

26
 FMISUB 1
DSSY 1
EXPERT 0
EIS 0
TOTAL 32
Source:- researchers own computation from questionnaire

As indicated each above table it refer that AIS is selected 11 times by response and EDP is
selected 10 time MIS is selected 6 times, EN is selected 2 times functional miss sub 1 times and
decision support system is selected 1 timesss From the above discussion that the AIS is mostly
used by the bank next to the AIS, EDP is mostly used in meeting mandatory information
requirement the primary consideration is minimizing cost while meeting minimize standard
reliability and usefulness when the provision of information is discretionary, the primary
consideration is that benefit exceed the cost of production so using the sixth of the type of
computer based information system is effective for the bank

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 CHAPTER FIVE

CONCLUSION RECOMMENDATION

5.1 CONCLLUSION
Accounting information system is the most important tool to implement effective administration
system in the entire activities of a given organization. Its ultimate goal is to make the
administration of the organization more effective so as to improve the effectiveness of employee
and to provide routine and non- routine information which is used for decision making and also
to attract customers

Commercial bank of Ethiopian Gesuba branch the accounting information system practice is
good; in somewhat need to incorporated with other section, there are enough skilled and
qualified personnel and hard ware and software package; the attention given by management is
also good.

The problem identified I the analysis is that insufficient knowledge and lack of training problem
with identifying the properly using system information gap, and broad band service quality is
among the major problem that faces there day to day activities.

The bank use computerized type of information system it is one of the strongest side of the bank
because of using modernized technology.

The bank operate the sixth type of computer based information system from the eighth of type of
computer based information system, some employee do not know some of the type of computer
based information system the bank operated.

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5.2 RECOMMENDATION
Based on the discussion, analyzed, evaluation, interpretation, & conclusion the researcher tried to
indicate the following recommendation that can be possible solution identified problem.

 The bank should give the highest priorities for AIS practice in order to accelerated its
growth
 The AIS department should incorporate with other section, for the success of the bank
long rang objectives.
 It should decrease its problem with identifying and properly using system by giving
sufficient training and knowledge about the system for newly employed and existed
employee.
 By cooperating with Ethio telecom the bank should improve its broad band service
quality which is laced the bank day to activities.
 The type of computer based information system the bank operated should be known
by newly and existed employee so the bank should give orientation and training about
the operated computer based information system.
 And also should have to operate the other type of computer based information system
in order to meet its vision which is to become world class bank in 2025.
 The bank should have to update its system in order to be competent in world

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30
 APPENDIX
JIMMA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

Questionnaire

Dear respondents the objective this questionnaire is to get feedback on the topic assessment

accounting information practice in case of commercial bank of Ethiopia Gesuba branch this in

order to hold right valve and attain the desired objective of this research, you are chosen as

valuable source of information. Your genuine response will contribute a lot for the fruitful

completion of the study. In addition, I ascertain you that the information you provide will only be

for used for this research and be kept instruct confidentiality.

Instruction;

 Put a right mark on the box of your choice and answer on the space provided.

 Write on the space provided from open ended questions.

1. Personal information

1. Work experience one year two year three year above three year

2. Sex: female male

3 .Educational level: Diploma Degree Master Degree

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4. How do you rate the appropriateness of the position given to the Accounting information

system practice?

Excellent Very good Good Very poor

5. Do you think that additional section could be incorporated in the accounting information

system practice,(AIS) yes No I don’t know 6.Do you have relatively qualified

employee as to accumulation accounting information activity? Yes No

7. Does accounting information system has an impact on the bank long range plan? Yes No

I don’t know

8. What kind of accounting system does the bank use?

Computerized Manual

9. In question 8 if your answer is computerized, Give your

reason………………………………………………………………………………………………

……………………………………………………………………………………………………..

10. Which type of “computer-based” information system the banks perform?

Electronic data processing system

Management information system

Functional management subsystem

Electronic network

Executive information system

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 Accounting information system

Expert system

Decision support system

11. Does the bank is giving proper attention for accounting information system?

Yes No

12. Is hardware and software package are necessary things for effective and efficient activities of

providing accounting information system for company?

Yes No partly I don’t know

13. Do you think that is there advantage of using online connection?

Yes No I don’t know

14. In question 9 if your answer is yes list same of them

1 ……………………………………

2…………………………………..

15. What are the possible problems observed in CBE in Gesuba branch?
A. Daily in process
B. Data redundancy
C. Daily communication
D. In consistency

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 16. How do you rate the standard service provider in the bank through the aid of AIS over the
past years?
A. Have improved
B. Have deteriorated
C. Do not known
D. Have not changed
17. In what way does AIS contribute for the satisfaction of customers?
A. By keeping confidential data
B. Reducing time
C. Rendering fast service
D. Did not increase satisfaction of customers
Other specify…………………………………………….
18. In what way AIS add value to your bank? You can tick or circle more than
One choic
A. It improves quality and reducing the cost the product or service
B. It improves efficiency
C. It improves decision making
D. It improves the chain of communication
E. It adds all value stated above

34
 REFERENCES
Elizabeth H. (2008) business information system

Georg, H. willain (2000) accounting information system 8 Ed printce hall inc

James, H. (2008) accounting information system 6 Ed cengageinc

Marshal. B and Paul, J. (2003), accounting information system 9 Ed printce hall inc

Mosich A.N. (1964) intermediate accounting

PHIPS, Eand Fees, W. (1984,) principal accounting 16Ed

35