ALKAN HEALTH SCIENCE BUSINESS AND TECHNOLOGY

COLLEGE

FACULTY OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

ASSESMENT OF ACCOUNTING AND REPORTING
PRACTICES OF BUNNA INTERNATIONAL BANK IN THE
CASE OF BAHIRDAR BRANCH

RESEARCH PROPOSAL SUBMITTED IN PARTIAL FULFILMENT OF

THE REQUIREMENT OF BA DEGREE IN ACCOUNTING AND
FINANCE

BY:
1. HABTEWOLD ALEMNEW..............................................................48/13

2. HIWOT NEBERE..............................................................................60/13

3. SAMRAWIT DELELEGN...............................................................86/13

4. WOYNESHET AYAL.......................................................................109/13

5. YESH TADESE...............................................................................110/13

ADVISOR: ZEWDU (M.Sc.)

JULY 2016 E.C
BAHIRDAR, ETHIOPIA
 ACKNOWLEDGEMENT
Even if there were no equivalent words to express thanks to GOD first we would like to
Thanks almighty GOD and the interception of his mother that made us still alive and in
Helping and leading us in every microsecond of our life. Besides our heart full
Appreciation and special thanks goes to our family in the way they helping us moral and
Finance. The successful achievement of every work requires a well built and insight advice.
Therefore we would like to express our sincerely gratitude to our advisor, ZEWDU (M.Sc.).

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 Abstract
This study will aim to asses accounting and reporting practice of Bunna International bank
in the case of Bahirdar branch. Accounting and reporting practice of the organizations
affected by different problems some of the organizations do not apply those principles and
fail to prepare reliable and relevant financial statement. The main objective of this study
is to examining the basic accounting and financial reporting principles of the organization.
To achieve this objective, both primary and secondary data sources will use. Questionnaire
will an instrument for the primary data collection. This study is descriptive based on
frequency tables and data will collect through questionnaire and interviews. A total of 50
questionnaires will distribute to the employees in the concerned of Bunna International
bank employee’s means 100% of them filled the questionnaire and returned. Though by
using census that is a complete representation of the elements of population. Primary data
will obtain by using observation, by destructing self-administered questionnaires, by face
to face interviewing. Whereas secondary data will obtain from different reference books,
research papers, company record, journals, magazines and different websites. The
collected data will analyze, process and interpret by using numbers and percentages.

Key words: Accounting, reporting practice, IFRS.

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 Tables of Contents
ACKNOWLEDGEMENT................................................................................................................. I
Abstract .............................................................................................................................................. II
Tables of Contents ............................................................................................................................ III
1. INTRODUCTION ........................................................................................................................ 1
1.1 Background of the study ............................................................................................................ 1
1.2 Statement of the problem ........................................................................................................... 2
1.3 Objectives of the study................................................................................................................ 3
1.3.1 General objective ................................................................................................................... 3
1.3.2 Specific objectives ................................................................................................................. 3
1.5 Significance of the study ............................................................................................................. 4
1.6 Scope of the study ........................................................................................................................ 4
1.7 Organization of the paper .............................................................................................................. 4
CHAPTER TWO .................................................................................................................................. 6
2. REVIEW OF LITERATURES ........................................................................................................ 6
2.1. Theoretical review...................................................................................................................... 6
2.1.1 Definition of Accounting ....................................................................................................... 6
2.1.2 Financial Accounting ........................................................................................................... 7
2.1.3 Objectives of financial reporting ........................................................................................ 7
2.1.4 Fundamental accounting practices concepts and their relevance ........................................... 8
2.1.4.1 Consistency concept ........................................................................................................... 8
2.1.4.2 The prudence concept ......................................................................................................... 8
2.1.4.3 Depreciation ....................................................................................................................... 8
2.1.4.4 The going concern principle............................................................................................... 9
2.1.4.5 Realization of revenue ........................................................................................................ 9
2.1.4.6 Disclosure ........................................................................................................................... 9
2.1.4.7 Accrual concept .................................................................................................................. 9
2.1.5 Types of Accounting Practices ................................................................................................ 9
2.1.5.1 Purchasing system .............................................................................................................. 9
2.1.5.3 Payroll system ................................................................................................................... 10
2.1.5.4 Accounts receivable system .............................................................................................. 10
2.1.5.5 Accounts payable system ................................................................................................ 11
2.1.6 Accounting practices procedures and their effectiveness ................................................... 12
2.1.6.1 Effectiveness of accounting practice ................................................................................ 12

III
 2.2 Empirical literature review ........................................................................................................ 13
2.3 Research gap ............................................................................................................................. 14
CHAPTER THRE ............................................................................................................................... 15
RESEARCH DESIGN AND METHODOLOGY............................................................................. 15
3.1 Research design ......................................................................................................................... 15
3.3Target population ...................................................................................................................... 15
3.4 Sampling method ...................................................................................................................... 15
3.5 Source of data ............................................................................................................................ 15
3.6 Method of data collection ......................................................................................................... 15
3.7 Method of data analysis ............................................................................................................ 16
3.8 Work plan and budget break down ........................................................................................... 16
3.8.1 Time breakdown .................................................................................................................. 16
3.8.2. Budget breakdown ............................................................................................................ 17
Reference ......................................................................................................................................... 18
APPENDIX...................................................................................................................................... 20
.......................................................................................................................................................... 20

ACCRONYMS

IV
GAAP.................................General accepted accounting principles

IFRS.................................... International Financial reporting Standard

IAS .......................................................International Accounting Standard

NGO.......................................................Nongovernmental Organization

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 CHAPTER ONE

1. INTRODUCTION
This study will aim to assess accounting and reporting practice of Bunna International bank in the
case of Bahirdar branch.
Accounting and reporting practice of the organizations affected by different problems some of the
organizations do not apply those principles and fail to prepare reliable and relevant financial
statement.
The main objective of this study is to examining the basic accounting and financial reporting
principles of the organization.

1.1 Background of the study

Accounting is the process of identifying, recording, classifying, interpreting and communicating
economic events to permit users to make informed decisions (American accounting association,
1996). Accounting is the method and procedural for analyzing, collecting, recording, classifying,
summarizing and reporting a business and operating information. In addition it also defined as an
information system that provides reports to stock holders about economic activities and conditions
of a business (Fees and Warren, 1999).

The purpose of accounting is to provide financial information about an entity. These accounting
information is required by the activity of the organization and also has many users including
customers, employees, creditors, supplier, shareholders, governments, local community and the
general public(Marshal B. Rommey,2000).

Accounting practice concerns financial management practice, financial accounting practice and
cost management practice. Financial management practice is made of fixed asset, capital structure
management, financial planning, working capital management, receivable management, inventory
management, cash management, financial reporting and accounting information system. However,
financial management is concerned with all areas of management which involve finance not only
sources, and use of finance in enterprises but also the financial implication of investment
production marketing or personal decisions and the total performance of the
enterprise(Meredith,2003).

Initially accounting practices were directed towards the needs of information of the shareholders
and the creditors. According to SFAC No. 1, now the potential users of the accounting reports are

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owners, lenders, suppliers, potential investors and creditors, employees, management, directors,
customers, financial analysts and advisors, brokers, underwriters, stock exchanges, lawyers,
economists, taxing authorities, regulatory authorities, legislators, financial press and reporting
agencies, labor unions, trade associations, business researchers, teachers, students and public (Hye
& Rahman, 2001). Accounting is an important way of presenting the reality of an organization.
But the presentation or practices of accounting differ from country to country and organization to
organization due to educational, sociological, economic, political, legal, technological factors and
organizational typology (Hye, 2004). In business organization, the accounting practices are
influenced by its profit motive while in the non-profit organization the same is affected by its
service orientation (Hossain & Rashid, 1992). Ideological differences may also influence
accounting practices (Hossain 2012) stated that it is quite natural that the financial statements of
Bunna International Bank will be different from conventional banks.

Generally accounting and reporting practice is the system of procedures and controls that an
accounting department uses to create and record a business transaction and also to report financial
information to the owners of the business and end users. Though it is a most important procedure
to the users of financial information by providing the current position of the organization for
lenders and borrowers through preparing accurate, relevant and reliable financial statement to
owners, government, tax authorities and share holders

1.2 Statement of the problem

Accounting and reporting practice is very important to assess information for different function.
In order to provide this information Organizations prepared different types of financial reports and
practice that shows the operation and position of the business. And although it is method and
procedural for collecting, classifying, summarizing, and reporting a business financial and
operating information. In addition it also defined as an information system that provides report to
stock holders about economic activities and condition at business. Though purpose of accounting
and reporting practice is to provide financial information about an economic entity and is
performed by professionals who prepare reports using generally accepted accounting principles
that make use of information taken from financial statements and other reports.

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However, accounting and reporting practice of the organizations affected by different problems.
According to Birhan Admas (2012), nongovernmental organizations(NGO's) suffered by the
problem of poor accounting and reporting practice, in his research conduct some of them were,
poor accounting and reporting practice leads to fail to plan, results to poor performance and leads
to poor controlling system.

According to Solomon Beyene (2012) that was tried to assess the accounting and reporting practice
of Aksum University. Failing to prepare reliable and relevant financial statement, fail to prepare
study an attempt to assess the accounting and reporting practices of this nongovernmental
institution, poor internal control, and lack of employees were problems that was stated by the
researcher as problem statement.

However, some of the organizations do not apply those principles and fail to prepare reliable and
relevant financial statement. They fail to prepare study is an attempt to assess the accounting and
reporting practices of Nongovernmental (private) organization as a case. In addition, it tries to see
different principles and conditions applied for accounting of higher education. The main objective
of this study is to examining the basic accounting and financial reporting principles of the
organization and the gap study will focus on accounting and reporting practice and International
Financial reporting Standard (IFRS). Lastly, the financial statements that should be prepared by
the organization are taken in to account.

1.3 Objectives of the study

1.3.1 General objective

The general objective of the study will to assess and examine the accounting and reporting
practices of Bunna International bank.

1.3.2 Specific objectives

 To examine the basic accounting and financial reporting principles of the organization.
 To evaluate financial statement report that are preparing in the organization.

 To evaluate the accuracy and timeliness of the organization financial reports.

 To check whether the organization is keeping proper accounting records

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1.4 Research Questions

This study will try to answer questions concerning the accounting and reporting practice of
Bunna International Bank to achieve the stated objective of the enterprises.

 Does the Organization apply accounting principles and procedures in their working
environment?
 What kind of financial statement reporting is prepared by the organization?
 Does the organization prepare accurate and timely financial report?
 Is the organization keeping proper accounting records?

1.5 Significance of the study

This study will be expected to benefit business organizations in many aspects

 It enables the management of an organization to employ professional accountants who

prepare relevant financial statements for external and internal users to make decision.
 It also enables the accountant to realize the significance of adhering to accounting
principles and conventions in the quest to prepare reliable financial statement.
 It also serves as a reference regarding the accounting and reporting practices of
Organization.
 It is used to guide for other similar institutions to develop the accounting and reporting
system. In addition, it may help other researchers who want to conduct a research on
similar topics or area.

1.6 Scope of the study

This study will cover accounting and reporting practices in Bunna International Bank. The
researcher will emphasize on how accounting and reporting is applicable in to practice of the bank.

1.7 Organization of the paper

The research paper will contain five chapters. The first chapter consist back ground of the study,
background of the organization, research problem, objective, significance, scope and limitation of
the study and Organization of the paper. Chapter two deal with all related documents about
accounting and reporting practice. The third chapter presents generally about research
methodology and particularly research design, target population, data type and sources, and

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method of data analysis. The fourth chapter presents about data analysis and interpretation and the
last chapter would contain summary of findings, conclusions, and recommendation of the study.

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 CHAPTER TWO

2. REVIEW OF LITERATURES
2.1. Theoretical review

2.1.1 Definition of Accounting

Accounting plays an important role in our economic and social system sound decision made by
individuals, business, governments and other entities are essential for the efficient distribution and
use of the nation scarce resources. To make such decisions, the group must have reliable
information provided by the accounting system. The objective of accounting, therefore, recorded,
summarized, report and interpret economic date for use by many group within our economic and
social system (fees and warren, 1999).

According to Smith and Ashburn, (2001) accounting is the science of recording and classifying
business transactions and events primarily of financial character and the art of making significant
summaries, analysis and interpretations these transactions, events and communicating results to
person who must take decision or form judgments. It is the art of recording, classifying and
summarizing in a significant manner and in terms of money, transactions and events, which are
in part at least of a financial character and interpreting result thereof. Nearly every business
enterprise has accounting system. It is a means of collecting, summarizing, analyzing and
reporting in monetary terms, information’s about business (R.N Anthony).

The purpose of accounting, according to Mielg and F, mielg (1987) is to provide financial
information about an economic entity. This accounting information, which is called financial
information provided by the accounting system, is required by the activity of the organization.
Accounting information has many users including customers, employees, shareholders, creditors,
suppliers, government, local community and the general public.

Accounting practices are the major quantitative information system in almost every organization.
They should provide information for three broad purposes, internal reporting to managers for use
in planning and controlling routine operation, internal reporting to managers for use in making
routine decisions formulating major plans and policies and external reporting to stake holders,

6
 government and other outside parties for use in investment decision, income tax collection and a
variety of other application (Horngren, 2003).
2.1.2 Financial Accounting

Financial accounting is the process that culminates in the preparation of financial reports on the
enterprise for use by both internal and external parties. Users of these financial reports include
investors, creditors, managers, unions, and government agencies (Kieso, et al 2012: 1549).

Financial accounting is the process of systematic recording of the business transactions in the
various books of accounts maintained by the organization with the ultimate intention of preparing
the financial statement there from. These financial statements are basically presented in two forms.
One, profitability statement which indicates the result of operations carried out by the organization
during a given period of time and second balance sheet which indicates the state of affairs of the
organization at any given point of time in terms of its assets and liabilities. Main purpose of
financial accounting is to ascertain profit or loss and to indicate financial position of an enterprise
(Drake, 2010).

Financial accounting is the field of accountancy concerned with the preparation of financial
statements for decision makers, such as stockholders, suppliers, banks, employees, government
agencies, owners, and other stakeholders. The fundamental need for financial accounting is to
reduce principal-agent problem by measuring and monitoring agents' performance and reporting
the results to interested users. And although financial accountancy is used to prepare accounting
information for people outside the organization or not involved in the day to day running of the
company. Managerial accounting provides accounting information to help managers make
decisions to manage the business (Robert K.Eskew & Daniel L.Jensen, 2001 fifth edition).

2.1.3 Objectives of financial reporting

The objectives of financial accounting are:-To provide useful information to the users of
financial reports, the information should be useful from a number of perspectives. Such as
whether to provide credit to customer, whether to lend, to borrow and whether to invest in
business The information should be comprehensive to those with reasonable grounding in
business which means that it should not be laced with jargon or burdened with so much detail

7
 that is impossible to extract essential about a business from its financial statements. (Earl R.
Wilson, 2010).

To provide information about the cash flows to which an entity is subjected, including the
timing and uncertainty of cash flows, this information is critical for determining the liquidity
of a business, which in turn can be used to evaluate whether an organization can be continue
as going concern to disclose the obligation and economic resource of an entity. There should
be an emphasis on the changes in liabilities and resource which can be used to predict future
cash flow. (Fees Warren 2003).

2.1.4 Fundamental accounting practices concepts and their relevance

According to statements of standard accounting practices, the fundamental practices include
the following:

2.1.4.1 Consistency concept

The purpose of the consistency concept is to assure that financial statements can be easily
compared period to period, and therefore to encourage that the same accounting principles be
used from year to year. When changes in accounting methods are necessary, such changes
should be disclosed and the reasoning explained in notes to financial statements. If businesses
were allowed to change accounting principles whenever they wished, the amount of net
income reported could continuously be manipulated. Different accounting methods may be
used for different business segments (Petroff, 1989).

2.1.4.2 The prudence concept

This concept in accounting governs the recording and reporting of financial transactions, "such
that the assets or income are not overstated and liabilities or expenses understated. Prudence in
accounting is about exercising due caution in preparing financial statements to reflect the least
favorable position, particularly as accounting depends on estimates even for simpler transactions.
It is, therefore, one of the fundamental principles of financial accounting and is considered very
important by the IAS (International Accounting Standard (Vector, 2011).

2.1.4.3 Depreciation
It is defined as a portion of the cost that reflects the use of a fixed asset during an accounting
period. A fixed asset is an item that has a useful life of over one year (John, 2005).

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 2.1.4.4 The going concern principle
Is the assumption that an entity will remain in business for the foreseeable future. Conversely,
this means the entity will not be forced to halt operations and liquidate its assets in the near
term. By making this assumption, the accountant is justified in deferring the recognition of
some expenses until a later period, when the entity will presumably still be in business and
using its assets (Wiley GAAP, 2012).

2.1.4.5 Realization of revenue

It refers to the timing of its recognition in the accounting records, in other words, when the
increase in value of the goods and services “really happened”, that value was “recorded”
(recognized) in the company’s books (John,2005).

2.1.4.6 Disclosure
This principle states that the accounting methods adopted should be disclosed in the accounts
and in particular any changes in those methods. The conclusion to be drawn is that methods
should be consistently applied and disclosed but if for any reason a change is deemed to be
appropriate then attention should be drawn to the fact (Black wood, 1995).

2.1.4.7 Accrual concept

According to this concept, income is recorded as earned even though it might have not been
received cash provided there is right to income the portion of income that has not been received
cash is recorded as asset (J.Omunuk, 1999).

2.1.5 Types of Accounting Practices

The accounting practice is an information system that enables us to make some important
deduction. It has sub- systems (Glautier & underdown, 1997), the main ones being:

2.1.5.1 Purchasing system

This relates to the procurement of raw materials or merchandize inventories. It is carried out by
the purchasing department, each request is made on a requisition form stating the nature and
the quantity required which is signed by an authorized person.
The purchasing system involves ordering, receiving and payment for goods and services required
by the organization. It consists of the following stages. Identification of the need for the
acquisition of goods and services (Kokand, 2003).

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 Placement of an order - Requisition notes for purchases should be authorized by a responsible
official in the user department. All orders should be recorded on official documents showing
suppliers names, quantities ordered and the price.
 Receipt of the goods and services -There should be a separate department or personnel to deal
with receipt of all goods. All goods should be checked for quantity and quality and goods
received notes should be raised for all the goods accepted should be sequentially pre-numbered.
 Financing and returns - The invoices should be signed and approved for payment by a
responsible official independent of the ordering and receipt of goods. All invoices should then
be entered in the purchases day book and posted to the purchases ledger. A record of goods
returned should be kept and checked to the credited notes received from suppliers.
 Disbursement of cash- Checks should be prepared with supporting documentation by a
responsible official independent of the purchases department. Checks should be signed by more
than one person. Checks should then be entered in the cash book.
 Recording of the transaction involved- A creditor’s ledger control account should be
maintained and regularly checked against balances in the ledger by an independent person.
Creditor’s ledger records should be kept by personnel independent of receiving goods, invoice
authorization and payment

2.1.5.3 Payroll system

This relates to payment of wages and salaries, commissions, withholding tax and other deductions.
Manipu1ation of the wages record is probably one of the easiest ways of concealing substantial
misappropriation of cash and therefore the most commonly resorted to. It is therefore imperative
that wage recording and payments are dealt with by the business in a systematic manner that
adequate checks are in place. Payroll management should involve; the maintenance of a permanent
record for each employee, recording of time worked the calculation and recording of wages and
authorized deductions, disbursements to employees and allocations in the books of account (Arora,
1995).

2.1.5.4 Accounts receivable system

This involves the preparation of customer invoices and periodic statements for goods and services
sold on credit. It also involves the maintenance of accounts receivable records.

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According to (Ntege,2003) selling goods or services on credit results in costs being incurred by a
business These costs include credit administration costs, bad debts and opportunities foregone in
using the funds for more profitable purposes. However these costs must be weighed against the
benefits of increased sales resulting from the opportunity for customers to delay payment. When a
business offers to sell its goods or services on credit, it must have clear policies concerning which
customers should receive credit.
However, (Puttick, 1982) states that, a business must determine what credit terms it is prepared to
offer its customers. The length of credit offered to customers can vary significantly between
businesses. The length of credit may be influenced by various factors which include; the typical
credit terms operating within the industry, the degree of competition within the industry, the
bargaining power of particular customers, the risk of nonpayment, the capacity of the business to
offer credit and the marketing, strategy of the business.
2.1.5.5 Accounts payable system
Financial institutions like banks that extend loans to customers are interested in making sure that
the loans are serviced and do not become nonperforming. Before loans or any credit is granted, the
credit worthiness of the applicant is analyzed. Credit analysis can only be possible if accounting
information in form of financial statement exists (J.Omunuk, 1999).
2.1.5.6 General ledger

The general ledger is the main ledger of an organization. It is supposed to contain all the ledger
accounts of the organization. In case there are too many accounts in the organization, it is only the
control accounts that should appear in the general or main ledger and others are recorded in the
subsidiary ledgers. In manual accounting system, the general ledger is a big bound book with hard
covers. Each page in the book represents an account. As observed, the general ledger is supposed
to contain all accounts of that organization (J.Omunuk, 1999).

In addition firms large enough to divide its journal into day books and cash books will probably
also need to divide its ledger. The sales ledger contains all the personal accounts of the firm’s
customers. The creditor’s ledger contains the personal accounts of the firm’s suppliers. The main
reason for dividing the ledger is that it allows several people to be engaged in the recording process
and permits section of the work around these groups of accounts (Glautierand Underdown, 1997).

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 2.1.6 Accounting practices procedures and their effectiveness
Proper accounting practices are one of the essential elements for efficient and effective
management of an organization. They act as policy tools as well as a procedure established to
provide management with reasonable assurance that everything is functioning. It is the primary
responsibility of management to determine the purpose and content of the accounting procedures
appropriated for the organization (Meigs R. F., Meigs, W. B., & Meigs, M. A., 1995).
Furthermore where management is able to maintain an adequate accounting system such as on a
resource use and incorporate well various internal controls then it will be able to delegate authority
and assign responsibilities for such functions (Shirin, 2001).
According to (M.Hall, 2009) effective accounting systems establishes a policy framework and
procedures that provide management with reasonable assurance that the business is running
effectively and efficiently. Because of this assurance, management will have faith in the system of
accounting procedures, as the system will be able to re-organize, calculate, classify post,
summarize and report transactions as they occur. This will also enable the organization to make
dependable decisions that are feasible in the future.
These policies are meant to maintain strong internal controls over resource use and other activities
in general. Management should review the adequacy of accounting procedures on a regular basis
so as to ensure that all significant controls are operating effectively and consistently followed
having been well communicated throughout the company (Charles, 1980).

2.1.6.1 Effectiveness of accounting practice

It enables firms to control their various units (Moilanen, 2008), such as financial reporting present
asset values, incomes, taxation expenses (Dyson,J.R., and Powell, , 1996). Thus, the view of
accounting is a tool for administering resources efficiently, supporting to rational decision making
(Quattrone, 2009), and support administrator to strategic planning, task processing improvement,
and performance evaluation. Further, (M.Hall, 2009) argued that the role of accounting
information can support manager to knowledge development, managerial work, and form of
communication.
Accounting practice is the accounting process to collect, transform process, report, and disseminate
reporting to users. Generally, accounting practice presents accounting information to organization

12
for management and it is a tool for efficient resource administration, and support appropriate
decision making (Quattrone, 2009)
Accounting approach has disciplinary and calculative practice (Quattrone, 2009) such as assess
cost, resource and expense allocation method, and budgets have been implemented to support
effective decision making and performance measuring (Chandler and Daems, , 1979 ) accounting
practice has an important role in establishing financial reporting and accounting information that
external and internal users use to assess the firm's financial status and performance.
It enables firms to control their various units (Moilanen, 2008) such as financial reporting present
asset values, incomes, taxation expenses. Dyson,J.R., and Powell, , 1996) Thus, the view
accounting is a tool for administering resources efficiently, supporting to rational decision.

2.2 Empirical literature review

Assessment of Accounting and reporting practice conducted by some researchers, to review some
of them Solomon Beyene (2012) was tried to assess the accounting and reporting practice of
Aksum University. The general objective of this study was to assess the reliability of periodic
financial reports that an institution prepares. And assessing the basic principles of accounting and
financial report, to assess how assets are recorded and what base of accounting is applied, and to
see whether accumulated depression is recorded for plant assets were specific objective of the
research.

To meet the general objective the researcher was used both primary and secondary source of data.
Those data were collected by using primary and secondary data gathering instruments and used
purposive sampling techniques. By using those research methodologies the researcher was
analyzed and interpreted accounting practice of Aksum university accounting and financial
reporting principles, measurement focus and basis of accounting, transfer revenue expenditure and
expense account classification and fund groups and their recognition methods of the institution.
The researcher get findings of Failing to prepare reliable and relevant financial statement, fail to
prepare study an attempt to assess the accounting and reporting practices of this governmental
institution were poor internal control and lack of employees are problems that was stated by the
researcher as problem statement. Based on the findings of the study they concluded regarding book

13
keeping system, recognition of gifted asset, regarding to recognition of unrestricted fund and basis
of accounting use by the university.

Birhan Admas (2012), during his study on accounting and reporting practice of NGOs at Addis
Ababa in Jimma university ,the best international accounting and reporting practice and
operational environment analysis have the purpose that was to examine the relationship between
best international practice and goals achievements stability through effective of financial
information benefits organizational value and business information. The researcher used
questionnaires instrument for collection of data that fits to the success of the objective of the study.
Finally his finding result present that quality accounting and reporting practice enables the
organization to valued fixed asset at original cost and the institution use accrual basis of accounting
thus revenue are reported when material or service are received.

Asmare Tina(2015), during his study to examine the effectiveness of accounting and reporting
practice in Dilla university result of the deliberate that application of double entry book keeping
accounting basis system, GAAP principles, reporting practices, problem face the institution in
practicing accounting and reporting and measuring the institution taken source of revenue, mostly
trial balance summery.

2.3 Research gap

Generally, the previous researchers studied about the applications of double entry book keeping
accounting basis system, examine the relationship between best international practice and goal
achievements stability through effective of financial information and use financial statements to
improve financial management and secure access to finance and implementation of accumulated
depreciation of plant asset.

The prior researchers used judgmental sampling technique and other sampling techniques as it
mentioned but this study will to use census that is all the studies target population will include in
this study because the target population of this study are small in number and lastly this study tries
to assess recently accounting and reporting practice of the organizations. However, our study
would differ from the above researchers since this study would focus on accounting and reporting
practice and International Financial reporting Standard (IFRS) of Bunna International bank in
Bahirdar town.

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 CHAPTER THRE

RESEARCH DESIGN AND METHODOLOGY

3.1 Research design
This study will use descriptive research design because this study aims in finding and describing
the extent to which an accounting practice and reporting system has contributed to the efficient
and effective financial report of the organization.

3.2 Research approach

To make the research more clear and attractive the researcher will use qualitative approach because
of study is descriptive type of research. Though it will been performed based on qualitative analysis
and the data will analyze by using different tables and percentages to assess accounting and
reporting practice in Bunna International Bank in Bahirdar branch.

3.3Target population
The target population for this study will be the total employee of Bunna International bank in
Bahirdar branch.

3.4 Sampling method

The study's target populations are totally 50 employees of the organization and they have detail
knowledge about the accounting system of the organization. Though the researcher will use census
that is a complete representation of the elements of population.

3.5 Source of data

In this study in order to get the relevant data, the researcher will use both primary and secondary
data; the primary data will be collect from employees. Whereas secondary data are collect from
different documents that related to accounting and reporting practice like, different text book or
reference and websites.

3.6 Method of data collection

For conducting effective study, accurate and reliable data are crucial. In order to arrive at a good
conclusion both primary and secondary data will use in this study.

Primary data will be collected by means of observation, questionnaires to the select employee of
the organization and by the face to face interviewing the management of the organization. The
questionnaires will be processed through both open and closed ended questioners. Moreover,

15
secondary data gathered from, different reference book, research papers, company’s records,
journals and different websites.

3.7 Method of data analysis

After the relevant data will be collected, the data would be analyzed by using descriptive analysis
method. The analyses indicate transformation of raw data in to a form that make easy to understand
and interest it. The collected relevant data or primary and secondary will be analyzed through
tabulation and presentation form

3.8 Work plan and budget break down

3.8.1 Time breakdown
Table 1.Time breakdown
No Activities will be performing Time(in E.C)

1 Selecting research topic 28/03/2016

2 Gathering preliminary concepts for the research 28/03/2016 to 15/04/2016

proposal
3 Preparing first draft of research proposal and 03/11/2012 to 15/11/2016
submitting it to the instructor
4 accepting comments of first draft and writing second 16/11/2016 to 22/11/2016
draft research proposal
5 Research Defense 15/12/2016 to 17/12/2016

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3.8.2. Budget breakdown

Table 2.Budget breakdown

No Budget purpose Unit Quantity Unit price in Total price in Birr Remark
Birr
1 Pen Pack 1 550 550 1*550
2 Paper Pack 2 600 1200 2*600
3 Typing and Page 200 15 3000 200*15
editing
4 Internet service - - - 2500

5 Printing Page 200 3 600 200*3

6 Photocopy Page 200 3 600 200*3
7 Binding booklet 2 30 60 2*30
8 Transport 20 10 200 20*10

Total 8210 -

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 Reference
Asmare Tina, (2015), Examine the effectiveness of Accounting and reporting practice in Dilla
University.

Birhan Admass (2012), Accounting and reporting practice of NGOs at Addis Ababa in Jimma
University.

Blackwood, T. (1995). Accounting for Business. columbia: Columbia Business school publisher
1st edition.

down, G. a. (1997). Accounting system. USA.

Eari R.Wilson, (2010), Accounting for governmental and nonprofit entity15th Ed.

Glautier & underdown. (1997). accounting system.

Gouws, D. G. Cronjé, C. J. (2008). Corporate annual reports accounting practices in transition,.

Southern.

Horngren, .. (1973). cost accounting.

John. (2005). Accounting II concepts ACCT 211 23RD Edition.

MarshalB.Rommey,(2000), Accounting information system, 8thed prentice Hall, New Jersey.

Moilanen, S. “. (2008). The role of accounting and an intermediate subsidiary in the management
control system” . Management accounting research.

Ntege. (2003). Debtors Cycle handout. KAMPLA: Makerere University Business School
Kampala.

Petroff, J. (1989). Article not published long horn publisher 2nd edition.

Quattrone, P. (2009). the power of the visual, and the success of accounting. Accounting,
Organizations and Society .

Salant and Dillman. (1994).

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Shirin, R. (2001). International accounting eastern economy edition. INDIA: Prentice Hall of India
.

Warren accounting principle, 1978

warren, F. (1999). Warren, rev and fess Accounting 18th ed. . south western. USA.

Wiley GAAP, .. (2012). application of Generally Accepted Accounting Principles Interpretation.

Blackwell publishing.

Wu, X. (2004). Accounting Reform & Corruption in, Accounting Review. Asia.

Dyson,J.R., and Powell, . (1996). The impact of information technology on corporate financial
reporting. British Accounting Review.

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 APPENDIX

ALKAN HEALTH SCIENCE BUSINESS AND TECHNOLOGY

COLLEGE

FACULTY OF BUSINESS

DEPARTEMENT OF ACCOUNTING AND FINANCE

This questionnaire is intended to collect primary data used for research entitled on Assessment of
accounting and reporting practice in BUNNA INTERNATIONAL Bank in case of Bahirdar
branch. Therefore you are kindly requested to provide information. Your response will use for
research purpose and will be kept confidentially. Each of your response is very use full for the
study. The researcher thanks you in advance for your valuable contribution.

General Instruction:

 You don’t have to write your name. I assure that your response will be kept in secret.
 Fill the blanks and put thick()

Part 1: Demographic information

1) Sex Male Female

2) Age 18-25 26-35 36-45 46 and above

3) Educational level: 12completed Diploma BA degree Master & above

4) Work experience 1 year 1-5years 5 -10years above 10year

Part 2: Questions on professions

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5) From GAAP principle how many of you are Applying in your institution?

All of them Most of them Half of them none of them

6) Does the organization apply accounting principles, procedures and policies in their working
environment? Yes No Some what
7) If you answer for question number 6 is no why?

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

8) If you answer question number 6 is ‘yes’

why?...................................................................................................................................................
............................................................................................................................................................

9) Does the financial report of your organization conformity with GAAP?

Yes No

10) If your response of question number 8 is “YES” how can you justify it?

………………………………………………………………………………………………
………………………………………………………………………………………………

11) Does your financial report cover all financial transaction?

Yes No

12) Do you have a clear understanding about the reporting practice of your organization?
Yes No
13) What type of financial system do you produce? Please specify.
………………………………………………………………………………………………………
14) Does the financial report of the organization reported timely?
Yes No
15) If your response of question number 14“YES” how many times reported in a year?
Monthly Quarterly Semi-annual annually
16) Does the organization prepare periodic financial report? Yes No

17) If yes, when and how that report prepare?

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………………………………………………………………………………………………………………
………………………………………………………………………………………………………………

18) Does the periodic financial report include all financial statement elements?

Yes No

19) Based on question number 18 answer what types of financial statement included in the report?
............................................................................................................................................................

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