JIGJIGA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF ACCOUNTING AND FINANCE

The Impact of Accounting Information System on Performance at Dashen

Bank in Jigjiga Branch

Research proposal submitted for partial fulfillment of BA degree in

Accounting and Finance.

Prepared by: -

ID NO.

Advisor:

Mar,2024

jigjiga, Ethiopia

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 ABSTRACT
This research paper will be conduct on the impact of accounting information system in
performance and the general objective of this study is to asses accounting information system
and its performance in dashen bank Jigjiga branch. The researcher woulduse descriptive type of
research design. The introduction part describes about the benefit of accounting information
system for an organization specially the bank. Like money transfer, data share, performance
management, managerial control and other communication and coordination among various
branches of the organization are some of the benefit. The researcher wiil be use judgmental
method to conduct the study and will be use both primary and secondary source of data. The
primary and secondary data will be collect through questionnaires and relat publish material.
After the completion of the study major problems are investigat and solution and recommend for
the identified problems.

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Table of Contents
CHAPTER ONE..............................................................................................................................................1
INTRODACTION...........................................................................................................................................1
1.1 BACKGROUND OF THE STUDY............................................................................................................1
1.2 Background of the organization.........................................................................................................2
1.3 .STATEMENT OF THE PROBLEM.........................................................................................................2
1.4 RESEARCH QUESTION........................................................................................................................3
1.4 OBJECTIVE OF THE STUDY..................................................................................................................4
1.5.1. General Objective......................................................................................................................4
1.5.2. Specific Objectives.....................................................................................................................4
3 RESEARCH METHOD............................................................................................................................4
3.1 Research design.............................................................................................................................4
3.2Data Source and Collection.............................................................................................................4
3.3 Method of sampling and sample size............................................................................................5
3.4 Method of Data Analysis and Tools...............................................................................................5
1.7 Significance of the study....................................................................................................................5
1.8 Scope of the study.............................................................................................................................6
1.9 Limitation of the study.......................................................................................................................6
1.10 Organization of the paper................................................................................................................6
CHAPTER TWO.............................................................................................................................................7
LITREACHER REVIW.....................................................................................................................................7
2.1 THEORETICAL LITREACHER REVIEW...................................................................................................7
2.1.1 Accounting information and performance.....................................................................................7
2.1.2 Accounting information and function.........................................................................................7
2.2 The value of accounting information.................................................................................................7
2.3 Types of accounting information.......................................................................................................8

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 2.3.1 Managerial accounting information...........................................................................................8
2.3.2 Financial accounting information...............................................................................................8
2.4 The users of accounting information.................................................................................................8
2.5 The roll of accounting information on performance..........................................................................9
2.6Financial statements its role in performance.....................................................................................9
2.6.1 Income statement.......................................................................................................................9
2.6.2 Balance Sheet..........................................................................................................................10
2.7 The accounting information and accounting cycle..........................................................................10
2.8 The empirical literature review........................................................................................................11
CHAPTER THREE........................................................................................................................................12
DATA ANALYSIS AND INTERPETATIO.........................................................................................................12
4.1 Questionnaires Analysis...................................................................................................................12
CHAPTER FOUR..........................................................................................................................................22
CONCLUTION AVD RECOMMENDATION....................................................................................................22
Conclusions............................................................................................................................................22
4.2RECOMMENDATION.........................................................................................................................24
REFERENCE................................................................................................................................................25

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 CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Accounting information system is any financial or other measurable control of performance
oriented information about an organization at relevance to stock holders for there is in monitoring
a bank and in performance related to the bank (Taylor, 1999).

Throughout the world accounting information system is the collection, storage and processing of
financial and accounting data that is uses by decision makers. An accounting information system is
generally a computer- based method for tracking accounting activity in conjunction with
information technology resource (chorda, 1999).

Information about the bank is accounts by various government agents and private origination.
Bank information maintain by money decision makers including managers, financial analysis
stockholders and customer groups (Anderson, needless, 1990)

According to (j.Hall2011) Accounting information system are use managers, creditors, investors,
governments, employments and other users. Today proper accounting information system is very
important for the success of any originationlike managers, investors, and creditors and non –
profit originations use accounting information system in performance. Dashen Bank is one of the
origination that user accounting information system in performance. An accounting information
system is the allocation of resource such as people and equipment design to transfer financial
data in to information’s the existence an important and best accounting information is essential
for the performance at any bank or origination.

According to (Tailor, 1999) accounting information system is a collection avoidance system that
gives information all the ships in your area, her speed and courses and how to contact them. Thus
information is publically broadcast of on VHF radio which can be pick up easer by other ships or
by shore based receivers. Accounting information system is collecting and processing transaction
data and communicating financial information to decision makers accounting transaction events,
economic events that require recording in the financial statements.

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Not all events are recorded in the financial position (assets, liabilities, or stock holders, equity
items) of the company. It is an individual accounting record of increases and decreases in
specific asset, liability, stockholders, equity, revenue, or expense item. It contains consists of the
people, records, and methods use to gather financial information about business events. Recordit,
process it in to a use full form and communicate the information to end users and decision
makers. In other words an accounting information system is every thinning and every one
involving collecting, recording and organizing financial transactions for the company.

1.2 Background of the organization

Dashen international bank was established after the dawn fall of the Dergue regime and
introduction of the market policy in 1991.Initially it was established by 486 shareholders with a
paid up capital of at birr 24.2 million. It was licensed on November 10, 1994 G.C and started
banking operations on February 13, 1995. It is the first private bank to bulledand own head
quarter at public of what is growing in the Ethiopian financial district. Dashen International Bank
is establishing in Jigjiga Branch in 1999E. C. It is far from central Bank of Addis Abababy
401K.m.

This Bank is provides the following services;

 Provide current and saving account.

 Provide loan and credit services.
 Local transfer.
 Trade service which facilities internal trade.

Vision

To became a world class Commercial Bank by the year 2025.

Mission

We are committed to best realizing stock holders needs to through on hand financial Information
globally and supporting national development priorities. We strongly believe that using the
public confidence is the basic our success.

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1.3 .STATEMENT OF THE PROBLEM
Accounting information system is the most important requirement for the performance of
the bank, such as potential inventories, lenders, managers, nonprofit organizations and
various government agencies also use accounting information through the people manages
(Anderson, 1990).

Adequate accounting information system a general performance of the organizational

(bank). Such as to know the landing and borrowing polices of the bank.Accounting
information system and their performance would be at two options of coins, since many
organizations and institutions need accounting information system to increase their
economy and to be profitable. Accounting information system is essential to know the
performance of the bank (Fees warren, 1993)

The problems commonly occur, when accounting information system is not used and does
not play its performance (Anderson, 1990) .It is difficult to perform the landing and
borrowing polices of the bank as well as forecasting the outcome in the future it results the
banks performance out of the market competition and decrease the profit earning of the
bank and also it affects the past performance of the organizations.

According to the research conducted on accounting information system in dire data city
administration by Samuel, (2012) concluded that Accounting information system (AIS) is
an important mechanism for an organization, vital for effective management decision
making, in controlling, and administering an organization. Effective accounting information
system will ensure the integrity and reliability of important financial data that minimize
risk and frauds. But in his study not incorporate the problems of as operating system
crashes, data malfunctionand transmission error among others. In order to full fill the gap
the study would be conducted. The purpose of this research is trying to answer the
following basic questions.

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1.4 RESEARCH QUESTION
 What are the major reasons that forced Dashen bank to use accounting information
system?
 Is accounting information system properly reported the performance of the bank?
 How accounting information system utilized in the bank?
 What is the major roles AIS play in customer attraction, decision making and financial
reporting?

1.4 OBJECTIVE OF THE STUDY

1.5.1. General Objective

The General objective of the study is to assess the impact of accounting information system in
performance in case of Dashen international bank in Arba Minch Branch.

1.5.2. Specific Objectives

The study would have the following specific objective

 To identify the performance that accounting information system for decision maker
 To assess the proper implementation of accounting information system in the bank.
 To assess the utilization of accounting information system in the bank.
 To assess the role of AIS in customer attraction and its relevance in decision making
and financial reporting in Dashen bank.

1.7 Significance of studies

Now a day banks are relatively better alternatives for many investors to save and manage their
money and to their balance of payments. It is believed that this study would clearly reflect what
the accounting information system on performance? And what limitation and weakness and will
give possible solutions to how financial managers should controlled its performance. This study
would contribute the following

 The study may provide as starting ground to other researcher in order to undertake
intensive study.
 It gives value to the researcher in case of development research experience.
 It will serve as a starting point for other researchers who conduct further investigation on
the area. Itdevelops the ability of the researchers in problem identification. And the
organization to help take corrective action onthe suggesting solution or recommendation.

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1.8 Scope of the study
The main concern of the study will be to assess the important of accounting information system
on performance. This study tried to investigat only Dashen international bank and it’s related
with accounting information system in performance of the accounting, managers and other
concerning bodies of the bank. This study will be delimit to those areas which reveal the
financial performance of accounting information system. The study would better if it is carrying
out the accounting information system on performance of the bank. The study covers the resent
four years (2010-2014) auditing annual financial statements in order to gather accurate and
reliable data and restrict to perform accounting information system.

1.9 Limitation of the study

Clearly known, while conducting the research, there wear different obstacles’ that researcher
would encounter a lot of problem. Among them;

 Some financial constraint and shortage of time

 Lack of source to secondary data
 Problem of responded wear unwillingness to response the question
 Lack of experience to conduct research

1.10 Organization of the paper

The study will be organize in the three chapters. The first chapter contains with thebackground of
the study, statement of the problem,researche question, scope of study objective of study,
organization of paper. The second chapter deals with reviews of related literachers.The third
chapter deals research methodology.

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 CHAPTER TWO

LITREACHER REVIW
The following section contains theoretical reviews, empirical review, and conclusions .

2.1 THEORETICAL LITREACHER REVIEW

2.1.1 Accounting information and performance
Accounting is defined as the process of identifying, measuring, recording and communicating
accounting information to permit informed judgments and economic performance. The primary
purpose accounting is to help persons to make economic performance in our society. Researchers
must be allocating with in kinds of entity (Anderson, 1990).

2.1.2 Accounting information and function

The accounting information provides the basis for on performance about research allocation.
Most business performance cannot make without careful analysis of relevant information. The
accounting function is the financial information at the bank in these regard accounting plays
important role in transaction processing, capturing and recording events. Accounting information
is essential to the performance it provides information for three function.

 Planning: - is the process of formulating course of actions.

 Controlling: - is the process of seeing what plans Carrey are out.
 Evaluating: - is the examination of the whole performance process to the end of
improving it and up.

2.2 The value of accounting information

The value of accounting to users are determine by must its reliability. The purpose of
information is to lead the users to desire action for this to happened information must pass
certain attributes relevance and accuracy. Completeness are consist present information is
reliable and provides value to user informant lacking reliability is not value. The negative
implementation of reliable information is that can lead to poor decision (James, 1998).

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2.3 Types of accounting information
Accounting is defined as earlier as information system that measures, process and communicates
information that is useful performance at the bank. Commonly is made between the filled of
managements accounting information and financial accounting information (Fees warn, 1998).

2.3.1 Managerial accounting information

Both historical and estimated data used by management in conducting daily operation, planning
future operations and developing the overall strategy. Management accounting may stress
different future at the business from high level strategies to detailed operation. It provides
internal decision who is engaged with information about financing, investing and operating
activities (Anderson, 1990).

2.3.2 Financial accounting information

Financial accounting information that is prepared according to general accepted accounting

principle (GAAP). This statements report the past results of operations and financial conditions
of the business. They are prepared primarily the benefit of operations of institution that are
outside or external to the organization. This statement is also useful to managing and directing
the performance of the bank (GAAP, 2000).

2.4 The users of accounting information

Accounting information’s are used more widely than is commonly realized. The users of
accounting information can be divided in to three groups.

1. Those who managers business

2. Those outside business who have a direct financial interest in the business
3. Those people originates and agents that have an indirect financial interest in the bank.
The users of accounting information are management, users with a direct financial
interest and users with indirect financial interest.
 Management: - is the group of people who have overall responsibility for operating
business and for meeting the banks goal. Includes the owners in large business
management more often consists of people we are licked.
 Users with direct financial interest:-other major function of accounting is to major and
reports information about haw to perform most business periodically publish asset of
general purpose of financial statements. That reports their success in meeting the
objectives of profitability and liquidity. This statements show what is happen in the past
and improvement indicates of what is going to in the future.
 Uses with indirect financial interest:- society as whale through government and public
groups in recent year become one of the biggest most important users of accounting

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 information users who need accounting information to make decision on public issues
including tax authorization, regulate are agents, economic plans and other groups
(Needless, 2002).

2.5 The roll of accounting information on performance

There are many use of accounting information on performance. Accounting scan accounts record
to spot problems area to focus on lenders use of accounting and records to determine risk loan
funds to a company tax authorities can decide it bank is paid the right amount of tax by
analyzing the firms accounting information. The following activates are also made based on the
accounting information system:-

 Investing decision
 Management decision
 Landing decision
 Taxes (Anderson,1990)

2.6Financial statements its role in performance

Financial statements are the accounting reports that provide the accounting information to users.
A bank often provides accounting information to accounts and other financial statements. The
statements are useful because they describe the banks financial health and performance in
accurate and highly informality format because they provide an overall view of the entire banks
through accounting information financial statement are good pleas to study.

2.6.1 Income statement

Income statement is use full because, it shows whether the business earned profit net income a
bank earns a net income its revenue excess its expense. Revenues are inflows of asset received in
exchange of for service provide to customers as part of the major or central operations of the
business. Expenses are outflow they using up of assets as a result of the major or central
operation of a business it may be occur increase in liability.

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2.6.2 Balance Sheet

The purpose of balance sheet is to provide information that helps users understand a bank’s
financial states as a result, the balance sheet is often called the statement of financial poisoning.
The balance sheet describes financial position by listing the types and dollar of assets, liabilities
and equity of the business (Smith, 1989).

Asset:- are probable future of economy benefits obtained or controlled by the particular entity
as a result of past transaction or event in other words they are economic sources owned by
business that are expected to benefit future bank operations.

Liability: - are probable future secures of economic benefits arising from present obligation of a
particular entities to transfer assets or provide services to other entities in the future as result of
past transactions and events.

Equity: - is the residential interest in the asset of an entity that remaining after deciding its
liability in the business entries is called the ownership interest (smith, 1990).

2.7 The accounting information and accounting cycle

An accounting cycle: - is the sequence of accounting procurers used to record classifies and
summaries of accounting information.It begin with initial recording of business. Transactions
and concludes with the preparations of financial statement summarizing the effects of this
transactions upon the assets.

Liabilities and equities of the business it includes the following steps:

1. Recording business transaction and events in the journals

2. Classifying dada by posting from the journals to the leggier.
3. Summarizing data from ledger in an adjusted trial balance.
4. Adjusting, correcting and updating record data completion the work sheet.
5. Summarizing, adjusting and recording
6. Closing the account records to summarize the operation of accounting period.
7. Preparation of post-closing trial balance.

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 8. Receiving certain adjusted units to facility the recording process in the subsequent
information of accounting period.

2.8 The empirical literature review

According to (William J,Burns, 2003) the role of accounting information is important for
performance of the bank. The researcher considers the following three statements for the role
of accounting information in performance.

 If accounting information is not relevant on performance under consideration a change

affect the researcher’s performance.
 The concept of accounting information head on performance on how will the
accounting and accounting system measures significant attributes and factors affecting
to words accounting information .
 The availability of the accounting information will be an important better most for
accounting to accounting information.

The researcher suggests that also the accounting information is important for measuring,
processing and communicating information that is useful to make business performance.

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Chapter three

3. RESEARCH METHOD

3.1 Research design

The researcher will be use descriptive type research design that is follow quantitative data
collection approach. The researcher will be use close ende questionnaires for quantitative
approaches. Moreover, the researcher will be usedquestionnaires in order to get detail
information about the impacts of accounting information systems in Dashen bank in Jigjiga
branch.

3.2 Data Source and Collection

The researcher will be use quantitative types of data which is express in terms of number. In this
study, the researcher will be use both primary and secondary source of data. As the source is
identifiy, the primary data will be collect from the primary source through questionnaire and
interview. In the questionnaire, the researcher prepar close end question and distribut to the
target respondents. In the interview data collection method, the researcher would use structural
interview. The structural interviews have been conducting with the bank’s general manager and
internal auditor.

3.3 Method of sampling and sample size

The data Will be collect from the current employees of Dashen bank. The researcher use
purposive sampling method from none probability sampling. In these study managers,
accountants, economists and administrative staff of the organization are selected as a sample.
The researcher select 13 respondents from the total 18 employees in the bank.

Because, the researcher assum that a employees have knowledge about the accounting
information system performance in their day to day operations in that bank and to enable the
researcher to select those clerical employees, who fit the questionnaire and interview well, to
increase the degree of accuracy and reliability, and maximum chance of identifying the negative
feedback.

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3.4 Method of Data Analysis and Tools

Descriptive method of data analyze will be use, because it is conduct on information already
available. Tools of financial statement analyze and the researcher would use instruments of
electronic calculate to change the data in the form of percentage. After the relevant data will be
collect, and the data will process on the activity, which involves edit, cod, and classifying data to
make it accuracy and suitable for further analysis. Then the data will be analyz through the use of
tables, frequencies, and percentages. Finally, the result of the analysis will discuss and interpret.

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No Description Responsibilities

Age group Number Percentage

1 20-31 12 92.3

31-40 7.69

40-50 0.00

Total 100%

Gender categories

2 Male 12 92.31

Female 01 7.69

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 Total 13 100%

Source: Survey 2017

Table: Age and Gender

Table3.3 Educational Background of the Employee and Job Position

The general characteristics of respondents background and position are stated in the below table.

No Description Respondent

3 Educational background No Percentage

Diploma 0 0.00

Degree 13 100

Master’s 0 0.00

Total 13 100%

4 Position

Junior officer 08 61.54

Senior officer 05 38.46

Total 13 100%

Source: Survey 2017

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Table 2: Educational background of the No

Description Respondent

Number Percentage

5 Excellent 01 7.7

Very good 06 46.15

Good 04 30.77

Satisfactory 02 15.38

Total 13 100%

6 Yes 3 23.08

No 10 76.92

Total 13 100%

Source: Survey 2017

The above table point out the majority of respondent responded 7.7% of the

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 No Description Respondent

Number Percentage

10 Time improvement 1 84.62

Service 02 15.38

Cost O 0.00

Total 13 100%

11 Increase income 13 100

Decrease income 0 0.00

Total 13 100%

Source: survey 2017

IN the above table shows that 84.63% of the respondent because of accounting information
system is a great improvement in the No

Description Respondents

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 Number Percentage

13 Helpful 12 92.31

Not helpful 0 0.0

No opinion 01 7.69

Total 13 100%

14 Yes 13 100

No 0 0.00

Total 13 100%

Source, Survey 2017

The above table shows that 92.31% of respondents. No

Description
Respondent

Number Percentage

By improving quality and 0.1 7.7

increase customers

0
By improving efficiency 0.00

0 0.00
Improving decision
making

02 15.38
Is saving of Knowledge

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 10 76.92
In all

Total 13 100%

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Very positive 04 30.77

Positive 09 69.23

Negative 0 0.00

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Total 100%

Source: Survey 2017

The above table shows that indicate 7.7% of the respondent responds that the quality service
have indicated improved and 76.92% of

Table 3.8Questionnaires related to accounting information system in performance

Dose accounting information system

properly reported by the bank Frequency Percentage
18 employees?

Yes 11 90

No 2 10

Total 13 100

Source own Survey 2017

Here, as it is seen in the above table, about 90% of the respondents stated that accounting
information system reported by the bank employees. On the other hand 10% of the
respondents stated that there is no accounting information system in performance reported by
the bank employee.
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 Does an accountant Frequency Percentage
of Awash bank
19 prepare financial
statement based on
GAAP?

12 94.0
Yes

No 1 6.0

Total 1 100

Source: survey -2017



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