THE EFFECT OF COMPUTERIZED ACCOUNTING SYSTEM ON THE PERFORMANCE OF IN BANKING INDUSTRY – A STUDY OF SELECTED BANKS IN ENUGU METROPOLIS
ABSTRACT
The research topic of this study is “The Effect of Computerized Accounting System on the Performance of in Banking Industry – a Study of selected banks in Enugu Metropolis. The purpose is to know whether the application of a Computerized Accounting System supersedes that of a manual Accounting System, whether if computerized Accounting System enhances higher turnover and profitability, and also whether a computerized accounting system is an effective means of keeping accounting records. The study population is 70 persons who are members of the staff of the three major selected banks. Using Taro Yamene’s formula the sample size calculated gave (60). The formulated hypothesis was tested using the analysis of variance (ANOVA) statistical technique at a 5% level of significance. The researcher also made use of primary methods of data collection which included questionnaires and personal interviews. Also, the secondary method of data collection used was gotten from official documents of the banks, various research work on the computerized accounting systems, accounting journals, textbooks, and Caritas University Amorji – Nike, Emene, Enugu State Library. Based on these, the researcher recommended that banks in Enugu Metropolis should channel most of their resources into the training and development of bankers and Accountants personnel in computerized accounting system-related technology such as I.C.T to boost performance in their banking operations and their personnel. Also due to the widespread computer trends and its dynamic nature, it is recommended that banks in the Enugu metropolis that are still battling with the manual systems should adopt specifically the Computerized Accounting System. ACCOUNTING SYSTEM ON THE PERFORMANCE OF IN BANKING INDUSTRY
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Today’s modern technology brought into use the computer, this technology is the application of science to gathering, recording, processing, and communicating business information using electronic media. The commonest tool for application is the computer and it involves all the transaction processing system management information systems various business support systems etc. The computer is a central force in the advancement of various organizations. The historical development of the computer started with Hollerith punched card of
In 1880, Goerge Alken’s calculator and Charles Babbage’s creation of a different engine.
The computer can be defined as a tool or device which can accept facts (data) and figures in a prescribed form, apply prescribed processes to data, and supply results of the processes in a specified format as meaningful information. There are also different types of information depending on the make or type of their functions. The revolution in technology to the computer complements or on the other hand, substitute for ten elements which are: – paper, personal memos, charts, reports, calculators, terminals letter.
Hartzell (2006) defines a computer as an electronic machine for processes information automatically and very quickly. The importance of computers is the ability to handle vast amounts of information and to do other processes with accuracy and speed which cannot be manually undertaken have been recognized and appreciated by financial institutions, hence the trend in computerized banking operations.
Tanenbaum (2010) sees the computer as a machine that can solve problems for people by carrying out instructions given to it.
The American Accounting Association defines accounting as the process of identifying, measuring, and communicating economic information to permit informed judgment and decision by users of the information. Accounting is also the establishment, maintenance, collection, and analysis of the financial position of an organization and any changes that have occurred or may occur over time.
Omolehinwe (2009) defines accounting as the collection and recording of financial data about an organization whether in the private or the public sector and analyzing the data so collected to suit the decision that needs to be taken and reporting the relevant information in a summary form to the user in a form that is meaningful to him or her.
Chinese (2003) defines the accounting system as the art of identifying, recording, classifying measuring, and interpreting in a significant manner the financial transaction of an organization for decision-making. Summarizing from time to time the information contained in the record, for its significant presentation and interpretation to interested parties as an aid to decision making.
The accounting system is also defined as a consistent way of organizing, recording, summarizing, and reporting financial transactions.
Computerization is the installation of computers as a part of a process of automation.
Banking in Nigeria has witnessed impressive development in recent times, particularly within the last decade time with growth in economic activities and complexities, banking services have expanded significantly in size and variety due to the increased computerization of banks.
1.2STATEMENT OF THE PROBLEM
Despite the benefit of computers to the banking industry and business generally, some problems are still left unsolved and new ones have been credited to the use of computers itself problems
like;
The use of computers to keep accounting records.
Another problem is the displacement of labor hands in the accounting department and its union implication and the problem of low turnover (volume of operation) and profitability in banks.
1.3 OBJECTIVES OF THE STUDY.
The objectives of this study are:-
- To determine the relationship between the application of the manual accounting system and the computerized accounting system in the banking system.
- To find out, whether the effect of a computerized accounting system enhances higher turnover (volume of operation) and
profitability in banks.
- To examine the impact of using computers to keep
accounting records.
1.4 RESEARCH QUESTIONS.
To be able to achieve the above purposes, some questions would be asked which help the researcher to gather the necessary information needed, they are:
- Is there any relationship between the manual accounting system and the computerized accounting system in the banking industry?
- Also, can computerized accounting systems enhance high turnover and profitability in banks?
- Finally, What are the effects of using computers to keep accounting records?
1.5 HYPOTHESES OF THE STUDY
To ensure the verification and validation of the primary data gathered through the administration of questionnaires. A research hypothesis is formed comprising the null hypothesis (Ho) and the alternative hypothesis (Hi).
Hypothesis One
Ho: – There is no relationship between the application of the
Computer and manual systems in the accounting system of the banking industry
Hi: – There is a relationship between the application of the
Computer and manual systems in the accounting system of the banking industry.
Hypothesis Two
Ho:- The impact of computerized accounting systems does not enhance higher turnover and profitability in banks. Hi:- The impact of computerized accounting systems enhances higher turnover and profitability in banks.
Hypothesis Three
Ho:- There is no effect of using a computer to keep accounting
records.
Hi:- There is an effect of using a computer to keep accounting
records.
1.6 SIGNIFICANCE OF THE STUDY.
Most banks have growth and continuity as part of their objective, and such objectives are best realized by efficient management, as well as an effective computerized accounting system. This has made it possible for banks to gain inherent advantages while minimizing risks involved in their daily operations.
This research project will therefore be of immense
advantage or benefit to the management of banks, computers, and other business organizations using computerized accounting systems. Hence, the theories and concepts contained therein can be infused into their management system.
This research will also contribute to enhancing efficiency in the following ways;
- Speedy and accurate decision-making through the use of a computerized accounting system.
- Improvement in the delivery and quality of service.
- The bank’s profitability will improve.
Firstly, in the realm of academics, the project will be very useful to a wide audience as it applies to courses in accountancy, banking, and finance as well as executive development courses, management seminars, and supervisory workshops conducted in colleges and universities.
- SCOPE AND LIMITATIONS OF THE STUDY.
The scope of the study is restricted to examining the effect of computerized accounting systems on the performance of banking industries such as Diamond Bank plc, Eco Bank plc, and First Bank plc all in the Enugu metropolis of Enugu state.
- DEFINITION OF TERMS
AUDIT TRIAL:- a technique that made it possible to retrace the processing of data in all others to change, add or delete records in
a file.
BLOCKING:- the storage of more than one term in a record.
COMPLIER:- a programming system applied by a manufacturer to convert a program written in an automatic language into machine language.
EXPERT SYSTEM:- A computer system that embodies some of the experienced and specialized knowledge of an expert. it enables a non-expert to achieve comparable performance to an
extent in the field.
APPLICATION PACKAGES:- These are computer programs
written to carry out specific tasks for individuals or organizations with similar or related needs.
THE EFFECT OF COMPUTERIZED ACCOUNTING SYSTEM ON THE PERFORMANCE OF IN BANKING INDUSTRY – A STUDY OF SELECTED BANKS IN ENUGU METROPOLIS, GET MORE ACCOUNTING PROJECT TOPICS