RIFT VALLY UNIVERSTY

FACULTY OF ACCOUNTING AND FINANCE

RESEARCH THESIS ON ASSESMENT ON THE ROLE OF

ACCOUNTING INFORMATION SYSTEM ON OPERATIONAL
PERFORMANCE: IN CASE OF AWASH INTERNATIONAL BANK
(AIB)

BY
FETLEWERK MILKESSA
EYERUSALEM SILASHI
ENATHAGR TEFERA
ZAYEDA G/YOHANES
YITBARK HAILE

Advisor: Milkessa Belay

APRIL , 2020
ADDIS ABABA

i
 RESEARCH THESIS ON ASSESMENT ON THE ROLE OF
ACCOUNTING INFORMATION SYSTEM ON OPERATIONAL
PERFORMANCE: IN CASE OF AWASH INTERNATIONAL BANK
(AIB)

A RESEARCH SUBMITTED TO THE FACULTY OF ACCOUNTING BUSINESS FACLITY

RIFT VALLY UNIVERSTY

IN PARTIAL FULFILMENT OF THE REQUIRMENTS FOR THE DEGREE OF BACHLOR

OF ARTS IN ACCOUNTING

BY
FETLEWERK MILKESSA
EYERUSALEM SILASHI
ENATHAGR TEFERA
ZAYEDA G/YOHANES
YITBARK HAILE

JUNE 2020
ADDIS ABABA

ii
 RIFT VALLEY UNIVERSITY
RESEARCH THESIS ON ASSESMENT ON THE ROLE OF
ACCOUNTING INFORMATION SYSTEM ON OPERATIONAL
PERFORMANCE: IN CASE OF AWASH INTERNATIONAL BANK
(AIB)
BY
FETLEWERK MILKESSA
EYERUSALEM SILASHI
ENATHAGR TEFERA
ZAYEDA G/YOHANES
YITBARK HAILE
FACULTY OF ACCOUNTING AND FINANCE

APPROVED BY THE COMMITTEE OF EXMINERS

___________________________ _______________________
Department Head Signature
___________________________ _______________________
Advisor Signature
___________________________ _______________________
Internal Examiner Signature
___________________________ _______________________
External Examiner Signature

iii
Abstract

The aim of this study is to assess role of accounting information system (AIS) on operational
performance. AIS is the whole of the related components that are working together to collect,
store and disseminate data for the purpose of planning, control, coordination, analysis and
decision making. Therefore, role of AIS on elements of operational performance in case of AIB
is examined by using primary and secondary data as a source of data and used census method
and distributed 98 questionnaires in MIS department of AIB, out of which 88 of them were
returned and the remaining 10 were missing. The result of this study shows that AIS is very
useful for the organization’s operational performance and on the quality of decision making.

In addition, we also found some problems like delay in process, misunderstanding and in
consistency on the use of AIS. Considering the problems some recommendations were given that
should be implemented by AIB in order to increase the performance of the company these are: -
provide short term training and technical support for the employees, properly update the system
and increase experienced personnel and introducing latest AIS software like CASH BOOK and
TEMENOS T24.

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AKNOWLDAGMNET

Let the greatest thanks goes to the almighty GOD who made us arrive at this level!!

We also want to transfer our sincere appreciation to our advisor Milkessa Belay for his vital
advice in making this paper, without his advice, guidance and directives it would have been
difficult.

We extend our deepest thanks to all officials of Awash International bank who provided the
available information.

Finally, we would like to transfer our gratitude to our family and friends for their support in all
matters from the start to the end of the program.

Thank You All!

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Acronyms
AIS: Accounting Information System

MIS: Management Information System

AIB: Awash International Bank

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Table of Contents
RIFT VALLY UNIVERSTY ............................................................................................................... i

Acronyms ....................................................................................................................................... vi

CHAPTER ONE ............................................................................................................................. 1

1. INTRODUCTION ...................................................................................................................... 1

1.1 Background of the Study .......................................................................................................... 1

1.2. Statement of the Problem ......................................................................................................... 2

1.3. Research Question ............................................................................................................... 3

1.4. Objective of the Study ............................................................................................................. 3

1.4.1. Specific Objectives .......................................................................................................... 3

1.5. Significance of the Study ......................................................................................................... 4

1.6. Scope of the Study ................................................................................................................... 4

1.7. Definition of terms ................................................................................................................... 4

1.8. Research design and Methodologies ........................................................................................ 5

1.8. 1. Study design ..................................................................................................................... 5

1.8.2. Data type and sources ....................................................................................................... 5

1.8.3. Population and sampling techniques ................................................................................. 5

1.8.4. Methods of Data Collection .............................................................................................. 5

1.8.5. Methods of Data Analysis and Presentation .................................................................... 5

1.9. Limitation of the study ............................................................................................................. 6

1.10. Organization of the Study ...................................................................................................... 6

CHAPTER TWO ............................................................................................................................ 7

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2. LITERATURE REVIEW ........................................................................................................... 7

2.1. Introduction .............................................................................................................................. 7

2.2. Theoretical literature ................................................................................................................ 7

2.2.1. Information Systems ......................................................................................................... 7

2.2.2. Accounting Information System ....................................................................................... 8

2.2.3. Basic Subsystems in the AIS ............................................................................................ 8

2.2.4. Characteristics of accounting information system ............................................................ 9

2.2.5. Importance of accounting information system in banking sectors ................................. 11

2.2.6. Functions of accounting information system .................................................................. 11

2.2.6.1. Accounting Information System and Organizations ................................................ 12

2.2.6.2. Accounting Information System and Decision ........................................................ 13

2.2.6.3. AIS and Financial Performance ............................................................................... 14

2.2.6.4. AIS and performance measures ............................................................................... 14

2.2.6.5. AIS and productivity ................................................................................................ 16

2.2.7. AIS Effectiveness............................................................................................................ 17

2.2.8. AIS Integration................................................................................................................ 17

2.2.9. The Relationship between AIS Integration and AIS Effectiveness ................................ 18

2.3. Empirical literature ................................................................................................................ 18

2.3.1. Empirical evidence from other countries ........................................................................ 18

2.3.2. Empirical evidence in Ethiopia ....................................................................................... 19

2.4 Empirical gap .......................................................................................................................... 20

CHAPTER THREE ...................................................................................................................... 22

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3. Research Design and Methodology .......................................................................................... 22

3.1 Introduction ............................................................................................................................. 22

3.2 Research Method .................................................................................................................... 24

3.3 Data Source and Data Collection Instrument.......................................................................... 24

CHAPTER FOUR ......................................................................................................................... 26

4. DATA ANALYSIS, PRESENTATION AND INTERPRETATION ...................................... 26

4.1. Introduction ............................................................................................................................ 26

4.2. Characteristics of the Study Population ................................................................................ 26

4.3. Questions related to the study ................................................................................................ 28

4.3.1. Employees’ awareness on the use and implementation of AIS ...................................... 28

4.3.2. The use AIS..................................................................................................................... 29

3.3.3. AIS effectiveness ............................................................................................................ 29

4.3.4. The effect of AIS on the quality of decision making ...................................................... 30

3.3.6. Attitude towards the standard service provided by AIS over the past year .................... 31

4.3.7. AIS problem that exists in AIB ....................................................................................... 32

3.4. Analysis of Interview ............................................................................................................. 33

CHAPTER FIVE .......................................................................................................................... 35

5. SUMMARY, CONCLUSION ANS RECOMMENDATION .................................................. 35

5.1 . Summary ........................................................................................................................... 35

5.2. Conclusion ......................................................................................................................... 36

5.3. Recommendation ............................................................................................................... 37

APPENDIX ................................................................................................................................... 41

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Appendix A ................................................................................................................................... 41

Questionnaire ................................................................................................................................ 41

Appendix: B .................................................................................................................................. 43

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LIST OF TABLE

Table 1:Sex distribution of the respondents.................................................................................. 26

Table 2:Educational background of the respondents .................................................................... 26

Table 3:service years..................................................................................................................... 27

Table 4:Awareness of the use and implementation of AIS........................................................... 28

Table 5:The use of AIS for operational performance. .................................................................. 29

Table 6:AIS effectiveness for operational decision ...................................................................... 29

Table 7:The effect of AIS on the quality of decisions of AIB ...................................................... 30

Table 8:Attitude towards the existence of skill gap ...................................................................... 31

Table 9:Services provided by AIS over the past years. ................................................................ 31

Table 10:existence of problem in AIB .......................................................................................... 32

Table 11: the kinds of AIS problems existed in AIB .................................................................... 33

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 CHAPTER ONE

1. INTRODUCTION

1.1 Background of the Study

Now days the business world is changing at a faster and faster phase. The reasons given for this
is globalization, high IT investments and the rapid stage of technological change in combination
with increasing costs of research and development (Frishamar, 2002). The role of Information
Technology (IT) has shifted over the last decades to become an important part of how companies
manage and control their resources (Teng & Calhoun, 1996). Organizations are responding in
different ways, and at different rates to the wide range of IT based opportunities and pressures
(Johnson, 1986). Decisions regarding the building of technical IT architecture should be closely
linked to decisions made in designing the IT organization that should be linked to the
organizational design of the company itself. As a result, information technology plays a critical
role in modern business, especially regarding the accounting function (Efendi et al, 2006). IT
have radically transformed the nature of business and accounting practice (Hunton, 2002).

Accounting information system is the whole of the related components that are put together to
collect information, raw data or ordinary data and transform them into financial data for the
purpose of reporting them to decision makers (Salehi et al, 2010).

To better understand the term ‘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, 2000). Secondly, information is a valuable data processing that
provides a basis for making decisions, taking action and fulfilling legal obligation. Finally,
system is a group of harmonized and interrelated of business, components, and resources which
grouping, processing, managing, and controlling the data for producing and carrying the useful
information for decision makers through network of the channels and communication lines (Hall,
2008).

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The combination of the three words (accounting, information and system) accounting
information system indicate an integrated framework within an entity such as a business firm that
employs physical resources (i.e., material, Supplies, personnel, equipment, funds) to transform
economic data into financial information for conducting the firms operations and activities, and
providing information concerning the entity to a variety of interested users. The main purpose of
this paper is to assess the role of AIS on the operational performance of AIB.

1.2. Statement of the Problem

Accounting Information system is vital to any organization (Porter & Miller, 2002). Irani (2001)
argues that a successful and quality IS can bring enhanced efficiency and effectiveness in
operation, possible better business performance and stronger organizational culture. According to
Hall (2008), IS means not only capture, process and disseminate information but good and
quality information system, which contains relevance, accurate, complete, comprehensive, detail,
flexible, reliable and timeliness information so as to ensure streamline its operations into a
cohesive functioning unit, support business decision-making by providing management with
critical data, and they serve to enhance the organization's communication, reduce human labor,
support short- and long-term organizational goals, improving employees productivity and
distribute complex information.

There are number of researches that have shown accounting information system adoption does
increased a firm’s performance, profitability and operations efficiency in Malaysia, Spain,
Finland, Pakistan, Iran (Kharuddin, 2010; Estebanez 2010; Gullkvist, B., 2002; Rana 2011;
Sajady, 2008). In Nigeria Ajayi and Omirin (2007) investigated the use of AIS in decision-
making on long-term planning, short term planning and organizational performance in the
commercial banks of Nigeria. The researcher concluded that, “the use of accounting information
systems has a great importance in improving business operations in terms of reducing time and
cost.” These researches have been conducted in other parts of the world.

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Some researches in Ethiopia have assessed the opportunities, challenges and the benefits realized
via the adoption of AIS by commercial banks in Ethiopia (Garedachew, 2010; Kedir, 2013;
Samuel, 2013).

In addition, Taddesse (2015) has examined the investment on accounting information system
effect on private commercial banks performance and reached in to a conclusion that using the
latest accounting software leads to each private banks to report good performance on asset and
equity category due to the investment in AIS. These researches do not explain the issues on the
role of AIS on operational performance especially for AIB’s case. Accordingly, this study aims
to fulfill the gap by assessing the role of AIS on operational performance in case of AIB (main
branch).

1.3. Research Question

❖ What is the role of AIS in enhancing AIB’S operational performance?
❖ To what extent does AIB use AIS effectively for improving operational performance?
❖ Are there skill gaps on the use of AIS among different level of the organization?
❖ What are the challenges faced by the company by implementing AIS?

1.4. Objective of the Study

The general objective of this study is to examine the role of AIS of Awash International Bank
operational performance.

1.4.1. Specific Objectives

This study aimed to achieve the following specific objectives

❖ To assess the importance of AIS in AIB’s operational performance.

❖ To assess whether AIB is using AIS effectively for operational decisions.
❖ To determine whether a skill gap exists on the use of AIS among different level of the
organization.
❖ To identify the challenges faced by AIB by implementing AIS.

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1.5. Significance of the Study
The result of the study helps AIB to understand the weakness and strength of its accounting
information system. Besides, this research also can be used for other organizations on the same
sector.

Therefore, hopefully that AIB took all the necessary measures to overcome the problems of the
accounting information system after the findings and recommendations.

Furthermore, it can be used as an additional reference material and also can be used as spring
board for other research, who wish to conduct a research in the same area.

1.6. Scope of the Study

Awash International Bank has 430 branches scattered in all parts of the Ethiopia, of which 280 of
them are located city branch and 150 are out line. Due to time and financial constraints this study
was restricted to the assessment on the role of AIS on operational performance in case AIB’s
employees only.

1.7. Definition of terms

❖ Information system: - it’s a combination of hard ware, software, infrastructure and trained
personnel organized to facilitate planning, controlling, coordination and decision making
in an organization.
❖ Accounting information system: - is a system collecting, storing and processing financial
and accounting data.
❖ Operational performance: - firms performance against standard or prescribed indicators
of effectiveness and efficiency in time, productivity and waste reduction. In the content
of this study operational performance refers to the bank’s efficiency and effectiveness in
time, productivity and in the quality of decision making.

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1.8. Research design and Methodologies

1.8. 1. Study design

A descriptive type of study design will be used to examine the role of AIS on operational
performance of AIB. Descriptive designs are those designs which are concerned with describing
the characteristics of individual or group (Kothari, 2004).

1.8.2. Data type and sources

In order to achieve the stated objectives, the relevant data will be collected. The study will use
both primary and secondary sources of data.
1.8.3. Population and sampling techniques
Awash International Bank has three departments that are related to AIS these are finance
department, general manager and MIS department but our main concern will in MIS department.

There are 98 employees in that division. Due to the fact that the total number of the employees in
MIS department is below 100, census method will used. To conduct this research all of the 98
employees were included in the study via census method of sampling.

1.8.4. Methods of Data Collection

This study used both primary and secondary data as these are Important tools for the analysis.
The secondary data was collected from the company’s annual reports, accounting documents,
proclamations and procedures, and other related materials from the company. The primary data
was collected from direct interview and questionnaires. Questionnaires were distributed by
taking 98 employees. Interview was used to obtain relevant data from MIS division manager of
AIB that leads the researcher to get relevant information.

1.8.5. Methods of Data Analysis and Presentation

The data will be collected from the employees and analyzes by using descriptive method of
analysis which is quantitative description of sample from the whole respondents; the process of
the data will be present by narrative paragraph, tables and percentage.

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 1.9. Limitation of the study
In conducting this paper, the researcher would be expected some limitation to conduct the study are:-

- The time allocated for all data collections not sufficient to gather all relevant information.
- The questionnaire method is primarily used to gather primary data. However, the information
might not free personal basis of respondent.
- Some of the respondent might not give response openly and sincerely.
- Especially in the case of data collection there are some respondents are not interested to give
true information that is needed for the study. The reason might be due to the confident of the
information.

- Financial source is insufficient to gather the relevant data in detail.

1.10. Organization of the Study

This paper will be consisting of four chapters. Chapter one, background of the study, statement
of the problem, research questions, objectives of the study, significance of the study, limitation
of the study and research methods used to conduct this paper will be included. Chapter two will
be devoted to literature review. The purpose of this chapter is to make the readers to be familiar
with existing studies relative to the issues covered in the study. It thus provides the theoretical
inference for the study and partly establishes the need and relevance for it. Chapter three dealt
with details analysis of the findings, presentation, and interpretation of data. Chapter four
incorporates the summary of major findings, conclusions, and recommendations.

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CHAPTER TWO

2. LITERATURE REVIEW

2.1. Introduction
This chapter explains the relevant literatures from other researchers who have conducted
research in the same field. It contains opinions, attributes, research outcomes and conclusions
there on from previous research work done by other people and organizations. Section 2.2
discuses about theoretical literature, section 2.3 discuses imperial literature and finally 2.4
discuses about the knowledge gap.

2.2. Theoretical literature

2.2.1. Information Systems

In discussing what information systems are one must first understand what an information is.
Information is more processed data that has meaning and purpose. This gives the information
value for specific persons and meets their particular information needs. Thus, information is a
basic resource that individuals and organizations must have, to survive and succeed in today’s
competitive and dynamic environment. An information system is a set of people, procedures and
resources that collects, transforms and disseminates information in an organization (O’Brien,
1990: 6).

An information system is a set of organized procedures that, when executed, provides

information to support the organization (Lucas, 1994: 17). According James hall (2008: 15),
information system can help to support the stewardship function of management-Stewardship
refers to management’s responsibility to properly manage the resources of the firm. The
information system provides information about resource utilization to external users via
traditional financial statements and other mandated reports.

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Internally, management receives stewardship information from various responsibility reports, to
support management decision making.

The information system supplies managers with the information they need to carry out their
decision-making responsibilities and to support the firm’s day-to-day operations.

The information system provides information to operations personnel to assist them in the
efficient and effective discharge of their daily tasks. Thus, information systems are systems
designed to process data and produce information, which is a vital resource for individuals,
organizations, and the society as a whole.

2.2.2. Accounting Information System

An accounting information system (AIS) is a system that collects, records, stores, and processes
data to produce information for decision makers. An AIS can be a very simple paper-and-pencil-
based manual system, a very complex system using the very latest in computers and information
technology, or something between these two extremes. Regardless of the approach taken, the
process is the same. The AIS and the people who use it must still collect, enter, process, store
and report data and information. The paper and pencil or the computer hardware and software are
merely the tools used to produce the information (Rommey & Steinbert, 2009)

2.2.3. Basic Subsystems in the AIS

Accounting information system is an information system which handles issues related to
accounting in a company or organization. In practice, AIS is divided into several subsystems.
This is because AIS is a fairly complex system (Rommey & Steinbert, 2009). Thus are divided in
to several subsystems, we begin with revenue cycle, which includes sales and revenue in the
form of cash, the expenditure cycle purchasing activities and payment with cash, human resource
or payroll cycle includes the activities of contract and hire employees, production cycle, includes
the process of changing raw material into finished material and financing cycle includes
activities to get data from investors, as well as their payments again. The above cycles will be
elaborate briefly as follows:

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The revenue cycle: is a recurring set of business activities and related information processing
operations associated with providing goods and service to customers and collecting cash in
payment for those sales. The primary external exchange of information is with customers.
Information about revenue cycle activities also flows to the other accounting cycles via the
centralized data base. The revenue cycle’s primary objective is to provide the right product in the
right place at the right time for the right price.

2. The expenditure cycle: - is a recurring set of business activities and related information
processing operations associated with the purchase of and payment for goods and services.

In the expenditure cycle, the primary external exchange of information is with suppliers
(vendors). The primary objective in the expenditure cycle is to minimize the total cost of
acquiring and maintaining inventories, supplies, and the various services the organization needs
to function.

3. The human resources management (HRM) payroll cycle: -is a recurring set of business
activities and related data processing operations associated with effectively managing the
employee workforce. The more important tasks include: - recruiting and hiring new employees,
training, job assignment, compensation (payroll), performance evaluation, Discharge of
employees (due to voluntary or involuntary termination).

4. The production Cycle: - is a recurring set of business activities and related information
processing operations associated with the manufacture of products. It involves activities raw
materials and labor in to finished goods.

5. The Financing cycle: - involves activities of obtaining necessary funds to organization, repay
creditors and distribute profits to investors.

2.2.4. Characteristics of accounting information system

Characteristics of AIS are those features that distinguish an ordinary system from a system that is
designed to provide management of all levels timely, relevant reliable unbiased processed data
that is suitable for decision making. According to Hall (2008), the following are the basic
characteristics of AIS.

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Relevance. The contents of a report or document must serve a purpose. This could be to support
a manager’s decision or a clerk’s task. We have established that only data relevant to a user’s
action have information content. Therefore, the information system should present only relevant
data in its reports.

Reports containing irrelevancies waste resources and may be counterproductive to the user.
Irrelevancies detract attention from the true message of the report and may result in incorrect
decisions or actions.

Timeliness The age of information is a critical factor in determining its usefulness. Information
must be no older than the time period of the action it supports. For example, if a manager makes
decisions daily to purchase inventory from a supplier based on an inventory status report, then
the information in the report should be no more than a day old.

Accuracy information must be free from material errors. However, materiality is a difficult
concept to quantify. It has no absolute value; it is a problem-specific concept. This means that, in
some cases, information must be perfectly accurate. In other instances, the level of accuracy may
be lower. Material error exists when the amount of inaccuracy in information causes the user to
make poor decisions or to fail to make necessary decisions. We sometimes must sacrifice
absolute accuracy to obtain timely information. Often, perfect information is not available within
the user’s decision time frame. Therefore, in providing information, system designers seek a
balance between information that is as accurate as possible, yet timely enough to be useful.

Completeness. No piece of information essential to a decision or task should be missing. For

example, a report should provide all necessary calculations and present its message clearly and
unambiguously.

Summarization Information should be aggregated in accordance with the user’s needs. Lower
level managers tend to need information that is highly detailed. As information flows upward
through the organization to top management, it becomes more summarized. We shall look more
closely at the effects that organizational structure and managerial level have on information
reporting later in this chapter.

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2.2.5. Importance of accounting information system in banking sectors
According to Rahman (2008), the following are the benefits of accounting information system in
the banking industries:

Timely Information- The accounting information system provide business and other users with
timely financial information (financial Report).

This information helps users and business with strategic planning, budgets and other valuable
information for payroll, bank reconciliation and creation of spreadsheet.

• Easy to Use- Raw data are entered directly into computers; the system processes any
calculation, manipulations, reports and reconciliation. The output shows the result as
information in a meaningful manner.
• Internal Control-The accounting information system makes it easier for banks to
establish internal control which help to detect fraud, theft and other mismanagement.
• Decision Making- Data recorded and processed enables computers to yield reports that
aid interested parties in their decision-making process. Most accounting information
system can yield statistics that indicate performance of product or service.
• External Financial Reporting- One of the most important characteristics of accounting
information system is its ability to produce information that helps organizations generates
financial statement. From the accounting information system, one should be able to create
companies balance sheet, income statement, shareholder or owners’ equity and statement
of cash flows.

2.2.6. Functions of accounting information system

The main function of Accounting Information System (AIS) is to assign quantitative value of the
past, present and future economics events. AIS through its computerized accounting system
produce the financial statements namely income statements, balance sheets and cash flow
statement. The system will process the data and transform them into accounting information
during input, processing and output stages that will be used by a wide variety of users such as
internal and external users (Wilkinson, 2000). Wilkinson noted that an effective Accounting
Information System (AIS) performs several key functions throughout these three stages such as

11
data collection, data maintenance, data Accounting Information Systems (AIS) and Knowledge
Management; data control (including security) and information generation.

Benefits of accounting information system can be evaluated by its impacts on improvement of

decision-making process, quality of accounting information, performance evaluation and
facilitating company’s transactions (Wilkinson, 2000).

2.2.6.1. Accounting Information System and Organizations

An accounting information system in organization is a structure that business uses to collect,
store, manage, process, retrieve and report its financial data so that it can be used by accountants,
consultants, business analysts, mangers, chief financial officers and auditor. Virtually all
organizations-from business and government agencies to hospitals, educational institutions and
churches-have an accounting information system. Among these groups, the accounting
information systems of business organizations tend to be the most highly developed and
innovative.

However, many of the same concepts, techniques, and principles are equally applicable to
accounting information systems in other kinds of organizations (Porter & Miller, 2002).

The modern business organization served by the accounting information system is a very
complex institution. Such an organization may employ thousands of people in tasks ranging from
the development and engineering of new products to the management of a large sales force. The
activities of prominent companies are of interest to many segments of society-customers,
suppliers, employees, lenders, stockholders, and the various government under whose
jurisdiction they operate (Taddesse, 2015)

How can the modern business organization plan, coordinate, and control the multitude of
activities that it under takes? How can it supply information to the many people and institutions
that are interested in its activities? The accounting information system plays a vital role in
accomplishing these tasks. It is useful to examine accounting information systems from the view-
point of users who utilize accounting information as a basis for making decisions.

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There are two basic categories of such users- those external to the business organization and
those internal (management). External users are many and varied. Their needs are met to some
extent by the publication of general-purpose financial statements, such as the income statement
and balance sheet (Romney, 2001).

2.2.6.2. Accounting Information System and Decision

Decision making is a process of selecting an alternative action using evaluation process. Making
an effective decision is necessary when there is no clear action to follow. AIS’s can be a tool to
produce effective information which can be used for decision making.

The term of decision making has been explained differently by different scholars. Harris (2009)
stated that decision making involves an act of identifying and selecting among an array of
alternatives based on the inclination. A manager in an organization is suitable and capable of
making effective decision.it is all about the right choice of an alternative course of action
(Chabra, 2005).

Managers strategically involved more hands and more talents in approaching organizational
functions and objectives (Weddle, 2011.)

AIS is consisted of various operating functions which gather financial data, process it, categorize
it and report financial events to supply for internal decision makers with information that
relevant to their needs (Kharuddinet al, 2010).

An organization is held together by its information network, the acquisition, use retention and
transmission of information one of the primary network members in an organization is its
accounting information system. The AIS summarizes and filters the data available to decision
makers. By processing the data, the AIS influence organizational decisions. The extent of
influence depends on the types of processing the AIS programs.

The source is the organizational environment from which the data is collected by the AIS. This
data is used to make inferences concerning decisions values are used to make a choice among
alternative course of action. Action and outcome follow the actual decision.

13
The four classifications of data bank predictive decision making, and decision taking on the
number of steps the AIS rather than a human decision maker performs. The more steps
performed by the AIS, the more assumptions are built into the system and the greater the
system’s influence on organizational decision making (Dugasa, 2007).

2.2.6.3. AIS and Financial Performance

The AIS design can be defined in terms of the information characteristics that it provides
(Chenhall, 2003). Chenhall (2003) described AIS according to the perceived usefulness of four
information attributes, namely scope, timeliness, level of aggregation, and integration. Scope
refers to the measures being used and to the extension of AIS in time and space. Then
information could focus on future vs. historical events or external vs. internal events. Also the
information could be quantified in monetary or non-monetary terms.

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 (Boulianne, 2007). Financial managers need the financial and
accounting data provided by AIS to evaluate the firm’s past performance and to map future
plans.

Therefore, the organizational performance is measured in terms of ROA (Return on Assets) and
ROE (Return on Equity) these ratios are financial performance measuring ratios (Majeed, 2011).

If AIS design can be linked to financial performance and financial performance is linked to
organizational performance, then we can argue that AIS design can be expected to have positive
effects on organizational performance

2.2.6.4. AIS and performance measures

Existing literature offers scant evidence of the relationship between these AIS and performance
measures; though it is important to highlight the study made by Ismail and King (2005) which
discovered a positive association between AIS alignment and SME strategy and performance
measures. In the Spanish case, Naranjo-Gil (2004) posits an indirect relationship between AIS
and firms’ performance via the varying strategies that may be adopted by companies.

14
Thanks to investment in AIS, the scope for action is expanded, thus providing time saving in
trips to and dealings with banks, the Administration, etc. This reduces firms’ costs. Productivity
increases when these innovations are properly used. Insofar as a firm’s culture is open to the
introduction of new accounting information systems. This will lead to a more holistic view of it
and make for greater flexibility and dynamism in organizational search for improved results.
Despite of some authors who postulate that the direction of the cause-effect relationship is only
that companies achieve a high performance when they can afford the implementation of certain
technological developments (Damanpour and Gopalakrishnan, 2001). Others indicate that firm
performance drops just after the implementation, taking several years to realize the benefits from
IT adoptions (Wah, 2000). There are several researches works, which, in the widest sense, have
studied relationships between performance indicators and IT, and how IT impact on firm
performance achieving inconclusive results.

Despite of some authors who postulate that the direction of the cause-effect relationship is only
that companies achieve a high performance when they can afford the implementation of certain
technological developments (Damanpour and Gopalakrishnan, 2001). Others indicate that firm
performance drops just after the implementation, taking several years to realize the benefits from
IT adoptions (Wah, 2000).

There are several researches works, which, in the widest sense, have studied relationships
between performance indicators and IT, and how IT impact on firm performance achieving
inconclusive results. There are studies which obtain a positive relationship between investment
in IT and economic profitability, financial profitability and value added (Menachemi et al, 2006).

Other research shows that no clear relationship exists between this type of investment and the
performance indicators. (Dibrell et al, 2008).

Their authors argue that, currently, IT are readily available and using them gives no competitive
advantage for achieving improved results (Powell and Dent- Micallef, 1997). Similarly, they
maintain that many firms have invested in IT but they do not succeed in attaining the established
performance goals.

15
Although research on the IT-performance ratio is more abundant in large-sized firms, the
analysis of the impact on smaller-sized ones becomes particularly important because investment
in these technologies may give them a competitive advantage and the chance to position
themselves to achieve better results since they are more flexible and have better response
capability (Pérez et al, 2010).

In Spain, in most sectors, there is a generalized opinion that using information technologies has
been decisive in expanding the business market and in saving commercial management costs.
Given that AIS are a basic component derived from technologies in general, the main issue is
whether applying accounting information systems contributes to firms’ improving their results.
For this reason, and in view of the scarcity of studies on the subject, this article focuses on
analyzing whether there is any relationship between economic and financial profitability and
how much AIS are used in bank and fiscal management in Spanish SMEs.

2.2.6.5. AIS and productivity

Once the literature had been reviewed, there is a dearth of articles researching on the relationship
between AIS and productivity.

When the search was extended to publications relating productivity and IT, many studies support
the theory that their proper use increased firms’ productivity and, thus, had a decisive influence
upon wealth and growth in a country (Sánchezet al, 2004). Nevertheless there is a wide range of
publications on the relationship between IT and productivity.

There are studies that analyses the IT impact on company’s productivity and obtain results that
have led to the so- called “productivity paradox” (Hitt and Brynjolfsson, 1996). This hypothesis
states that firms adopting IT innovations do not seem to experiment significant increases in their
financial performance, as productivity gains are translated into benefits to customers. However,
non-adopting firms may suffer from productivity decreases due to the competition from their IT-
adopting counterparts.

16
2.2.7. AIS Effectiveness
Past research in information systems has defined system effectiveness in terms of “user
information satisfaction” or perceptions of system users about the extent to which the
information system available to them meets their information requirements. Given the lack of
objective, systematic indicators of information systems effectiveness that might suggest the
potential impact of a system on organizational performance, user information satisfaction has
been generally accepted as a surrogate for utility in decision-making. Accounting information, in
general, has been categorized into two primary types: (a) decision-influencing information that is
mainly used for organizational control and (b) decision-facilitating information that is mainly
used for organizational coordination. The whole set of “information usefulness” studies in
accounting draws on a common base of information concepts that were originally developed to
capture report users’ reactions to qualitative characteristics of accounting information. AIS
effectiveness, therefore, is defined in this study in terms of the perceptions of decision-makers
that the output information available to them through transaction processing, management,
reporting, and budgeting systems meets their requirements for organizational coordination and
control (Onaolapo & Odetayo, 2012).

2.2.8. AIS Integration

At the operational level, AIS integration is defined in terms of the following two characteristics:
(a) the degree of integration in internal AIS applications and (b) the degree of integration
between inter organizational systems and the internal AIS applications. Accounting systems are
primarily influenced by contextual factors that affect accounting processes for transaction
processing, reporting, internal control, process monitoring, and performance evaluation. These
characteristics can capture the range of potential contextual influences.

The integration of AIS applications was measured by the extent of standardization in coding
schemes and by the extent to which application systems adhere to standard coding schemes.
These two items were developed in this study and were based on the operational concept of data
integration, which refers to “the use of common field definitions and codes across different parts
of the organization” (Nicolaou, 2000).

17
2.2.9. The Relationship between AIS Integration and AIS Effectiveness
AIS integration has been defined above as a system design state that influences the ability of the
system to provide output information that can be effectively used to respond to OCC
requirements. At the conceptual level, therefore, AIS integration is related to AIS effectiveness.
Increased system integration has been suggested to improve communications both within and
across organizations. The relationship between the use of integrated systems and user evaluations
of “task-technology fit”, that is, the degree to which a technology assists an individual in
performing his or her portfolio of tasks. Electronic integration among inter organizational and
internal information systems has also been reported to have a significant association with a
perceptual measure of user information satisfaction and an objective measure of shipment
discrepancy reduction in the automotive industry. In conclusion, system integration is shown to
be an important construct in past research. Accounting systems are primarily influenced by
contextual factors that affect accounting processes for transaction processing, reporting, and
process monitoring and performance evaluation (Nicolaou, 2000).

2.3. Empirical literature

Organizational performance is represented mainly by quantitative financial indicators. Most
organizations operate in an uncertain and volatile environment probably affected by internal and
external variables. Internal determinants are also sometimes called microeconomic determinants
or inherent performance, while external determinants are variables that reflect economic and
legal environment in which the organization operates.

Many studies have attempted to explain the contribution of accounting information system on the
performance of an organization.

It should be noted that very often, the authors found different results.

2.3.1. Empirical evidence from other countries

Hunton (2002) investigated the relationship between automated accounting information system
and organizational effectiveness.

18
He showed that there was strong relationship between accounting information system and
organizational effectiveness. To compare Accounting Information System Chang, Y. W. (2001)
studied the nexus between organizational strategies and performance.

They found out that 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 (Chang, 2001).

Malcolm (2014), the study focused on measuring the alignment of AIS Requirements and
Incapacity among small and medium sized enterprises (SMEs) in Malaysia and then investigated
the link between AIS Alignment and non-financial performance. The result of this research is
expected to help SMEs to understand the importance of AIS alignment to achieve non-financial
performance. AIS alignment is influenced by several factors such as: organizational
characteristics, owner commitment, and organizational strategies that affect SMEs performance.

Oluwatolani et al. (2011) the study focused on the impact of information technology in Nigeria’s
banking industry this study presents the current trend in the application of IT in the banking
industries in Nigeria and gives an insight in to how quality banking has been enhanced via IT.

The paper further reveals that the deployment of IT facilities in the Nigerian banking industry
has brought about fundamental changes in the content and quality of banking business in the
country. This analysis and clarification of how Nigerian banks have used IT to reengineer their
operation is detailed through literature review and observation. Three categories of variables that
relate to the use and implementation of of information technology devises were considered in
this paper.

This includes the nature and the degree of adoption of innovative technologies; degree of
utilization of the identified technologies: and the impact of the adoption of IT devises on the
bank operations.

2.3.2. Empirical evidence in Ethiopia

Kedir (2013) studies the current extent and practices, benefit realized by bank, deriving forces,
opportunities and challenges for the adoption of accounting information system.

19
The researcher has used explanatory research design to conduct this study and both primary and
secondary qualitative data were collected for the purpose of this study. Also, the collected data
was analyzed by using descriptive analysis. Among the finding of this research present of
accounting system should be changed to fully computerized. Manual system is time killing,
needs more man power and increase cost incurred. But a computer simplifies operation, time
saving and cost minimizing.

So, it is advisable to change the accounting information system to fully computerized system
and also conclude that there are good opportunities for adoption of accounting information
system in Ethiopia

Taddesse (2015) examined the investment on accounting information system (IAIS) effect on
private commercial bank performance in Ethiopia. The researcher was concluded that Using the
latest Accounting software lead each private bank to report good performance on Asset and
equity category due to increase the investment output. Regarding productivities the aspect on
accounting information system software availability, the banking industry still cannot meet up
with the demands of the users because they may not be accurate and timely.

The technology of software needs further research and development in order to accurately and
timely meet the needs of the users, the researcher also added the value invested on infrastructure
may increase the banks capacity of being approached to its customers and expand its size to get
market share from the competition (investing on computers, ATM Machines, POS, servers,
networks, electronic banking and related). Howe ever quality of service to customers was
compromised and ignored due to implementation of inappropriate software.

2.4 Empirical gap

Most studies indicate that the adoption of AIS can bring efficiency and effectiveness in decision
making and the overall organizational performance of an organization that means AIS can lead to
profitability. Many studies in Ethiopia have attempted to explain the contribution of a particular
variable on the performance of banks of Ethiopia.

20
However, there is no enough study that is conducted to see the role of operational performance
on banks of Ethiopia especially in AIB. This study aims to fill the gaps in the literature focusing
on the role of AIS on operational performance in AIB.

21
CHAPTER THREE

3. Research Design and Methodology

3.1 Introduction
This chapter discusses the methodologies of the study, sampling techniques, instruments and
procedures of data collection, and methods of data analysis.

There are two types of research strategy. They are qualitative and quantitative research.
Quantitative research is ‘objective’ in nature. It is defined as an inquiry into a social or human
problem based on testing a hypothesis or a theory composed of variables, measured with
numbers and analyzed with statistical procedures. (Naoum, 1998) Therefore this research method
can be achieved through questionnaires, surveys etc. In the most general terms, quantitative
research does three main things, which are, it conceptualizes reality in terms of variables, it
measures these variables and it studies relationships between these variables (Punch, 2014).
Collecting data for quantitative can be time consuming as the sample size is usually greater
compared to qualitative, but analysis is usually easy as it is mostly straightforward and repetitive
compared to qualitative. The other type of research strategy is qualitative research. Unlike
quantitative, qualitative is subjective in nature. It emphasizes meanings, experiences,
descriptions and so on. This can be achieved through interviews, attitudinal surveys and so on.
Where the questions are designed to be more general or explanatory answers. Conducting a
qualitative research is believed to be more challenging than quantitative research especially if it
needs to be done in a shorter span of time. As a matter of fact, qualitative research is an in-depth
study which needs to be done slowly to absorb and explore to the depth of its core, revealing new
theories.

22
Moreover, unlike quantitative research, qualitative research is multidimensional and pluralistic
with Respect to paradigms (Punch, 2014). Beside these two types, nowadays it is very common
to find researchers using mixed method. This research method is a combination of both
qualitative and quantitative methodologies. It is believed that adopting a mixed method approach
has the advantage of gaining a stronger research design and achieving more valid and reliable
findings. Moreover, it is recognized that adopting a mixed method strategy can Compensate the
weakness and strengths of both qualitative and quantitative research approach. For example,
quantitative research is well known for conceptualizing variables and using large representative
samples, while qualitative approach has the strength to reveal the in-depth meaning and explore
the context with smaller samples (Punch, 2014). Therefore, by combining the strong areas of
these two methods can help to give a strong logic to an underlying rationale. The mixed method
is further classified into 4 major design methods. The first one includes a qualitatively driven
core component and a quantitative supplementary component, where the core and the
supplemental components are conducted sequentially. The second type is a quantitatively driven
core component and a qualitative supplementary component, where the core and the supplement
components are conducted sequentially. The third type of design consists of a qualitatively
driven core component and a quantitative supplementary component where the core and the
supplementary component are conducted simultaneously. The next type of design is qualitatively
driven core component and a quantitative supplementary component, where the core and the
supplemental components are conducted simultaneously (Clark & Creswell, 2008). In other
words, mixing of qualitative and quantitative can formulate triangulation designs, which can
either be sequential or simultaneous. As a matter of fact, using triangulation method would
involve the use of multiple methods to examine the same dimension of a research problem (Clark
& Creswell, 2008). Even though many researchers have praised mixed method, some avoid
doing it because following a mixed method research can be costly and time consuming.

23
3.2 Research Method
The methodology will employee in the thesis is quantitative and qualitative method. With this
method descriptive type of research is applied.

Descriptive research is known as statistical research, descriptive data and characteristics about
the population or phenomenon studied. Descriptive research answers the questions who, what,
where, when and how (Yen, 1994). The description is use for frequencies, averages and other
statistical calculations.

3.3 Data Source and Data Collection Instrument

Questionnaire and interview were used to collect data in the study. The supportive staffs

were the main utilizers of instructional materials? The main managers, vice managers and group
coordinators the facilitators to supply appropriate instructional materials needed in the work
environment. The success and failure of instructional materials management is in the hands of
finance and property administration support process owners and supportive staffs. In this
connection a set of questionnaires consisting of close and open ended, and also interview items
were prepared.

A. Questionnaires

Bothe open ended and close ended questionnaires were prepared.

B. interview

As cited by Bruce (2001), many scholars including Denzin (1978), Spradley (1979) and Patton
(1980) define interview as simply as a conversation with a purpose. Specifically, the purpose is
to gather information. Accordingly, though the manner of interviewing is much debated than its
meaning, its core purpose is to gain relevant information as perceived significant by the
researcher from the stand point of the research objective. This study has used a semi standardized
interview in order to gather a deeper understanding from the respondent’s perspective.

24
Bruce (2001) noted that questions in such kind of interview are typically asked in a systematic
and consistent order, but the interviewers are allowed freedom to digress; that is, the interviewers
are permitted (in fact expected) to probe far beyond the answers to their prepared and
standardized questions.

25
CHAPTER FOUR

4. DATA ANALYSIS, PRESENTATION AND INTERPRETATION

4.1. Introduction
This chapter deals with data presentation, analysis and interpretation. The analysis was based on
data collected from documents of Awash international bank and from primary data collected by
questionnaires and by holding interviews with staff at various management levels whose day to
day activities 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 98 employees of Awash International Bank who have direct
work relationship with MIS department. A total of 98 questionnaires were distributed. Out of
which 88 respondents have completed and returned the questionnaires,

4.2. Characteristics of the Study Population

Table 1:Sex distribution of the respondents

Gender Frequency Percent

Male 72 81.82

Female 16 18.18

Total 88 100

Source: Own survey (2020)

Table 1 presents the gender distribution of the respondents. The survey showed that there were
more male when compared to females. Male respondents represent 81.82 and 18.18 percent were
female.

Table 2:Educational background of the respondents

26
 Frequency Percent

Educational level

Diploma 0 0

BA and BSC degree 65 73.86

MA and above 23 26.14

Total 88 100

Source: Own survey (2020)

Table 2 shows the educational back ground of the respondents. Accordingly, there were no
diploma holders in MIS department, BA/BSC degree holders represents 73.86 percent and finally
MA and above holders were 26.14 percent. The fact that majority of the sample employees hold
BA/BSC degree, indicates that sample employees have a good educational level so it has helped
to get better information.

Table 3:service years

Years Frequency Percent

0-1 year and below 6 6.82

2-5 25 28.40

6-10 33 37.50
11-15 16 18.18

16 and above years 8 9.10

Total 88 100%
Source: Own survey (2020)

27
Table 3 presents the years that the respondents have stayed in the organization. Accordingly,
6.82 percent of the respondents have served 1year and below, 28.40 percent of the respondents
have served 2-5 years, 37.50 percent of the respondents have served 6-10 years, 18.18 percent of
the respondents have served 11-15 years and the remaining 9.10 percent have served 16 and
above years. As far as the distribution of service year of the respondents is concerned, most of
the respondents have stayed in the organization for 6-10 years and fewer of them have also
stayed for 0-1 year. This indicates that most of staff has stayed longer in the company so this
helped the paper to get more information about the company.

4.3. Questions related to the study

4.3.1. Employees’ awareness on the use and implementation of AIS

Table 4:Awareness of the use and implementation of AIS.

Question Responses Frequency percent

How do you rate the High 57 64.76

awareness of Awash
Medium 25 28.41
International Bank
Low 1 1.14
management about the use
and implementation of No opinion 1 1.14
accounting information
system? Missing 4 4.55

Total 88 100%

Source: Own survey (2020)

Nearly half of the respondents (64.76%) fully confirmed that; there is high awareness of AIS in
use and implementation, 28.41% of them confirmed that the awareness about use and
implementation of AIS is medium, where as 1.14 % of the respondents feel there is a little
awareness and finally 1.14 % had no saying about the awareness about use of AIS and

28
implementation. This suggests that; awareness about use and implementation of AIS is better but
there are still some works that have to be done to make the employees know about the use of
AIS.

4.3.2. The use AIS

Table 5:The use of AIS for operational performance.

Question Responses frequency Percent

How helpful has AIS Very much helpful 63 71.60

to your business in
Helpful 19 21.61
operational Not helpful 1 1.14
performance? No opinion 0 0
Missing 5 5.65
Total 88 100%
Source: Own survey (2020)

When we come to the extent of helpfulness of AIS on operational decisions, 71.60% of the
respondents replied that AIS is very much helpful for operational decisions, 21.61% have
answered helpful and the remaining 1.14 % did not think AIS is helpful for operational decision,
so this shows that AIS have great role for operational decisions.

3.3.3. AIS effectiveness

Table 6:AIS effectiveness for operational decision

Question Responses frequency Percent

Accounting information Strongly agree 61 69.31
system is used by Awash Agree 21 23.86
International Bank Disagree 1 1.14
effectively for operational Neutral 1 1.14
Strongly disagree 0 0
decisions.
Missing 4 4.55
Total 88 100%
Source: Own survey (2020)

29
As it can be seen from table 69.31% of the respondents strongly agree on the use of AIS for
effective operational decisions, 23.86 % of them simply agree, 1.14% of the respondents
disagree and finally 1.14 % were neutral. The majority of the respondents strongly agree with the
use of AIS effectively for operational performance.

4.3.4. The effect of AIS on the quality of decision making

Table 7:The effect of AIS on the quality of decisions of AIB

Question Response frequency percent

In your opinion how do Increased the quality 79 89.76

you evaluate the effect of
Decreased the quality 0 0
accounting information
Not change its quality 0 0
system on the quality of
decision for your Not sure 1 1.14
organization? Missing 8 9.10

Total 88 100%

Source: Own survey (2020)

The majority of the respondents, to the extent of 89.76 % confirmed that AIS increased the
quality of decision making and 1.14 % of the respondents replied that they are not sure about any
change. This indicates that AIS has big role in 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.

30
4.3.5. Skill gap

Table 8:Attitude towards the existence of skill gap

Question Response frequency percent

Does skill gap exist Yes 69 78.41

between different
No 3 3.41
levels of
Don’t know 9 10.22
management in
Missing 7 7.96
Awash International
Bank? Total 88 100%
Source: Own survey (2020)

The majority of the respondents, to the extent of 78.41% agree that there is a knowledge gap
between different levels of management, 3.41 % of the respondents do not agree and the
remaining 10.22 % don’t know about the existence of skill gap between different levels of
management. Therefore, it is fair to say that skill gap exists between different levels of
management of the organization.

3.3.6. Attitude towards the standard service provided by AIS over the past year
Table 9:Services provided by AIS over the past years.

Question Response Frequency percent

How do you rate the Have improved 53 60.22
standard services Have improved a little 17 19.32
provided by AIS over Have deteriorated 0 0
the past years? Have not changed 0 0
Do not know 8 9.10
Missing 10 11.36
Total 88 100%

Source: Own survey (2020)

31
Table 9 shows 60.22% of the respondents were in agreement with, the standard services provided
by accounting information system have shown improvement, 19.32 % of the respondents
understand that the contribution made by AIS over the last years have improved a little and 9.10
% of the respondents replied that they don’t know about the improvement of AIS in the
organization. From the above table 10 shows that the roles of AIS in providing the standard
services is showing improvement from the past year.

4.3.7. AIS problem that exists in AIB

Table 10:existence of problem in AIB

Question Responses frequency Percent

Is there accounting Yes 54 61.36

information system
No 11 12.50
problems existed in
Awash international Don’t know 13 14.77

Bank? Missing 10 11.37

Total 88 100%

Source: Own survey (2020)

Almost more than half of the respondents (61.36%) agree with the existence of AIS problems in
the organization, 12.50% of them disagree and 14.77% have no idea about the existence of
problems. This shows there is AIS problem that existed in the organization.

32
Table 11: the kinds of AIS problems existed in AIB

Question Response frequency Percent

If the answer of Q11 Delay in process 49 55.69

is yes, what are the
Delay in communication 10 11.36
accounting
Misunderstanding 19 21.59
information system
problems existed in Data redundancy 0 0
Awash international Inconsistency 10 11.36
Bank?
Total 88 100%

Source: Own survey (2020)

Out of the 59 respondents that have replied positively about the problems of AIS that existed in
the organization, 55.69% have replied that there is delay in pocess,11.36% delay in
communication, 21.59% in Misunderstanding, 11.36% in inconsistency. This show that there is
delay in process and a slightly lower misunderstanding.

3.4. Analysis of Interview

In order to aid the research, the information was gathered by the way of interview from Awash
International Bank staff. The AIS issues were raised during the interview in order to make
valuable discussion on the study. The followings are essential points that gathered through the
interview: -

1. The component parts of Awash international bank AIS. The main component parts of Awash
International Bank AIS is flex cube software under this software we can find teller module
(where checks and deposits are withdrawn) accounts report, accounts checking and accounts
audit. There are benefits of flex cube software such as:
• Sustain growth and ensure continuous improvement
• Achieve a rapid return on investment, usability and ownership

33
 • Reduce the cost and time of implementation with reusable methodologies, standards, and
best practices
2. The main inputs of AIS Awash International Bank. The main inputs of AIS Awash
International Bank are transactions such as: Foreign transactions, ATM transactions,
purchase, Deposit, withdrawals, Salary payment, Maintenance, Closing entry.
3. In Awash International Bank all related departments work integrated using one IT server
which organization’s information is settled and also all departments are networked with IT,
so the possibility for misunderstanding is less. Because of low misunderstanding the
possibility of conflict is also low.
4. AIS have enhanced the quality of decision making and the overall performance of Awash
International Bank.

34
CHAPTER FIVE

5. SUMMARY, CONCLUSION ANS RECOMMENDATION

5.1 . Summary
Now days the business world is changing at a faster and faster pace. The reasons given for this is
globalization, high IT investments and the rapid pace of technological change in combination
with increasing costs of research and development. The role of Information Technology (IT) has
shifted over the last decades to become an important part of how companies manage and control
their resources. Organizations are responding in different ways, and at different rates to the wide
range of IT based opportunities and pressures. Decisions regarding the building of technical IT
architecture should be closely linked to decisions made in designing the IT organization that
should be linked to the organizational design of the company itself. As a result, information
technology plays a critical role in modern business, especially regarding the accounting function.
IT have radically transformed the nature of business and accounting practice. There are number
of researches in the world that have shown accounting information system adoption does
increase a firm’s performance, profitability and operations efficiency. The study aimed to fill the
gap by assessing the role of accounting information system on operational performance in AIB
by using primary and secondary data as a source of data and used census method and distributed
98 questionnaires in MIS department of AIB, 88 of them were returned. The following are the
finding of the respondents: -

❖ The result reveals that, 6.82 % of the respondents have served 0- 1year and below,
28.48% of the respondents stayed 2-5 years, 37.50 % of the respondents have been in
the company 6-10 years, 18.18 % of the respondents have served 11-15 years and the
remaining 9.10 % have served 16 and above years
❖ All most more than half (64.76 %) of the employees confirmed that the awareness about
accounting information system is high

35
 ❖ The study shows 71.60 % of the respondents agree that AIS is very much helpful for the
organization’s operational performance.
❖ The study reveals that, 69.31 % of the respondents strongly agree with the fact that AIS
is used effectively for operational decision.
❖ The study shows that, 89.76% of the respondents confirmed that increase the quality of
decision for the organization using AIS.
❖ Of the respondent of 78.41 % there is a skill gap between different levels of management.
❖ The study shows that 60.22% of the respondents agree with the standard service provided
by AIS over the past years have shown improvement.
❖ Almost more than half (61.36%) of the respondents confirmed the existence problem of
AIS in the organization.
❖ From the 55.69 % of the respondents that were in agreement with the existence of AIS
problem in AIB, majority of the respondents believe that there is a problem of delay in
communication

5.2. Conclusion
Based on the main findings, the following the following conclusions are forwarded by taking the
objective of the research under consideration.

❖ A vital role of the AIS is to supply internal decision makers with information that relevant
to their needs. AIS have a major contribution to the organization’s operational
performance.
❖ Accounting information system is vital to all organizations in decision making, in
improving efficiency and so on. Every organization either profit or nonprofit-oriented need
to maintain AIS.
❖ In our case, there is a skill gap on the use of AIS between different levels of management,
this gap is created due to lack of system experience, lack of proper training, lack of interest
and lack of information about the system.

36
 ❖ The quality of decisions in the organizations is highly affected by AIS which in turn affect
the organization’s operational performance. In our case, AIS increased the quality of
decision making.

5.3. Recommendation
Based on the findings, in order avoid or possibly reduce the problem existing in accounting
information system and operational performance some recommendations suggested like:

❖ To increase the awareness of the employees about AIS and the minimize the skill gap in
the company, time to time Awash International Bank should provide short term training
and technical support.
❖ In order to provide good quality of decision, Awash International Bank should increase
the performance of AIS. For example, by introducing latest AIS software like CASH
BOOK and TEMENOS T24
❖ In order to reduce the problems like delay in process, inconsistency, AIB needs to
properly update the system and increase experienced personnel.

37
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Chenhall, R.H. (2003). Management control systems design within its organizational
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APPENDIX
Rift Vally UNIVERSTY

Department of accounting and finance

Appendix A

Questionnaire
The purpose of Questionnaire is to collect data and information on the role of Accounting
Information system on operational performance of Awash International bank for the requirement
of bachelor degree in Accounting and finance.

Instructions:-

✓ Please use a () mark in the appropriate box to indicate the answer
✓ Please write a short and precise answer for open-ended questions
✓ Multiple selection is possible among the choices
1. Gender
Male Female
2. Educational Background
Diploma BA/BSC degree MA degree and above

If other please specify ________________________________

3. How long have you been in Awash International Bank

41
1& below 2-5 6-10 11-15

16 and above

4. How do you rate the awareness of AIB management about the use and implementation of
Accounting Information System?
High medium low No opinion
5. How helpful is Accounting Information System to your business in operational performance?
Very much helpful Helpful Not helpful No opinion
6. Accounting Information System is used by Awash International bank effectively for
operational decisions?
Strongly agree Agree neutral disagree strongly
disagree
7. In your opinion, how do you evaluate the effect of Accounting Information System on the
quality of decision of your organization?
Increased the quality No change at all
Decreased the quality not sure
8. Does skill gap exist between different levels of management in AIB?
Yes No don’t know
9. How do you rate the standard services provided by Accounting Information System over the
past years
Have improved Have improved a little Have not changed
Have deteriorated do not know
10. Is there Accounting Information System problem existed in Awash International bank?
Yes No I don’t know
11. If the answer of question 12 is yes, what are Accounting Information System problems
existed in Awash International bank?
Delay in process Delay in communication
Misunderstanding
Data redundancy Inconsistency

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 If other, please specify _______________________________________________
12. If you have any other comment_______________________________________________
________________________________________________________________________
________________________________________________________________________

Thank you!!!

Appendix: B
Interview questions
1. What are the component parts of Awash International Bank Accounting Information
System?
2. What are the main inputs of Accounting Information System of Awash International
Bank?
3. Did Accounting Information System help strength your business skills in the last years?
Yes/No
4. Are all related departments of the organization work integrated using accounting
information system?
5. What benefit you get from the use of AIS? In case of record keeping, decision making
and performance evaluation etc.?
6. Has AIS been a source of conflict during the last years? Yes/no
7. Did AIS help your organization for operational decision? Yes/No
8. If you have any other comment?

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