ST.

MARY’S UNIVERSTY
BUSINESS FACULTY

DEPARTMENT OF ACCOUNTING

ACCOUNTING INFORMATION SYSTEM AND ITS

IMPACT ON ADMINISTRATION; IN THE CASE OF

COMMERCIAL BANK OF ETHIOPIA

BY

GOSAWORK FIKADU

MUNA NEGASH

TSEGRDA SOLOMON

JUNE, 2014

ADDIS ABABA
 ACCOUNTING INFORMATION SYSTEM AND ITS

IMPACT ON ADMINISTRATION; IN THE CASE OF

COMMRCIAL BANK OF ETHIOPIA

BY

GOSAWORK FIKADU

MUNA NEGASH

TSEGRDA SOLOMON

A SENIOR ESSAY SUBMITTED TO THE DEPARTMENT OF

ACCOUNTINGIN PARTIAL FULLFILMENT OF THE
REQUIRMENTS FOR THE DEGREE OF BACHELOR OF ART
IN ACCONTING

JUNE, 2014

ADDIS ABABA
 ST. MARY’S UNIVERSTY

ACCOUNTING INFORMATION SYSTEM AND ITS IMPACT

ON ADMINISTRATION; IN THE CASE OFCOMMERCIAL
BANK OF ETHOPIA

BY

GOSAWORK FIKADU

MUNA NEGASH

TSEGRDA SOLOMON

Approved by the committee of examiners

______________________ __________________

Department head signature

______________________ __________________

Advisor signature

______________________ __________________

Examiner signature

______________________ __________________

External examiner signature

 Acknowledgments

At all stages of doing this, we dreamt of reaching the moment of writing that
acknowledgments not have become a reality without the invaluable support of
God and several individuals. Hence, we wish to present our appreciation to all
those who extended their support in many different ways.

We would firstly like to thank God for everything and we would like to express
our gratitude to our advisor Ato Gebregziabher Hagos for his patient guidance,
encouragement and excellent advice throughout this study. We are very
fortunate to be under his supervision, as he embraced every responsibility of a
principal supervisor to guide our research.

We are thankful to our friends for all their help, support and valuable
discussions up on doing this study. We would like to acknowledge staff
members in commercial Bank of Ethiopia, Hade office

Finally, our great appreciation and enormous thanks go to our parents strived
our success in all their life.

i
 Table of contents
PAGE
Acknowledgment ............................................................................................. i
Table of content ............................................................................................. ii
List of tables…………………………………………………………………………………..iv
Acronyms........................................................................................................ v
Abstract…………………………………………………………………………………………vi
I. INTRODUCTION
1.1 Background of the study ....................................................................... 1
1.2 Statement of the problem ..................................................................... 2
1.3 Research questions .............................................................................. 2
1.4 Objective of the study .......................................................................... 3
1.5 limitation of the study .......................................................................... 3
1.6 Significance of the study …………………………………………………...……..3
1.7 Scope/Delimitation of the study ………………………………………………...3
1.8 Research design and methodology ........................................................ 4
1.8.1 Research design ........................................................................... 4
1.8.2 Population and sampling technique ............................................. 4
1.8.3 Data types and source .................................................................. 4
1.8.4 Method of data collection .............................................................. 5
1.8.5 Data analysis methods ................................................................. 5

1.9 Organization of the study ...................................................................... 5

II. REVIEW OF RELATED LITERATURE ........................................................ 6

2.1 Theoretical reviews ................................................................................... 6

2.1.1 Information system .......................................................................... 6

2.1.2 Accounting information system ........................................................ 7

2.1.3 The role of AIS in banks ................................................................... 8

ii
 2.1.4 AIS and decision making ................................................................ 9

2.1.5 AIS and their effect on management ............................................... 11

2.2 Empirical Reviews .................................................................................. 14

III DATA ANALYSIS AND INTERPRETATION ............................................. 16

3.1 Case Presentation and analysis .............................................................. 16

3.1.1 Quaternaries Analysis .................................................................... 17

3.1.2 Analysis of Interview ....................................................................... 26

IV.SUMMERY, CONCLUSIONS AND RECOMMENDATION ....................... 27

4.1Summaery of Finding .............................................................................. 27

4.2 Conclusions ........................................................................................... 28

4.3 Recommendation ................................................................................... 29

References ................................................................................................... 30
Appendices

iii
 List of table

Table Page

Table 1: Background information of respondent ........................................... 17

Table 2: Accounting Information System problem existed in commercial

Bank of Ethiopia .............................................................................. 18

Table 3: Respondents attitude towards the awareness of CBE management

about the use and implementation of AIS ........................................ 19

Table 4:Respondents attitude towards the use of AIS for administrative

Decisions ........................................................................................ 20

Table 5: Respondents opinion about effect of AIS on the quality of decisions

of their organization........................................................................ 21

Table 6: Respondents answer for questions regarding the contribution of AIS

for the attainment of their organization objectives ........................... 21

Table7: Respondents attitude towards the role of AIS in CBE

Administration................................................................................ 22

Table 8: Respondents attitude towards the existence of knowledge gap

between different levels of management is CBE ............................... 23

Table 9: Respondents attitude towards the standard services provided

by AIS and its contribution in the administration process over the

past years .................................................................................... 23

Table 10: Respondents answer for questions regarding strategic positions and

AIS helpfulness in achieving this position ...................................... 24

Table 11: respondent opinion about the problem AIS in CBE ........................ 25

Table 12: problem existed implementing AIS in CBE .................................... 25

iv
 Acronyms

AIS- Accounting Information System

CBE- Commercial Bank of Ethiopia

ATM- Automated Teller Machine

IT- Information Technology

MIS- Management Information System

CATS – Customer Accountant and Transaction Service

TS- Trade Service

CSM- Customer Service Manager

CSO- Customer Service Officer

ICT -Information and Communication Technology

v
 Abstract

This study is focused on the Accounting information system and its impact on
administration of commercial bank of Ethiopia. The main objective of the research
is to examine the impact of AIS on the administrative quality of commercial bank
of Ethiopia. To fulfill this objective primary data were used. A primary data were
collected through questionnaires and interview. The major problems there is
knowledge gap on the use of AIS between different levels of management. To
overcome a problem identified a constructive recommendations would be made
CBE should check the information disperse in the company in order to minimize
the knowledge gap.

vi
 CHAPTER ONE

1. Introduction

1.1Background of the study

From time immemorial, Information has always played a prominent role

in human life but the emergence of social progress and the vigorous
development in science and technology has immeasurably increased the
role of information in every facet of human endeavor. The rapid
expansion of a mass of diversified information has born the term
information and elucidation of its most characteristic properties which
has led to principal changes in interpretation of the concept of
information (Agbolade ,2011,pp.20-45).

Accounting is the service function that seeks to provide the users with
quantitative information. On the other hand, Accounting Information
System (AIS) is an information system that designed to make the
accomplishment of accounting function possible. AIS processes data and
transactions to provide users with the information they need to plan,
control, and operate their businesses. An accounting information system
can be a manual system, or a computerized system using computers.
Regardless of type, AIS is designed to collect, enter, process, store, and
report data and information. (Romney, Marshall ,1997, PP.96-109).

Accounting Information System (AIS) as one of the most critical systems

in the organization has also changed its way of capturing, processing,
storing and distributing information. Nowadays, more and more digital
and on-line information is utilized in the accounting information
systems. Organizations need to take an action, which put such systems
at the forefront, and consider both the system and the human related
factors while managing their accounting information systems. In

1
managing an organization and implementing an internal control system,
the role of accounting information system (AIS) is crucial (Steinbart,
1997, PP.123-140). The objective was to examine the impact of AIS on
the quality of commercial bank of Ethiopia.

1.2 Statement of the Problem

The main purpose of accounting is to provide financial data that uses for
decision making. For instance, business executives and managers need
the financial information provided by accounting system to help them to
plan, to control and evaluate business operation. Outsiders such as
bankers, potential investors, labor unions and other also need
accounting information. [Plunkett: 1986, PP.34-48]

According to USAID, 2006 accounting information system is useful if it

has a potential for making administrative decision otherwise it misleads
the users idea and also that lead them to decide wrong decisions, and
that may be the cause for bankruptcy or loss of the organization. In
Ethiopia organization this problem is visible; they do not utilize AIS as
tool for the administration purpose. Therefore, this research tried to
show the role of AIS in administration purpose in case of CBE.

1.3 Research Question

This research has attempted to address the following questions

throughout the studies:

 Did CBE use AIS effectively for administrative decisions?

 What is the role of AIS in CBE administration?
 Dose a knowledge gap exists on the use of AIS between different
levels of management?
 Does CBE use AIS effectively to attain its objectives?

2
1.4 Objective of the Study

1.4.1 General Objectives

The general objective of this study was to examine the impact of AIS on
the administrative quality of commercial bank of Ethiopia.

1.4.2 Specific Objectives

The specific objectives of the research were to:

 To assess whether CBE is using AIS effectively for administrative

decisions.
 To analyze the role of AIS in CBE Administration
 To investigate whether knowledge gap exists on the use of AIS
between different levels of management.
 To analyze whether CBE use AIS effectively to attain its objectives

1.5 Limitation of the Study

During the study period the research was selected from CSO and CSM
from Finfina branch because it’s difficult to contact managers and
experts to get efficient information.

1.6 Significance of the Study

The study findings and recommendation are highly important to the
management of the institution (CBE). It draws their attention to the some
of the points were corrective actions should be taken. Furthermore it will
be used as an additional reference material.

1.7. Scope of the Study

The study has focused on the impact AIS on the administration of CBE.
Although the bank has many branches throughout the country the study

3
is restricted on Addis Ababa specifically head office. Beside the study
cannot visualize overall impact of AIS on the organization as whole it’s

mainly restricted on administration area. The time path of the research

was restricted on the fiscal year of 2012-2013/14

1.8. Research Design and Methodology

1.8.1 Research Design

A descriptive study was conducted to examine the impact of AIS on

administration of CBE. Quantitative and qualitative data were used to
conduct the research.

1.8.2 Population and Sampling Techniques

In conducting this research, the total population of the study was the
directors and experts of Management Information System (MIS),
Customer Accountant and Transaction Service (CATS), Trade Service (TS)
and credit sub-process of the bank at head office. Out of the total
population is 30 employees, 20 are taken for the study purpose. These
20 employees are selected from sub and support processes of the bank.
From the sub process 3 employees are selected from each section of
CATS, TS MIS, and CR. From the IT department 3 are selected and form
different level of positions at the bank (i.e Finfine branch) 1 managers
and also 2 employees from each Customer service Manager (CSM) and
Customer service officer (CSO) selected. Sample of 20 from 30 total
populations was selected based on personal judgement method in order
to minimize cost and time of the study. Interview was used to obtain
relevant data from different experts of sub process of the bank and IT
department of CBE that leads the researchers to gather relevant
information, which is not documented. It is also important to get detail
information that improves the quality of the study.

4
1.8.3. Data Types and Source

These study use primary data source were collected from distribution of
questionnaires and interviews.

1.8.4 Methods of data collection

From the various data collection instruments the researchers have used
questioners, interviews to gather relevant information to analyse the role
of AIS in administration in case of CBE.

1.8.5 Data analysis Methods

The data collected through questionnaire was analysed using descriptive

analysis techniques. Hence, such data are presented in tabulation,
charts, graphs percentage and description of the result from data
presentation and analysis.

1.9 Organization of the paper

The study comprised four chapters. The first chapter deals with the
introduction; this includes the background, statement of the problem,
objectives of the study, significance of the study, methodology scope and
limitations of the study. The second chapter describes the existing
relevant literature. The third chapter was focuses on data presentation
and analysis. The final chapter is about conclusion and recommendation
of the whole chapters.

5
 CHAPTER TWO

2. Literatures Review

2.1 Theoretical Review

2.1.1 Information systems

Information and Communication Technology (ICT) is the automation of

processes, controls, and information production using computers,
telecommunications, software’s and other gadget that ensure smooth and
efficient running of activities. It is a term that largely covers the coupling
of electronic technology for the information needs of a business at all
levels. ICT has surpassed the role of support services or only electronic
data processing; its fields of applications are slightly global and
unlimited. Its devices especially the Internet and modern computer email
facilities have further strengthened early modernizations like the
telephone and fax. Other ICT devices include data recognition equipment,
factory automation hardware and services, telecommuting and
teleconferences using real time and online system (Obasan Agbolade
2011, PP.59-80).

As information and communications technologies cover a wide range and

include all the areas in which a firm acts, this research work has focused
on a specific part of them, the accounting information systems (AIS) to
show that computerized accounting tools are directly related to the
economic and financial results and productivity in small and medium-
sized business organizations. AIS are systems used to record the
financial transactions of a business or organization. This system
combines the methodologies, controls and accounting techniques with
the technology of the IT industry: user interface, computers and
sophisticated software. The software used to track transactions provides

6
internal reporting data, external reporting data, financial statements,
and trend analysis capabilities (Obasan Agbolade, 2011, PP. 157-190).

2.1.2. Accounting Information System

Information system: An information system is a set of formal procedure
by which data are collected and processed into information and
distributed to user (Romney 1997, PP.205-220). Accounting information
system is a system that collects, records, stores, and processes data to
produce information for decision makers. It can use advanced technology
or be a simple paper-and- pencil system: or be something in between.
Accounting information system is a specialized subsystem of the
information system that collects, processes, and reports information
related to the financial aspects of business events (GeLinas, 2008, pp.8).
Accounting information system is a computer-based system that
increases the control and enhances the corporation inside the
organization (Essex, and Magal, 1998, pp.67).

Accounting Information System (AIS) as one of the most critical systems

in the organization has also changed its way of capturing, processing,
storing and distributing information. Nowadays, more and more digital
and on-line information is utilized in the accounting information
systems. Organizations need to take an action, which put such systems
at the forefront, and consider both the system and the human related
factors while managing their accounting information systems. In
managing an organization and implementing an internal control system,
the role of accounting information system (AIS) is crucial (Asse, 2007, PP.
153-175).

Accounting Information System the three words constitute AIS would be

elaborated separately. Firstly, literature documented that accounting
could be identified into three components, namely information system,
“language of business” and source of financial information (Wilkinson,

7
1993, pp. 40-60). Secondly, information is a valuable data processing that
provides a basis for making decisions, taking action and fulfilling legal
Obligation. Finally, system is an integrated entity, where the framework
is focused on a set of objectives (Bhatt, 2001, PP. 211-263; Thomas and
Kleiner, 1995, PP. 207-239)

2.1.3. The role of AIS in banks

Accounting information allows commercial banks to speculate upon

opportunity of attractive business in placements and resource attraction.
The role of accounting information in the banking activity is extremely
important in the orientation of bank management towards successful
strategies (Kabi, 2004, PP.301-354).

By exercising the main functions, consecrated by law, banks generate

extremely useful accounting information for both customers and bank
management. Users of bank accounting information are internal users
(bank clients and shareholders, employees in front office and bank office,
bank managers) and external users (client business partners, tax
authorities, insurance companies, other banks). Information Technology
is vital in banking today, it becomes imperative for banks to realize its
impact on operational performance in order to justify capital
investments. Information Technology affects the operations of
commercial banks in terms of effectiveness, efficiency, competitiveness,
customer base and globalization of the bank (Daniela, 2008, pp.99-120).

Information Technology led to increase customer satisfaction, improved

operational efficiency, reduced transaction time, better competitive edge,
reduced the running cost and ushered in swift response in service
delivery and many successful financial institutions have clearly
demonstrated that information systems and technologies can be a
powerful competitive weapon that can be used to capture market share,
improve customer service, reduce operating costs, and create new
8
products and services (Lederer and Mendelow, 1988, PP.59-86). Chief
executive Officers (CEO) and top managers often have an intuitive
understanding of the power and potential of IS, thus propelling many
companies and institutions to invest large sums of money in IS and IT.

2.1.4. AIS and Decision Making

The making of decision, as everyone knows from personal experience is a
burdensome task in most cases indecision is as disastrous as making a
wrong one, therefore a plan of action is indispensable. Management is
constantly confronted with the problem of alternative decision making
especially knowing that resources are relatively scarce and limited. It is
therefore pertinent that good accounting information be made available
for proper and accurate decision making, maximization of profitability
and optimal utilization of scarce resource (Wadia, 1966, PP.229-239).

Managers cannot ignore Information Systems because they play a critical

role in contemporary organization. The application of information and
communication technology concepts, techniques, policies and
implementation strategies to banking services has become a subject of
fundamental importance and concerns to all banks and indeed a
prerequisite for local and global competitiveness. ICT directly affects how
managers decide, how they plan and what products and services are
offered in the banking industry. It has continued to Change the way
banks and their corporate relationships are organized worldwide and the
variety of innovative devices available to enhance the speed and quality
of service delivery (Obasan, 2011, PP. 132-150).

Defines accounting information systems as systems that operate

functions of data gathering, processing, categorizing and reporting
financial events with the aim of providing relevant information for the
purpose of scorekeeping, attention directing and decision-making as
already noted accounting information is indispensable in the

9
management activities of any organization. It provides quantitative
information about economic entities. The information is primarily
financial in nature and intended to be useful in making economic
decisions (DeLone & McLean, 1992, pp.58-69).

Accounting information is needed not only by management in directing

the affairs of the co-operation but also by shareholders, who require
periodic financial statement in order to appraise management
performance and it is needed by government for efficient distribution and
use of the nation’s resources thus; it plays an important role in all
economic and social systems. It helps in checking irregularities and
misappropriations. Accounting information is the livewire of any
organization without which it is likely to remain static or in worse cases
die (Fess and Niswonger, 2010, pp. 4).

Accounting information is not only necessary for evaluation of the past

and keeping the present on course; it is useful in planning the future of
the enterprise. According to (Mbanefo, 1997, PP. 79-91), “this planning
we may conventionally call budget/budgeting targets, which give
meaning and direction to operations of the organization within a defined
period. At the end of the budget period the external results are compared
with budgeted performance and discrepancies (variance) are analyzed for
purposes of exposing the causes so as to prevent re-occurrence.

The effectiveness of an information system can be described through a

number of different perspectives (DeLone and McLean, 1992, PP.200-
260). Evaluation of an effective systems can be shown through the
output produced as required, increased productivity, improve
performance, and increased control over the decision related to the
information that is produced by the AIS. Thus, the information generated
expected can make the decision making process more effective. The
information delivered is easier to interpret and understand, as well as

10
that the dissemination of information to all functional departments could
be improved (Ugboma, 2004, PP.67-93). According to (Kim, 1988, PP.30-
69) the assessment of the effectiveness of AIS relies on the use of AIS as
perceived by the user regarding the quality of the information produced.
The quality of information depends on the reliability, report forms,
timeliness and relevance for the decision maker. (Nicolao, 2000, PP.154-
178) defined effectiveness of AIS as a decision, the decision system, the
management reporting, and the whether the budgeting systems meets
their needs in the coordination and the control of tasks.

(Sajady, 2008, PP.235-258) stated that the effectiveness of the AIS

depends also on the perception of the decision maker about the
usefulness of the information generated by the system. How the
information satisfies their needs about the operational processes,
managerial reporting, budgeting, and control of the organization. The
results of (Sajady, 2008, PP.89-107) indicated that the implementation of
AIS will lead to improvements in the process of decision making by
managers, internal control and financial reporting quality, and
facilitation of the transaction processing companies. Therefore in this
study, assessment of the effectiveness of the AIS is based on the user
perceptions about the usefulness of the information. Measurements were
performed by assessing user’s satisfaction for the quality of information,
including the form, content, and appearance.

2.1.5. AIS and their effect on Management

Accounting literature argues that strategic success is considered an
outcome of Accounting Information Systems (AIS) design (Smith, 1997,
PP.39-50). Several, studies have analyzed the role of AIS in strategic
management, examining the attributes of AIS under different strategic
priorities (Wadia,1966,PP.68-77).It has also been analyzing the effect on
performance of the interaction between certain types of strategies and
different design of AIS (e.g. different techniques and information).
11
The appropriate design of AIS supports business strategies in ways that
increasing the organizational performance (Chenhall, 2003, PP.78-89).
Increasing AIS investment will be the leverage for achieving a stronger,
more flexible corporate culture to face persistent changes in the
environment. Innovation is the incentive with which a virtuous circle will
be put in place, leading to better firm performance and a reduction in the
financial and organizational obstacles, while making it possible to access
capital markets. AIS are systems used to record the financial
transactions of a business or organization. This system combines the
methodologies, controls and accounting techniques with the technology
of the IT industry to track transactions provide internal reporting data,
external reporting data, financial statements, and trend analysis
capabilities to affect on organizational performance (Grande, Estebanez
and Colomina, 2011, PP.145-179).

In managing an organization and implementing an internal control

system the role of accounting information system (AIS) is crucial. An
important question in the field of accounting and management decision-
making concerns the fit of AIS with organizational requirements for
information communication and control (Nicolaou, 2000, PP.70-83).
Benefits of accounting information system can be evaluated by its
impacts on improvement of decision-making process, quality of
accounting information, performance evaluation, and internal controls
and facilitating company’s transactions (Sajady, Dastgir and Nejad,
2008, PP.123-163). Therefore, regarding the above five characteristics,
the effectiveness of AIS is highly important for all the organization
performance.

Performance management is a quick maturing business discipline.

Therefore, performance management has a key role to play in improving
the overall value of an organization. Control efficacy of financial

12
information reliability has affected operating performance (Downes and
Barclay, 2008, PP.321).

The main advantages of an optimal use of AIS in an organization are:

better adaptation to a changing environment, better management of
arm's length transactions and a high degree of competitiveness. There is
also a boost to the dynamic nature of firms with a greater flow of
information between different staff levels and the possibility of new
business on the network and improved external relationships for the
firm, mainly with foreign customers accessed through the firm’s web
(Grande, Estebanez and Colomina, 2011, PP.142-159).

Recently several studies have asserted that AIS plays a proactive role in
the strategy management, acting as a mechanism that enables
organizational strategy (Chenhall, 2003, PP.34-46; Gerdin and Greve,
2004, PP.97-123). Strategy has been examined using different typologies,
such as latter has been extensively used in management literature. In
the present study it is assumed that the organizational performance is a
function of the financial performance, performance management and the
AIS. Fitness will exist in the combination of strategy and AIS that
contribute to financial performance (Porter, 1985, PP.756 or Miles and
Snow, 1978, PP.71).

Appropriate review between designing of AIS and performance of

commercial units by analyzing strategies explains that high performance
of commercial units depends on a wide range of accounting information
systems, so many studies begun to examine whether organizations
systematically vary the AIS design to support their chosen strategy,
recognizing that AIS have the potential to facilitate strategy management
and enhance organizational performance (Gerdin and Greve, 2004,
pp.43-68).

13
Management compares information about current performance to
budgets, forecasts, prior periods, or other bench marks to measure the
extent to which goals and objectives are being achieved and to identify
unexpected results or unusual conditions that require follow-up. In the
same way that managers are primarily responsible for identifying the
financial and compliance risks for their operations, they also have line
responsibility for designing, implementing and monitoring their internal
control system (www.ucop.edu). Internal controls typically center around
the company’s accounting information system, which is the primary
function for moving financial information through a company. Therefore,
internal controls help managers to monitor and measure the
effectiveness of their accounting operations on performance (Vitez, 2010,
pp.86-98).

Accounting systems are often the most important formal sources of

information in industrial organizations. They are designed to provide all
levels of management with timely and reasonably accurate information to
effect on performance management and help them make decisions which
are in agreement with their organization’s goals performance is one of the
most important constructs in management research (Richard, Devinney
and Yip, 2008,pp.203-234).

2.2 Empirical Review

By using ANOVA (Analysis of Variance) in 2012; Margaret by using

distributing a questionnaire to the sample of employee of 1522 concluded
that proper use of Accounting Information helps the management in the
making efficient and effective decisions in a business organization
(Nnenac, 2012, pp .34-40).

Esters( 2009 ), hare found that there is no difference in the perception

of the managers of various department in terms of the benefit of AIS
implementation ; ( Esters ,2009 , pp. 122-35). By using to statistics test
14
and P value By using econometrics approach throng different test is can
be concluded that the effectiveness of the decision making is influenced
by the accounting Information system .The more extensive use of AIS
influence the quality of the decision making. This means that the quality
of the AIS will fated the effectives of the decision making in the managers
tasks (www.iiste.org)

Peretet, (2011),by using Analysis is found that SMES(small scale

industry )which use AIS for their bank and fiscal management there was
a significant relationship with the performance indicators based on ROA(
return on asset) and ROE( return on equity )SNES which using AIS for
bank management have higher profitability than those lot using it.

15
 CHAPTER THREE

3. Data presentation and Analysis

3.1Case Presentation and analysis

Introduction

This chapter deals with the brief description of CBE AIS Contribution in
the effective administration of the organization. Data analysis and
interpretation is also included in this chapter. The analysis based on
data collected from documents of CBE and from primary data collected
by questionnaires and by holding interviews with staff at various
management levels whose day to day activates mainly concerned with
accounting information system and uses it directly in the management
activity so that conclusion could be drawn based on the findings.

Questionnaires were distributed to 20 employees of CBE who have direct

work relationship with management completed and submitted the
questionnaires. Thus, the methods used to collect the data have enabled
to get reliable information about the research.

16
3.1.1 Quaternaries Analysis

Table 1: Background information of the respondents

Response Respondents
1.Educational background No %
Diploma 3 15
BA Degree 13 65
Above BA Degree 4 20
Total 20 100%
2. How long have you been Service year No %
commercial bank of 1-2 Year 8 40
Ethiopia? 3 Years and 12 60
above
Total 20 100%
3.Current position Sub- process No %
CATS 3 15
TS 3 15
Credit process 3 15
Position
Manager 1 5
CSM 2 10
CSO 2 10
Department
IT 3 15
MIS 3 15
Total 20 100%
Source, primary data, 2014

The educational background distributions of the respondents show that

most of them have educational qualification of BA degree and some of
them are above degree holders and diploma.
17
The sub-process shared by respondents constitutes 15% of CATS, 15% of
TS, 10% of credit process and 15% of MIS. From position 5% of manager,
10% of CSM and 10% of CSO. In the department respondents constitute
15% of IT department. This has an advantage to the research in that it is
mainly sub-process who involved in the use of AIS in the routine activity
of CBE. As far as the distribution of service year of the respondents is
concerned, most of the respondents stayed in the organization for 3 years
and above and a little less of that also stayed for 1-2 years

Table 2: Respondents answer the question Accounting Information

System problem existed in commercial bank of Ethiopia

Q4. Is there Accounting Respondents

Information System problem Response No %
existed in commercial bank of Yes 5 25
Ethiopia? No 13 65
Don’t know 2 10
Total 20 100
Source, primary data, 2014

The majority of the respondent does not agree in the AIS problem existed
in CBE and 25% of respondent agree in the AIS problem existed in CBE.
It shows that some of the respondents believe that there is AIS problem
existed in CBE, while most of them agree that there no AIS problem In
CBE. So we can say that currently CBE implementing its AIS with a little
problem.

18
Table 3: Respondent’s attitude towards the awareness of CBE
management about the use and implementation of AIS

Q5. How is the awareness of Respondents

CBE management about the Response No %
use and implementation of Very strong 9 45
accounting information Strong 6 30
system? Medium 4 20
Low 1 5
No opinion 0 0
Total 20 100
Source, primary data, 2014

45% of respondents very strongly agree about awareness in AIS usage

and implementation. 30%of them strongly aware AIS in usage and
implementation and the rest 20% of them have medium awareness of AIS
in usage and implementation on the awareness 5% of them have low
aware implementation AIS usage and This might be result from the
awareness of the respondent is high on the implementation of AIS.

19
Table 4: Respondents’ attitude towards the use of AIS for
administrative decisions

Q6. Do you believe that Respondents

accounting information Response No %
system is used by CBE Strongly agree 10 50
effectively for Agree 8 40
administrative Disagree 0 0
decisions? Strongly disagree 0 0
Don’t know 2 10
Total 20 100%
Q7. How helpful has Very much 16 80
AIS to your business in helpful
administrative Helpful 4 20
decision? Not helpful 0 0
No opinion 0 0
Total 20 100%
Source, primary data, 2014

As it can be seen from the table, 50% of the respondents strongly agree
on the use of AIS for effective administrative decisions and 40% of them
simply agree. When we come to the extent of helpfulness 80% of the
respondents replied that AIS is very much helpful for administrative
decisions and operational decision to their business and the rest 20% of
them agree on the helpfulness slightly. So this shows that AIS has great
role in administrative decisions.

20
Table 5: Respondents opinion about the effect of AIS on the quality
of decisions of their organization

Q8. In your opinion, how Respondents

do you evaluate the effect Questions No %
of accounting information Increases the Quality 18 90
system on the quality of Decreases the quality 0 0
decision of your No change in its quality 2 10
organization? Not sure 0 0
Total 20 100
Source, primary data, 2014

The majority of the respondents, to the extent of 90% confirmed that AIS
increased the quality of decision and 10% of the respondents replied that
no change in its quality. This indicates that AIS has big role increasing
the quality of decision. But it differs in its performance of AIS; if there is
good AIS system there is good quality of decision and vice versa.

Table 6: Respondents answer for question regarding the

contribution of AIS for the attainment of their organization
objectives.

Q9: Does accounting Respondents

information system Responses No %
contribute for the Yes 20 100
attainment of your No 0 0
organization objectives? Don’t know 0 0
Total 20 100
Source, primary data, 2014

All of the respondents confirm that the contribution of AIS for attainment
of organization objectives. Therefore we may say, AIS is one of essential
component of organizations in order to achieve organizational objectives.

21
Table 7: Respondents attitude towards the role of AIS in CBE
administration

Q10. What is the role of Respondents

accounting information Responses No %
system in CBE Improved decision making 1 5
administration? Improved management 1 5
reporting
In sharing of knowledge 1 5
Improved transactions 1 5
processing
Improved decision making 1 5
and efficiency
Improved decision 1 5
making, management
reporting and
transactions processing
In all 14 70
Total 20 100%
Source, primary data, 2014

As the table depicts, 70% of the respondents said that the role of AIS in
the CBE administration is in all aspect such as in decision making,
management reporting, sharing knowledge, efficiency and transaction
processing. So that we can perceive from this, AIS have a big role in
administration of one organization.

22
Table 8: Respondents attitude towards the existence of knowledge
gap between different levels of management is CBE.

Q11. Does knowledge gap Respondents

exist between different levels Responses No %
of management is CBE? Yes 11 55
No 3 15
Don’t know 6 30
Total 20 100
Source, primary data, 2014

The majority of the respondents confirm that there is knowledge gap

between different levels of management and 15% of the respondents do
not agree in the existence. Therefore it a shows a knowledge gap
existence between different levels of management of the organization.

Table 9: Respondent’s attitude towards the standard services

provided by AIS and its contribution in the administration

Q12. How do you rate Respondents

the standard services Responses No %
provided by AIS over Have improved 10 50
the past years? Have improved a little 6 30
Have deteriorated 1 5
Have not changed 0 0
Do not know 3 15
Total 20 100%
Source, primary data, 2014

50% of the respondents know the standard services provided by

accounting information system have shown improvement and 30% of the
respondents understand that the contribution made by AIS over the last
years have little improved. From the above table 9 the roles of AIS in

23
providing the standard services are showing improvement from time to
time. As assistance of AIS in decision making is now widely spread, it
also helps the management of CBE in order to increase income, efficiency
effectiveness and enabling frequent data processing for its decision
making strategy.

Table 10: Respondents answer for questions regarding strategic

positions and AIS helpfulness in achieving this position

Q13. What strategy Responses Respondents

positions is CBE No %
Bank Pursuing? Varity based 14 70
A need based 6 30
An access based 0 0
Total 20 100%

Q14. How helpful has Very much helpful 15 75

accounting Helpful 3 15
information system to Not helpful 0 0
achieve this position?
No opinion 2 10

Total 20 100%

Source, primary data, 2014

From the above table10, 70% of the respondents said that the
organizations management is pursuing a variety based strategic position
and 30% answered that the management of CBE is following a need
based. As it can be observed the majority of the respondents replied the
management of CBE is pursuing a variety based strategic position. A
variety based strategic position involves producing subsets of the
industry’s products or services. Here it should be beard in mind that
CBE is offering multi-channel banking that is, providing via an
ATM,(Automated teller machine) From the second question table -10,
24
above 75% of the respondents replied that the AIS play an essential role
in helping for achievement of the strategic position. So that AIS is crucial
for the achievement of strategic position of an organization.
Table 11: Respondent opinion about the problem AIS in CBE.

Q15, if there is a problem, Respondents

what is AIS problem Responses No %
existed in CBE? Delay in process 0 0
Data redundancy 0 0
Delay in 2 40
communication
Inconsistency 0 0

Misunderstand 3 60

Total 5 100
Source, primary data, 2014

The majority of the respondent confirms that there is misunderstanding

by using AIS and 40% the problem exist by delay in communication.
Therefore it shows the problems existed by misunderstanding.
Table 12: Respondent answers for questions problem existed
implementing AIS in CBE.
Q16.Is there any problem Respondents
existed in implementing Reponses No %
accounting information Yes 1 16.67
system in CBE? No 5 83.33
Don’t know 0 0
Total 6 100
Source, primary data, 2014

The majority of respondent there is no problem exist in implementing

accounting information system in CBE and 16.67% the problem existed

25
implementing accounting information system. Therefore, it shows that a
little problem exist in implementing accounting information system in
CBE.

3.1.2 Analysis of Interview

In order to aid the research, the information was gathered by the way of
interview from CBE staff. The following conclusions are essential points
that gathered through the interview

1. The Component parts of CBE AIS. The main component parts of

CBE AIS is flexible software under this software we can find CSO(
where cheeks and deposits are withdrawn) accounts report,
accounts checking and accounts audit. There are benefits of
flexible software such as:
 Sustain growth and ensure continuous improvement
 Achieve a rapid return on investment, usability and
ownership
 Reduce the cost and time of implementation with reusable
methodologies, standards, and best practices
2. The main inputs of AIS CBE is transactions such as: Foreign
transactions, ATM transactions, purchase, Deposit, withdrawals,
Salary payment, Maintenance, Closing entry
3. Working integrated using AIS. In the CBE all related departments
work integrated using one IT server which
every organization information settled and also all departments are
networked with IT, so the possibility for misunderstanding is less.

26
 CHAPTER FOURE

4. Summary, Conclusion and Recommendation

From the research finding carried and from the respondents answer and
data analyses from chapter three the following summary of finding,
conclusions and recommendation are forwarded by taking the objective
of the research under consideration.

4.1 Summary of Finding

Based on the analysis and discussion made in chapter three the

following summary can be drawn;

 Most of the respondents agree that there is a little AIS problem

existed in CBE.
 Above 75% of respondents towards use and implementation of AIS
in CBE is high.
 90% of the respondent believes that AIS used by CBE is effectively
utilized for administrative decisions.
 Most of the respondents are aware of AIS have a power to enhance
quality decisions making to management of CBE.
 Regarding the contribution of AIS to the attainment of
organizational goals and objectives the answer of all the
respondents is unanimous.
 70% of the respondents said that the role of AIS in the CBE
administration is in all aspect such as in decision making,
management reporting, sharing knowledge, efficiency and
transaction processing.
 Only 15% of the respondent do not agrees the existence of
knowledge gap between different levels of management.

27
  For the standard service provided by AIS and its role in the
administration on previous years, 50% of the respondents agree
that it has improved over the past years.
 Majority of respondents replied that AIS is helpful for securing
variety based strategic positions in CBE.
 The opinion of respondents on the AIS problem show that 75%
agree that there is no AIS problem in CBE and the rest of them
agreed a problem existed because of misunderstanding and delay
in communication.
 Majority of the respondents agreed there is no AIS problem in
implementation.

4.2 Conclusions

 AIS have one of essential component of organization in order to

achieve organizational objective, in our case commercial bank of
Ethiopia use AIS effectively to meet its objectives.
 In our case, there is knowledge gap on the use of AIS between
different levels of management.
 The quality of decision in organizations is highly affected by AIS
which in turn affect the administration. In our case, AIS increased
the quality of decision.
 Regarding the roles of accounting information system in providing
the standard serves are showing improvement from time to time.
 AIS have great role in administration decision. In our case, AIS is
helpful for administrative and operational decision.
 Regarding to accounting information system problem existed in
commercial bank of Ethiopia. In our case there is problem existed
by misunderstanding about the system.
 Accounting information system is crucial for the achievement of
strategic position of an organization.

28
  About Commercial bank of Ethiopia profit is increase, this
probably results from effective administration decision.

4.2 Recommendations

Based on the findings, in order to avoid or possibly reduce the problem

existing in accounting information system and its impact on
administration some recommendation can be suggested like;

 CBE should check the information disperse in the company in

order to minimize the knowledge gap.
 To increase the awareness of the management about AIS, CBE
should provide training and technical support.
 In order to provide good quality of decision CBE should increase
the performance of AIS. For example by introducing latest AIS
software.
 CBE should update and revise its AIS in order to be competitive in
the sector.

29
 References

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31
 Annex 1
ST.MARY’S UNIVERSITY
DEPARTMENT OF ACCOUNTING

QUESTIONNAIRE FOR MANAGERS AND EMPLOYEES OF CBE.

The purpose of this questionnaire is exclusively for academic purpose
which is intended to obtain relevant information for Accounting
information system and its impact on administration. The findings of this
study shall greatly depend on your cooperation for which we are
grateful in advance. To achieve this you are kindly requested to co-
operate by giving responses for the following questions. Please put a tick
mark (P) on the box of your choice and fill the blank spaces where
applicable.
Questionnaire

1. Educational backgrounds

Diploma BA degree
MA degree Other, please specify

2. How long have you been Commercial Bank of Ethiopia?

1-2 years 3 years and above

3. Current positions……………………………………..

4. Is there accounting information system problem existed in Commercial

Bank of Ethiopia?

Yes No I don’t know

5. How is the awareness of Commercial Bank of Ethiopia management

about the use and implementation of accounting information system?

Very strong Strong Medium

a
 Low No opinion

6. Do you believe that accounting information system is used by

Commercial Bank of Ethiopia effectively for administrative decisions?

Strongly agree agree disagree

Strongly disagree don’t know

7. How helpful has accounting information system to your departments

in administrative decisions?

Very much helpful helpful

not helpful No opinion

8. In your opinion, how do you evaluate the effect of Accounting

Information System on the quality of decision of your organization?

Increased the quality not change its quality

Decreased the quality not sure

9. Dose accounting information systems contribute for the attainment of

your organization objectives?

Yes No don’t know

10. What is the role of accounting information system in Commercial

Bank of Ethiopia administration?

Improved decision making improved efficiency

Improved management reporting improved transaction Processing

In sharing of knowledge in all the above

Other, please specify

b
11. Dose knowledge gap exist between deferent levels of management in
Commercial Bank of Ethiopia?

Yes No don’t know

12. How do you rate the standard service provided by accounting

information system over the past years

Have improved Have improved a little

Have not changed Have deteriorated

Do not know

13. What strategic position in Commercial Bank of Ethiopia pursuing?

A variety based A need based

An access based

14. How helpful has Accounting Information System to achieve this

position?

Very much helpful helpful

Not helpful no opinion

15. If there is a problem, what is accounting information system

problems existed in Commercial Bank of Ethiopia?

Delay in process Delay in communication

Misunderstanding Data redundancy

Inconsistency other, please specify

c
16. is there any problem existed in implementing accounting information
system in Commercial Bank of Ethiopia?

Yes No I don’t know

17. If you have any other comment…………………………………

d
 Annex 2

Interview

1 What are the component parts of CBE Accounting Information system?

2 Did Accounting information system help strength your business skills

in the last years? Yes/NO

3 Are all related department of the organization work integrated using

Accounting Information System?

4 what benefit you get from the use of AIS? In case of record keeping,
decision making and performance evaluation etc?

5 Has AIS been a source of conflict during the last years? Yes/NO if yes
explain.

6 Did AIS help your organization in achieving its goals? Yes/No

7 Did AIS help your organization for administrative decision? Yes/No if

yes in what way

8 Has AIS been a source of new anxieties during the last years? Yes/No

9 Does in general AIS have effect or impact on the management or

administration of your organization? If yes, please describe.

10 If you have any other comment?

e
f