THE IMPACT OF ACCOUNTING INFORMATION SYSTEM ON

THE PERFORMANCE OF BANKING SECTOR IN NIGERIA

(A CASE STUDY OF FIRST BANK OF NIGERIA PLC)

BY

EDOKHAMHEN OSETOHANMHEN DESTINY

MAT NO: MGS0710095

BEING A PROJECT WORK SUBMITTED TO THE

DEPARTMENT OF ACCOUNTING,

FACULTY OF MANAGEMENT SCIENCES,

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR

THE AWARD OF BACHELOR OF SCIENCE DEGREE IN
ACCOUNTING

UNIVERSITY OF BENIN,

BENIN CITY.

DECEMBER, 2012
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 DECLARATION

I, EDOKHAMHEN OSETOHANMHEN DESTINY with matriculation

number MGS0710095 hereby declared that, apart from the references

made to other people’s work, which has been fully acknowledged, the

entire work is a product of my research.

………………………………….…………
EDOKHAMHEN OSETOHANMHEN DESTINY

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 CERTIFICATION

We, the undersigned, hereby certified that this project work was carried

out and completed by EDOKHAMHEN OSETOHANMHEN

DESTINY, with matriculation number MGS0710095 in partial

fulfillment of the requirement for the award of the bachelor of science

degree in accounting in the university of Benin, Benin city.

…………………………
……………………

DR. A.O ENOFE Date

(PROJECT SUPERVISOR)

……………………………… ……………………

DR. JAMES O. ILABOYA Date

(PROJECT COORDINATOR)

……………………………… ………………..

DR. A.O ENOFE

(H.O.D ACCOUNTING DEPT) Date

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 DEDICATION

This project work is humbly dedicated to my heavenly father without

whom nothing is possible, and, also, to my beloved parents, my younger

brother (THANKGOD), and my indispensable uncle (MR MONI MIKE

ITUA MODESTY), for their great moral and financial contribution to

my educational pursuit. Also, I specially dedicate this work to my

heavenly Mother MARY for her continuous prayers throughout my

academic struggle. All glory and honor be unto

GOD THE FATHER

GOD THE SON, AND

GOD THE HOLY SPIRIT

For their inspiration.

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 ACKNOWLEGEMENT

Honour they say must be given to whom honour is due. Base on this, I
humbly wish to thank GOD ALMIGHTY for allowing my dreams of
becoming an educated person in the society come through. All glory and
honour be unto you Father almighty for this great thing .you have done
for me and the ones you are yet to do. I am indeed very grateful!

God will never forgive me if I fail to express my profound

gratitude to my wonderful and indispensable uncle (MR. MONI MIKE
ITUA MODESTY) and his lovely wife( MRS MONI OMOYE) for
their wonderful contribution and encouragement to seeing me succeed
in life. Uncle mike, just as the steadfast love of the LORD never ceased,
your glorious blessing and upliftment in life from the almighty GOD
will never come to an end in JESUS NAME, AMEN. Uncle mike, you
are a rare gem made of precious worth, and, also you are more than
gold. Though, I don’t have what it takes to reward you for your kindness
to me, but, my God who sees and lives in heaven will forever continue
to shower his abundant blessings upon you wherever you go. I am very
grateful.

Also, my appreciation goes to my lovely parents and my younger

brother for their moral encouragement. Not left out are my other
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wonderful uncles in the person of mr Daniel for his encouragement and
prayer towards the success of my education. Also, to mr moni matthew
for his encouragement. Not left out is my beloved uncle Peter
Edokhamhen for his contribution and encouragement right from my
childhood, you have been there for me even when the world actually
thought it was over for me. I am indeed grateful to you all.

My special appreciation also goes to MAMA FLORENCE, who

actually proved to be a wonderful mother to me and for her constant
encouragement and always reminding me of GOD’s divine love for me.
Mama, I will forever be grateful to you and I love you all so much. May
the almighty GOD continually bless you and your entire household in
JESUS NAME, AMEN!

My gratitude also goes to my wonderful friend FESTUS IYERE

who has been more than a brother to me these years. Guy, it pays to be
good and you have demonstrated that to me, no wonder GOD has not
turn his eyes away from you. I pray that the almighty God should
continually move you higher and higher in JESUS NAME, AMEN. I
also sincerely appreciate miss Promise Iyenahie who has been more than
a friend to me. I appreciate you all. I also acknowledge my lovely aunty
Winifred omonigho for her encouragement. Not left out are my special
friends such as: okoro Judith, Clifford otuya, simeon urowayino,
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igbenedion bridget, idehen victor, mr bona Solomon who has been a
source of inspiration to me, elfreda yemi, and every other persons too
numerous to mention for their contributions, I am indeed very grateful.

I will not forget to express my profound gratitude to my present

Head of department of accounting, university of Benin, who I am so
privilege to have as my project supervisor, and who, despite his tight
schedule still gave his time and energy to painstakingly and
meticulously reviewed my work so as to bring out the best in me and my
work. Sir, you are a real model for younger generation like us to
emulate. God bless you and may he continuously give you the grace to
lead the department of accounting and uniben at large to an enviable
height. I appreciate you so much sir. I also express my gratitude to all
the lecturers whom I am so privileged to under go their tutelage, I say
may God bless you all. To my project coordinator, james o. Ilaboya,
may God bless you for been the model that you are to me. To all my past
lecturers in auchi polytechnic, I sincerely thank you all for the good
foundation you have laid in my life academically. May God bless you all

Finally, once again, I greatly thank the Almighty GOD; the All
Knowing, most Gracious, most Merciful, the Cherisher, Sustainers of
the universe and master of the Day of Judgment who has been the driver
of my life even before I was born and for sparing my life to this day and
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seeing me through my years of study. All glory, honour and adoration be
unto him forever and ever, AMEN.

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 TABLE OF CONTENT

TITLE PAGE - - - - - - - - i

DECLARATION - - - - - - - ii

CERTIFICATION - - - - - - - iii

DEDICATION - - - - - - - - iv

ACKNOWLEDGEMENT - - - - - - v

TABLE OF CONTENT - - - - - - - ix

ABSTRACT - - - - - - - - xiv

CHAPTER ONE:

INTRODUCTION

1.1 BACKGROUND OF THE STUDY - - - - 1

1.2 STATEMENT OF THE PROBLEMS - - - - 3

1.3 RESEARCH QUESTIONS - - - - - 4

1.4 OBJECTIVES OF THE STUDY - - - - 4

1.5 RESEARCH HYPOTHESIS - - - - - 5

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1.6 SIGNIFICANCE OF THE STUDY - - - - 6

1.7 LIMITATION OF THE STUDY - - - - 6

1.8 DEFINITION OF TERMS - - - - 7

REFERENCES - - - - - - - 12

CHAPTER TWO:LITERATURE REVIEW

2.0 INTRODUCTION - - - - - - 13

2.1 HISTORICAL BACKGROUND OF BANKING IN NIGERIA 14

2.2 SERVICES OFFERED BY COMMERCIAL BANKS - 17

2.3.1 THE COMPUTER REVOLUTION - - - - 20

2.3.2 DEVELOPMENT OF COMPUTER - - - - 21

2.3.3 ELECTRONIC- MECHANICAL PUNCHED

CARD MACHINES - - - - - - 22

2.3.4 MODERN COMPUTER SYSTEM - - - - 29

2.3.5 OPERATRION OF THE COMPUTER - - - 32

2.3.6 THE COMPUTER ENVIRONMENT - - - - 35

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2.4 MEANING OF ACCOUNTING INFORMATION - - 37

2.5 RELATIONSHIP BETWEEN BANKING AND

ACCOUNTING INFORMATION SYSTEM - - 45

2.6 SAVINGS ACCOUNT - - - - - - 56

2.7 ADVANTAGES OF ACCOUNTING INFORMATION

SYSTEM IN BANKING - - - - - - 63

2.8 LIMITATION OF ACCOUNTING INFORMATION ON

BANKING - - - - - - - - 68

REFERENCES - - - - - - - 72

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 INTRODUCTION - - - - - - 73

3.2 RESEARCH DESIGN- - - - - - - 73

3.3 TYPES AND SOURCES OF DATA - - - - 75

3.4 METHOD OF DATA ANALYSIS - - - - 76

3.5 DATA ANALYSIS TECHNIQUE - - - - 77

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3.6 MODEL SPECIFICATION - - - - - - 77

3.7 DEFINITION OF VARIABLES - - - - - 79

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND

INTERPRETATION

4.1 INTRODUCTION - - - - - - 82

4.2 DEFINITION OF VARIABLES - - - - 83

4.3 DATA PRESENTATION - - - - - 43

4.4 DATA ANALYSIS AND INTERPRETATION - - 87

CHAPTER FIVE: SUMMARY OF FINDINGS CONCLUSION

AND RECOMMENDATIONS

5.1 INTRODUCTION - - - - - - 101

5.2 SUMMARY OF FINDINGS - - - - - 103

5.3 CONCLUSION - - - - - - -104

5.4 RECOMMENDATIONS - - - - -105

5.5 RECOMMENDATION FOR FURTHER STUDIES- -106

BIBLIOGRAPHY - - - - - - -107

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APPENDIX I - - - - - - -110

APPENDIX 11 - - - - - - -111

APPENDIX III - - - - - - -113

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 ABSTRACT

An organization comprises of a combination of various information

systems. These various information systems aid the collection of data that
is necessary for management to prepare their financial reports that will aid
decision making in order to achieve organizational goals and objectives.
These systems are sometimes referred to as accounting systems. The type of
accounting systems put in place will determine the quality of accounting
information generated by such system. In this present day where users of
financial statements require quality information to aid their investment
decisions, there is the need to determine the impact of such systems on
their performances. This study was embarked on to determine the impact
of accounting information system on the performance of the banking sector
in Nigeria with a particular focus on First Bank Nigeria Plc. Our major
objectives were to find out the relationship between accounting information
generated from the system with profitability represented by Return on
Capital Employed (ROCE) and Earnings per Share (EPS). In order to
achieve the objectives, we obtained secondary data from 2001 to 2010
from First Bank Plc and used regression analysis with e-view to analyze
the data. The result of the findings shows that there is a positive
relationship between Accounting Information generated from the system
and Return on Capital Employed and Earnings per Share and a positive
relationship between Net profit Margin and Dividend per Share. We
recommend that managers should ensure adequate investment in their
accounting information system to ensure that quality information is
generated from their accounting system.

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