MEKELLE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

ASSESSMENT OF ACCOUNTING INFORMATION SYSTEM (AIS) IN

BANK MANAGEMENT ACTIVITIES (A CASE STUDY ON LION
INTERNATIONAL BANK IN MEKELLE BRANCH ADHI HAWSI SUB
BRANCH)

A RESEARCH PAPER SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR BACHILOR OF ART (BA) DEGREE IN
ACCOUNTING AND FINANCE
BY:

TEMESGEN LIUL MEKONEN

ADVISOR: - YETBAREK ABREHA (LECTURER)

JUNE, 2015

MEKELLE, ETHIOPIA
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ACKNOWLGEMENTS

Prior to any thing I would like to thank the almighty GOD for giving me to
reach these chance by saving from everything, holy will and strengthen me at
any stage of my life.
Second I am so indebted to my Essay advisor YETEBAREK ABREHA(Lecturer)
for his unreserved advice , suggestion and constrictive comment and And also I
would like to express my gratitude to ELIAS MURABO (Lecturer) for his
inspiring me to start this paper and comment me when I ask him every time.
I have no words to express how I thank my family please god give long live for
ma beloved families. My special heart-felt gratitude goes to ma unforgivable
friend TAMAGNU MELAKU for his assist me in every aspect. Finally i would like
to thank all my relatives and friends their did not mention their names they
assist me morally.
MAN PROPOSE GOD DIPOSE

Abstract

This research was conducted at the city of Mekelle to the assessment of the
Accounting information system in management activates of Lion International
bank. The main objective of this research was to assess Accounting information
system in bank management activities of lion international bank in order to
overcome problems like; Low level awareness of AIS by employees as well as
management staffs of lion international bank, failing of network connection
/network
Interrupt, Human resource problem in AIS department and the bank don’t imitate
customers to give comment on his service backed by AIS. This study was used both
primary and secondary data. The primary data was collected by questionnaire of
Lion International bank employees. The questionnaire was collected with direct
distribute to employees of Lion International bank ADIHAWSI BRANCH used by
census study method. Secondary sources of data were collected from documents
such as annual reports, internets and books. To overcome the drawbacks Lion
bank must consolidate or networking all the activities of the bank for effective bank
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system, The bank also bank must improve human resource problems it by hiring
employees who have profession in accounting information system in order to make
advanced decision and satisfy the needs of customers and Lion bank should initiate
all customers to give comment on his service backed by AIS in order to improve his
service in the future and to be leading bank in the domestic by increasing his
strong side and correcting his weak side

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Table of Contents Page

Acknowledgement………………………………………………..I
Abstract…………………………………………………………..II
Contents…………………………………………………………………..III
CHAPTER ONE
1. Introduction…................................................................................................................1
1.1 Background of the organization..............................................................................1
1.1.1 Mission……………………………………………………………..……….1
1.2.1 Vision…………………………………………………………….………….1
1.2 Background of the Study….. ………………………………………………………1
1.3 Statement of Problem……………………………………………………………….2
1.4 Objectives of the Study………………………………………………………..……3
1.4.1 General Objective of the Study ………………………………………..…3
1.4.2 Specific Objective of the Study ………………………………………..…3
1.5 Scope of the Study………………………………………………………… ………...3
1.6 Limitation of the study.................................................................................................4
1.7 Significance of the Study……………………………………………….…………….4

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 1.8 Organization of the paper ………………………………………………………….4

CHAPTER TWO
2 LITRATURE REVIEW
2.1 Definition of accounting information system………………………………………..5

2.2 Objectives of Accounting Information System…………………………..…………5

2.3 Features of accounting information system………………………………………….6
2.4Accounting Information Systems Used in Banking…………………………………..….7

2.5 Importance of Accounting Information Systems……………………………..….…..9

2.6 Role of Accounting Information Systems…………………………………………….….10

III

2.7 7What are the main characteristics of accounting information system……………...……11

2.8The information environment………………………………………………………….....12

2.9 Core concept of accounting information system…………………………...…..………..13

CHAPTER THREE
3 METHODOLOGY OF THE STUDY

3.1.Research design ………………………………………………………..………………15

3.1.1. Data type and source ……………………………………………………………….15

3.1.2 Sample design and sample size …………………………………………..…………15

3.1.3Data collection instrument ………………………………………………………….15

3.1.4Data Processing and analysis …………………………………..…………………….15

CHA PTER FOUR

4 DATA ANALYSIS RESULT, PRESENTATION AND DISCUSSION

4.1 Introduction………………………………………………………………………….16
4.2 Demographic characteristics o of respondent………………………….……………16
4.2.1 Gender of employee……………………………………………………………..16
4.2.2 Age of the respondents………………………………………………….………..16
4.2.3 Marital status of the respondents …………………………………………………….17

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4.2.4 Background information of respondent ………………………………….…………..18

4.3 .scale of awareness of management about AIS………………………………………..…...19

4.4. Human resource problem observed in AIS Department………………………………..20

4.5. General observed problem in lion international bank …………………..………………20
4.6 standard service provide by the bank ……………………………….……………….……..21
4.7 contributions of AIS towards customer satisfaction……………………………….………22
4.8 benefit of AIS to the bank ………………………………………………………………..23
4.9. Effect of AIS on the bank ………………………………………………………………..23
4.10 Customer comment on AIS ………………………………………………….….……….24
IV

4.11 Past years’ experience on AIS………………………………………………..……….25

CHAPTER FIVE
5 CONCLUSIONS AND RECOMMENDATION
5.1 conclusions……………………………………………………………………………..26
4.2 Recommendation……………………………………………………………….……..27
Reference………………………………………………………………………………………28
Appendix…………………………………………………………………………………………29

CHAPTER ONE

1. Introduction

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 1.1 Back ground of the organization
Lion international bank S.C (LIB) is a privately owned share company established on October 2,
2006 in accordance with proclamation 84/94 and the commercial code of Ethiopia; officially
inaugurated for public services on January 6, 2007. With over 6400 shareholders lion
international bank has a unique position in the commercial banking Industry and is distinguished
for its broad based participation of the public from all walks of life. Lion international bank paid
up capital over birr 320 million, while its subscribed capital is birr 402 million. Article 320(1) of
commercial code of Ethiopia entitles the promoters committee to 20% of the net profit of the
bank for the period not exceeding three years. Lion international bank is led by eleven board of
director elected by the general assembly. The president and the vice president (vice president-
operations and vice president- corporate services) appointed by board of directors, and
responsible for day today activities and also accountable for the financial and operational
performance of the bank. (Anbessa bank, 2007)
1.1.2. Vision

“To be the Leading Bank in Ethiopia”

1.1.3. Mission

Lion International Bank (LIB) is committed to maximizing customer’s satisfaction and

shareholders value through quality banking services delivery technological leader ship,
diversified product services and motivated employees.

1.2. Background of the study

Accounting information systems were tools when incorporated in the field of information and
technology systems (IT) were designed to help in the management and control of topics related
to firm’s economic financial data. Currently society is information dependent. Information is one
of the most important resources for any kind of development activities. Now a day’s information
system helps prominent role in day to day activities of individuals.
It’s essential for business organization; it’s become one of important function like marketing
human resource and financial according and others globally. There is a shift towards the
consumption and purpose of information on system in the organization, (James, A. hall, 2010).

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An organization accounting information system plays an important role in helping it adopt and
maintain strategic position achieving a close fit among activity requires that data to be collected
about each activity. Traditionally accounting information system has been referred to as
transaction processing system because its concern is financial data and accounting transaction.
(Marshall, Romney, 1997).
For example, when a sale is took place the accounting information system will record a journal
entry. Showing any data of sale a debt to either cash or accounting receivable and credit to sale.
Effective AIS is essential to any organizations long run success. Without a means of monitoring
the events that occur. Every organizations also need to track the effects of various events on the
resources that were under its control information about the agents who participate in those events
is necessary to assign responsibility for actions taken. Generally this research would try to assess
how accounting information system contributes for customer satisfaction how it is capability of
Lion international bank management awareness of accounting information system.
1.3Statement of the problem
Accounting is a collection of principles and rules that governs the transaction of data in to
information used in the management process. Accounting information system exists whenever
there is all financial activities exist. Accounting Information system is used in the management
process to deliver financial and managerial information prepared in a known way about revenue,
expenses, assets, liability, and equity in order to make advanced decision by the
management.Most of the time majority of business organization utilize accounting information
system (AIS) for administration purpose, because it plays critical role in management and
administration activities of various categories of the business enterprise like banking , insurance
companies, government agencies and large corporations by collecting, recording, storing, and
processing data to produce information for decision makers. Lion International bank is one of the
banks required to use Accounting information system (AIS) in order to make advanced decision,
but the bank have different drawbacks like: Low level awareness of AIS by employees as well as
management staffs of lion international bank, failing of network connection /network Interrupt,
lack ofHuman resource in AIS department, delays in communication or networking of all the
activities. The above problem affects both the bank and the customer of lion international bank.
1.3.1 Basic Research question

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1. How does AIS contribute for customers’ satisfaction?
2 AIs Lion international bank employees and management staffs aware of AIS?
3 How AIS affected the organization encounter over the past year?
4 What looks customer satisfaction towards the banking administration?
5In what way the AIS of Lion international bank add value in the organization?
1.4Objectives of the study
1.4.1General Objectives
The general objective of this study is to assess accounting information system in management
activists of lion international bank S.C in Mekelle branch.
1.4.2 Specific objective
1. To assess the contribution of Accounting Information system (AIS) to the customer
satisfaction.
2. To assess the existing Accounting Information system (AIS) in management activities of
the bank.
3. To recognize prospects of Accounting Information system (AIS) in management
activities of the bank.
4. To assess Lion international bank employees and management staff awareness about AIS.
5. To assess the effect of Accounting Information system (AIS) in organization on counter
over the last three years.
1.5 Scope of the study
Accounting information system is a comprehensive term that exists in each and everywhere and
it has great importance to management activity or administration. Any existing organization
administration needs AIS to be effective. The scope of this study would be limited on the
assessment of of Accounting Information system (AIS) in management activities of lion
international bank (LIB). The Accounting information system (AIS) under this study would
believe encompass all activities related to management activities. Lion international bank
(LIB)has different officials in different parts of Ethiopia. However, this study mainly focused on
Mekelle branch ADI HAWSI sub branch.

1.6 Limitation of the study

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 There are some limitations that were restrict the study like lack of reliable data and adequate
documents for the study, shortage of time and lack of money were the major problems.
Because of this reason the study is limited on the Lion international bank (LIB), Adi-hawsi
branch.

1.7 Significance of the study

The study will help the researcher to gain much knowledge in accounting information system
(AIS). After the detail investigation and analysis this paper would try to give possible
recommendation and suggestion which may have due important to lion international bank
specially Adi-hawsi branch. The studies also may serve as bench mark for other related
researcher to carry out the same line of the study. It would be expect that the result of the study
helps to lion international bank (LIB) by understanding the weakness related to Accounting
information system (AIS). Finally the study was important for the researcher partial fulfillments
of the requirements of Bachelor of Arts (BA) degree in accounting and finance.

1.8 Organization of the paper

This paper would consist four chapters; the first chapter contains the introduction part of the
paper (back ground of the study, statement of the problem, objective of the study, methodology
and significance of the study). The second chapter deals about review of literature; chapter three
would deals about analyzing and interpretation; the final chapter would contain conclusion and
some possible recommendation.

CHAPTER TWO
2. LITRATURE REVIEW
2.1 Definition of accounting information system
An accounting information system (AIS) is a system of collection, storage and processing of
financial and accounting data that is used by decision makers. An accounting information system
is generally a computer-based method for tracking accounting activity in conjunction with
information technology resources. The resulting statistical reportscan be used internally by
management or externally by other interested parties includinginvestors, creditors and tax
authorities. (Marshall Romney 2012)

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2.2 Objectives of Accounting Information System
Accounting information systems provides reporting for different layers of a business.
An accounting information system provides accurate and timely financial information for
internal management purposes. While these systems can include paper manuals and ledgers,
most systems in today's business environment are built upon accounting software programs or
applications. These systems provide financial or operational reports for business owners to make
decisions. An accounting information system can also integrate and fulfill departmental and
company-wide objectives. (Amazon.com 2012)
2.2.1 Central Information Collection
Accounting information systems collect information for various purposes in a business. Large
organizations often use this system to gather and organize financial and other information from
multiple business departments or divisions. An accounting system can also benefit organizations
with several national or international locations. This system allows for the electronic transference
of information from many sources into a central location where accountants gather and process
this data. Some systems can also gather information in a real-time format. (Amazon.com 2012)
2.2.2 Checks and Balances
Accounting managers and supervisors use an accounting information system to separate tasks
and ensure controls are in place for different accounting functions. Accounts payable, accounts
receivable, payroll, departmental financial data, fixed assets and purchasing each work under
separate modules in an advanced accounting system and demand individualhandling processes
and procedures. Each of these individual modules feed summarized data into the general ledger
but allow for system checks and balances along the way. Reports can be generated from
individual modules to ensure accuracy of data before being passed on to a company's general
ledger. (Amazon.com 2012)
2.2.3Improving the Flow of Work
Improving the flow of work in individual departments often gets a boost by the implementation
of an accounting information system. Departments outside of accounting must understand how
critical information is processed through the company's internal financial information system for
a variety of reasons. Source documents--such as invoices, purchase orders, employee expense
reports, time cards for payroll input, bills and asset acquisition forms--must all find their way
from the originator to the accounting department.

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Depending upon the software, the accounting system requires a variety of information for
different parts of the process be manually input into the system. This often determines the work
flow of other departments in regards to processing financial data. Procedures and processes that
clearly delineate the needed information, the steps to process that information and the approval
process, aid in reducing redundant work and ensure that the accounting department has the
necessary approvals to process financial data.
An accounting system serves to inform interested parties of past performance and to provide
guidance for future performance. It should provide information. (Paul stein Bart 2012)
2.3Features of an Accounting Information System
One of the features of AIS is the flow of information. It is illustrated here by the use of a
pyramid with management on the top, middle management just below that, operations
management below that, and operations personnel representing the base of the flow of
information. Information concerning the performance of the company drifts upward to all levels
of management through the personnel. The top management is responsible to the shareholders or
owners of the company for the information they receive. Contributing to this information about
the performance of the company are the customers and suppliers, with whom the operations
personnel have day-to-day contact. With the use of this information the top management
filtersdown information on the company's budget and instructions on how to change or improve
the day-to-day interactions with the customers and suppliers. Information from suppliers and
customers is known as external information flows. Those from personnel to management and
management to personnel are known as internal information flows.
Processing Transactions
Another feature of the AIS is in the processing of transactions. AIS process two different types
of transactions. The financial transaction, which is any transaction monetary in nature that affects
the assets or equities of a business organization. The nonfinancial transaction is a decision that,
while it is not measured monetarily, can affect the overall accounting health of the company. For
example, if the company decides to change suppliers due to a substantial rise in prices from a
current supplier, the immediate effect is not financial in nature until the first order is placed.
All transactions are entered into the Accounting Information System for the purpose of affecting
the decision-making of the top management. If top management is aware of a coming increase in

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costs, taxes or a potential loss of clientele, decisions can be made to counter negative
consequences of future events. (James hall 2011)
AIS Model
A typical model often AIS illustrates these features and includes three different steps in handling
information. First is the data collection. It is considered the most important of all three steps; as
if errors go undetected the system may create unreliable output. The two main requirements of
the data collection process are that the data used be both relevant and efficient. It is in the data
collection stage that the relevance of the data should be weighed to filter out all irrelevant facts
from the system. Efficiency involves collection of the same set of data only once. Failure to do
so leads to redundant data.
The second step is in the data processing, or the attempt to organize the data in such a way that
management can make decisions in regard to the financial decisions of the company. One
example would be in using sales data to forecast future sales expectations. Based on those
expectations decisions can be made about staffing requirements.
The third step is the actual generation of information that leads to decision-making. Whether the
decision is based in financial or nonfinancial transactions, the decision can affect the day-to-day
operations of the business and possibly the financial outlook of the company. (James hall 2011)
2.4Accounting Information Systems Used in Banking
Have unique accounting information system configurations.
Banks Different components comprise a bank accounting information system. Bank systems are
classified as "hybrid" systems, which provide basic accounting operations, bank information
systems decision support software, offline banking products (insurance, business financial
management plans) implemented and initiated on intra-office networks to serve customers. Bank
accounting systems are under state and federal regulatory agencies to ensure the accuracy and
integrity of bank accounting systems. (Richard, 2011)
2.4.1 General Ledger Systems
The general ledger is at the core of account processing and information systems in banking. The
general ledger is the record accessed to perform account transactions. It records every
transaction, which interfaces with a designation of accounts. A bank general ledger can be
slightly different from modern industry general ledgers because of certain compliance rules set
forth by the Federal Reserve Bank (FRB) and the Federal Deposit Insurance Corporation (FDIC).

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Banking general ledger systems operate on mid-range software, which can be turnkey software--
out of the box software customized for banking industry applications. (Richard 2011)
2.4.2 Loan Accounting Applications
Banks make the majority of their money through loans and investments. Through loan
accounting software, bank personnel can process the forms and paperwork needed to make a
decision on a customer's credit standing. The managerial side of a loan accounting application is
managers can access data to examine the bank loan portfolio, generate compliance checks for
auditors and track loan loss reserve accounts. Loan origination software can interface with an
accounting information system through most PC-based systems. (Richard 2011)
2.4.3 Mortgage Banking Applications
For banks in the mortgage industry, mortgage bank application modules create and maintain
information according to mortgage loans provide by banks to its customers. The mortgage
information system generates customer statements, tax statements for federal and state tax
offices, and creates an escrow account for mortgages on the banks portfolio. On the general
ledger, mortgage bank accounts consist of several sub-account layers reflecting taxes, actual
value of the mortgage, assessed value of the mortgage and other variables. 2.4.4 Customer
Account Applications
With online and offline banking system applications. Customer account information is also
Customer account applications provide unique primary key identifiers to link customer
information to an account number assigned by the information system during a creation of the
account. The customer account is maintained on the system and referenced by account number,
which is held in a field on the general ledger. The customer account number is the link for
customers to interact the basis for transaction exception reporting for various customer account
issues. (Richard 2011)
2.4.5 Internet Banking Applications
The latest evolutions in banking information systems are web-based applications that support
Internet banking. Internet banking programs interface with accounting information system
through a web server or portal with the website or page performing the role as a template or
"point of access." Through secure web-servers, customers can perform actions, which can affect,
update or change general ledger status. Management analyzes reports pertaining to Internet
banking, such as how many customers are using the Internet for deposits, transfers and accesses

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other banking products. Internet banking applications are also used for the online marketing of
bank products through marketing software created for bank institutions.
(http://www.ehow.com2010)
2.5 Importance of Accounting Information Systems

Information system is designed to keep records of a business in an efficient accounting as

information system is typically a computerized accounting program that keeps record and
accounting or a manner.
A company the information is entered into the system and the system tracks and organizes the
accounting information. The accounting information system is used also to provide detailed
information about the company, including financial statements. (Vernon 2013)
2.5.1 Business Transactions
An accounting information system is designed to record all transactions of a business. An
accounting clerk enters all business transactions into the program and the transactions
automatically are posted to the corresponding accounts. This is important because any time
information is needed it can found on the computer and is organized. (Vernon 2013)
2.5.2 Accounts Payable
An accounting information system allows for easier payments made on accounts payable. Many
systems are designed to pay all bills due with a click of a button. A date is selected and checks
are automatically made out for all bills due. Most systems allow a clerk to unselect certain bills if
a company is not ready to pay a specific bill. (Vernon 2013)
2.5.3 Accounts Receivable
This type of system also allows for easier billing. Information is recorded on the system and a
clerk chooses when to print bills. This is done daily, weekly or monthly, depending on the
business. The system generates all bills efficiently and easily for the clerk.(Vernon 2013)
2.5.4 Financial Statements
An accounting information system generates all financial reports without the clerk calculating
anything. The dates for the reports are entered into the system and the computer generates reports
for that specific period. This comes in handy when a report from a different period is needed

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immediately. The system has the capability of producing reports for any period that the
information was recorded for. (Vernon 2013)
2.5.5 Year-End Closing
Year-end closing is often a tedious process for an accountant. An unadjusted trial balance is
created, adjusting entries are made and recorded, an adjusted trial balance is calculated, closing
entries are made, and, finally, a post-closing trial balance is generated. This process is
complicated and time consuming, but with an accounting information system, the computer does
most of the work on its own. (http://www.ehow.cm2013)
2.6 Role of Accounting Information Systems

According to (Patrick 2014) Accounting Information Systems (AIS) is a subset of

a company’s total Management Information Systems. Companies use the MIS to aid their
business decisions and ensure profitable business operations.
History
The classic AIS included paper ledgers that contained all financial transaction of a company.
With the growth of technology over the past several decades, accounting software has replaced
the old paper system.
Features
AIS software has two main features: financial transaction recording and financial information
reporting. After accountants input financial transactions into the AIS, reports can be generated to
review this information.
Considerations
Company management must decide how large the AIS will be and what type of information must
be collected. Information may be recorded electronically, bypassing human input and allowing
managers quicker access to select information.
Benefits
Many AIS programs are web or server based, allowing managers to gather and review financial
information from multiple locations at one time. Centralized reporting can shorten turnaround
time for implementing changes in business operations.

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Warning
Failing to review the information collected and reported may hamper the effectiveness of the
AIS. Ineffective AIS programs create a “garbage in, garbage out” environment, causing delays
for management decisions.
2.7 What are the main characteristics of accounting information system
Understandability
This implies the expression, with clarity, of accounting information in such a way that it will be
understandable to users - who are generally assumed to have a reasonable knowledge of business
and economic activities. (Barry 1994)
Relevance
This implies that, to be useful, accounting information must assist a user to form, confirm or
maybe revise a view - usually in the context of making a decision, e.g. should I invest, should I
lend money to this business? Should I work for this business? (Barry 1994)
Consistency
This implies consistent treatment of similar items and application of accounting policies. (Barry
1994)
Comparability
This implies the ability for users to be able to compare similar companies in the same industry
group and to make comparisons of performance over time. Much of the work that goes into
setting accounting standards is based around the need for comparability. (Barry 1994)
Reliability
This implies that the accounting information that is presented is truthful, accurate, complete
(nothing significant missed out) and capable of being verified (e.g. by a potential investor).
(Barry 1994)
Objectivity

this implies that accounting information is prepared and reported in a "neutral" way. In other

words, it is not biased towards a particular user group or vested interest. (Barry 1994)
2.8The information environment
We begin the study of AIS with the recognition that information is a business resource.Like the
other business resources of raw materials, capital, and labor, information is vital to the survival

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of the contemporary business organization. Every business day, vast quantities of information
flow to decision makers and other users to meet a variety of internal needs. In addition,
information flows out from the organization to external users, such as customers, suppliers, and
stakeholders who have an interest in the firm. Business operations from the base of the pyramid.
These activities consist of the product-oriented work of the organization, such as manufacturing,
sales, and distribution. Above the base level, the Organization is divided into three management
tiers: operations management, middle management, and Top management. Operations
management is directly responsible for controlling day-to-day operations.
Middle management is accountable for the short-term planning and coordination of activities
necessary to accomplish organizational objectives. Top management is responsible for longer-
term planning and setting organizational objectives. Every individual in the organization, from
business operations to top management, needs information to accomplish his or her tasks. The
horizontal flow supports operations-level tasks with highly detailed information about the many
business transactions affecting the firm. This includes information about events such as the sale
and Shipment of goods, the use of labor and materials in the production process, and internal
transfers of resources from one department to another. The vertical flow distributes information
downward from senior managers to junior managers and operations personnel in the form of
instructions, quotas, and budgets. In addition, summarized information pertaining to operations
and other activities flows upward to managers at all levels. Management uses this information to
support its various planning and control function. (James 2012)
2.9 CORE CONCEPT OF ACCOUNTING INFORMATION SYSTEMS
Accounting Information System (AIS) courses is the employment opportunities available within
the discipline. Career opportunities abound for those with a solid foundation in AIS, including
traditional accounting vocations in financial and managerial accounting, as well as careers in
consulting and information systems auditing and security .(Ulrika 2011)
Traditional Accounting
Certainly a number of traditional accounting jobs are also available to those who choose to major
in accounting information systems. After all, what accounting system is not also an accounting
information system? Also, because technology now plays such a strong role in accounting, AIS
majors enjoy the advantage of understanding both traditional accounting concepts and
information systems concepts. Recognizing the importance to accountants of knowledge about

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information systems, the AICPA recently developed a new designation: Certified Information
Technology Professional (CITP), which accountants can earn with business experience and by
passing an examination. (Ulrika 2011)
Systems Consulting
A consultant is an outside expert who helps an organization solve problems or provides
Technical expertise on an issue. Systems consultants provide help with issues concerning
Information systems—for example, by helping an organization design a new information
System, select computer hardware or software, or reengineering business processes (so that they
operate more effectively). One of the most important assets a consultant brings to his or her job
is an objective View of the client organization and its processes and goals. AIS students who are
skilled in both accounting and information systems make particularly competent systems
consultants because they understand how data flow through accounting systems as well as how
business Processes function. Systems consultants can help a variety of organizations, including
Professional service organizations, private corporations, and government agencies. This Broad
work experience, combined with technical knowledge about hardware and software, Can be a
valuable asset to CPA clients. Because it is likely that a newly-designed system will include
accounting-related information, a consultant who understands accounting is particularly helpful.
Many systems consultants work for large professional service Organizations, such as Accenture
or Cap Gemini Ernst & Young. Others may work for specialized organizations that focus on the
custom design of accounting information Systems. Consulting careers for students of accounting
information systems also include jobs as Value-added resellers (VARs). Software vendors
license VARs to sell a particular line of Software products and provide consulting services to
companies, such as help with their Software installation, training, and customization. A VAR
may set up a small one-person Consulting business or may work with other VARs and
consultants to provide alternative Software solutions to clients. Case-in-Point 1.11 Martin and
Associates is a regional consulting firm in the Midwest, Started by Kevin Martin in 1983. Kevin,
a CPA, left a job with a large accounting firm to open an accounting business that would help
companies implement AISs. Today the company Describes itself as a ‘‘firm dedicated to
delivering accounting, ERP, and CRM solutions to our Clients and alliances.’’ The staff at Mar
staff at Martin and Associates is professionals with CPA and IT Experience—many have dual
degrees or double majors.

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Information Technology Auditing and Security
Information technology (IT) auditors concern themselves with analyzing the risks associated
with computerized information systems. These individuals often work closely with financial
auditors to assess the risks associated with automated AISs—a position in high demand because
so many systems are now computerized. Information systems auditors also help financial
auditors decide how much time to devote to auditing each segment of a company. (Romany
2012)

CHAPTER THREE

3. METHODOLOGY OF THE STUDY

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 3.1. Research design

This study would be conducted on assessment of accounting information system (AIS) in lion
international Bank (LIB) Mekelle branch. This study was descriptive types of research design
such as table and percentage method because it is easy to describe what the study can perform.

3.1.2 Data type and source

This study would use both secondary and primary data. The primary data would be collected
from questionnaires from the employees of lion international bank and the secondary data would
be collected from documents such as annual reports, internet and books.

3.1.3. Sample design and sample size

This study focuses on employees of lion international bank in Mekelle branch, which have
relation with the management and AIS department of LIB ADI HAWSE branch, ADI HAWSE
Branch has 10 employees and the researcher would take all employees of lion international bank,
which means this study would use census study method

3.1.4. Data collection instrument

The data collection instrument use in this study includes questionnaire to lion international bank
employees which would comprise of personal information and question related assessment of
accounting information system (AIS) in management activates.

3.1.5 Data Processing and analysis

The collected data would be processed through editing and examining carefully to detect error
and omissions; also the accuracy and consistency of fact gathering are as ascertained to make
things to smooth or coding and classifications. After the data would edited and error are
correcting the data were coding in numerical and other figure are assigning to answer so that the
response can be reduce to small number of classes. Thereafter the analysis would be made
through the use of tables and percentage proportion is orderly used for arrangement of data
summary or other format.

CHA PTER FOUR

4 DATA ANALYSIS RESULT, PRESENTATION AND DISCUSSION

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 4.1 Introduction
This chapter concentrates on a brief decapitation of lion international bank AIS contribution
effective administration in bank and its challenges. Data analysis and interpretation is also in
cloud in this chapter based on the data collected from document of LIB and primary data
collected by questionnaire and by with staff and with finance officer whose day to day activity
mainly concerned with accounting processing and uses it directly in the management activity’s
so that conclusion cold be drown based on the findings. Questionnaires were distributed to 10 of
employee’s lion international bank who has direct work relationship in the management and
finance department and all respondents are complemented and submitted the questionnaire
4.2 Demographic characteristics of respondents
Table 4.2.1 gender of employee
Factor Frequency Percent (%)
Gender Male 6 60%
Female 4 40%
Total 10 100%
(Source: Questionnaire, 2015)
The above table shows us that most of the respondents (60%) are male and (40%) are female
respondents. It implies that most of lion bank employees are male.

Table 4.2.2 Age of the respondents

Age No of the respondent Percentage

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Below 18-21years 0 0
22-35years 7 80%
36-45years 2 20%
Above 46 years 0 0%
Total 10 100%
Sources, questionnaires 2015
As indicated from the above table, 8(80%) of the respondents fall between the age of 22-35
years and 2(20%) of the respondents are found in the age 36-45 years. most of the employees in
the organization are between 22-35 years. This indicates that the bank of Abyssinia have
productive group of employees.
Table 4.2.3 marital status of the respondents
Marital status No of the respondents Percentage
Married 6 60%
Un married 3 30%
Divorced 1 10%
Widowed 0 0%
Total 10 100%
Source, questionnaires 2015
As shown the above table (60%) of the respondents were married, 3(30%) of the respondents
were unmarried and the remaining 1(10%) of the respondents were divorced. From this
information the researcher concludes most of the workers are married

4.2.4 Background information of respondent

Table 4.2.4 back ground of respondents

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No Questionnaire Respondent Percentage (%)
1 Education background No
Diploma 1 10%
First degree 9 90%
Above first degree 0 0%
Total 100%
2 Position
Supervisor 1 10%
Junior officer 1 10%
customer
Clark customer 6 60%
officer
Manager 1 10%
Auditor 0 0%

Senior accountant 1 10%

TOTAL 10 100%

3 Service year

Below 5-year 8 80%

5-10 Year 2 20%
Total
Source: Questionnaire; 2015
The education background distributions of the respondent shows that all of the respondents have
education qualification of diploma and above, the position shared by respondent constitutes 10%
of respondents are manager and 60% of clerk. There is also a single junior officer and senior
accountant each of them constitutes 10%. As far as the distribution of service year of the
respondent are concerned 80% of employees are below 5year of service and 20% of employees
are above 5 year. The staff of the bank has maximum level of education background this implies
that the bank canprovide and maintained quality information system
4.3 .scale of awareness of management about AIS

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Table 3.3 scale of awareness of management about AIS
Question Respondents Percentage
At the scale of 0-5 rate the
capability of management lion
international bank about the
awareness of AIS?

0=no awareness
total awareness

Partial awareness

0=no awareness 0 0.00

Partial awareness 6 70
Total awareness 4 30
Other 0 0.00

Total 10 100

(Source: Questionnaire, 2015)

As a research one can realized the value of accounting information in the process of
administrations is so great. Thus from table 3.3 the majority or 60% of the respondents have
partial awareness and40%of the respondents have total awareness about accounting information
system. In order to be effective as well as efficient in the engagement at least the majority of the
respondents have fully aware of accounting information system and to do this lion bank must do
to upgrade his employees about AIS knowledge.

4.4. Human resource problem observed in AIS Department

Table 4.4 human resource problem department AIS department
Question

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Is there shortage man power in Respondents percentage
AIS processing department No
Yes 6 60
No 4 40
Others, in what area 0 0.00
Total 10 100
(Source: Questionnaire, 2015)
From table 3.4 the researcher noticed that 60% percent of the respondents agree that there is
shortage of man power in AIS process department and also 30% of the respondents who replies
that there is no human resource problem in AIS. According to the above the bank has not enough
human resource to use AIS and this leads bank ineffective and the bank must improve this.
4.5. General observed problem in lion international bank
Table 4.5 general observe problem/possible problems observed in lion international bank
Question Respondents
What is the possible problem No Percentage
observed in lion international
bank
Delay in process 3 30
Data redundancy 1 10
Delay on communication 4 40
In consistency 2 20

Total 10 100
(Source: Questionnaire, 2015)
According to the questionnaire 40% of the respondent agreed that among the possible problem
observed in the bank communication delay is the major one. The bank should use more recent
software to make its service faster and free of delay in communication. Among the respondent
30% agreed delay in process they belief that when processing data’s sometimes a networking
problem that makes the data processing to delay it mainly happen when the bank serve member
of customers at the same time. There is also 20%of respondents who believe in about data

25
inconsistency and the remaining 10%of of respondents agreed data redundancy is the as a
problem observed in the bank. Therefore the bank should minimize the above problems to be
effective
4.6 standard service provide by the bank
Table 4.6 standard service provide by the bank through the aid of AIS, over past years
Question Respondent
How do you rate the standard No Percentage
service provider in the bank
through the aid of AIS over
the past years
Have improved 5 50

Have little improvement 2 30

Have not charged 0 0.00
Have deteriorated 0 0.00
Do not know 1 20
Total 10 100
(Source: Questionnaire, 2015)
Based on the data 30% of the respondents know standard service that the bank offer through the
aid of accounting information system have shown little improvement and 60% of the respondent
understand that over the past year there has been an improvement in the service provide through
the help of accounting information system on the hand the research also get 10% of respondent
who say do not know the standard service in the bank through the aid of AIS over the past years.

4.7 contributions of AIS towards customer satisfaction

Table 4.7 contributions of AIS towards customer satisfaction

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Question
In what way does AIS contribute to the No
satisfaction of customers
By keeping confidential data
Reducing time
Rendering fast service
Did not increase customer satisfaction
Others
Respondents
Percentage
2 20
2 20
6 60
0 0.00
0 0.00

Total 10 100
(Source: Questionnaire, 2015)
From the above table, the researcher understands that greater than half of the respondents agreed
on AIS contribute to customer satisfaction in a way that it renders fast service know. 60% 0f
respondents believes rendering fast service is the only way that AIS contribute to the
satisfactions of the customer and 20%of the respondents understand that for the satisfaction of
customers AIS contribute by reducing time that customer spent by staying and waiting for
service . Others in for those AIS give customer satisfaction by keeping confidential data i.e.20%.
The remaining is no contribution towards the satisfaction of customer. So the bank increases
rendering fast service, keeping confidential data and reducing time for the satisfaction of
customer.

4.8 benefit of AIS to the bank

Table 4.8 benefits of AIS to the bank

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Question Respondents
In what way AIS add value to your bank. You can No Percentage
circle tick more than one choice
Improve your quality and reduce cost of service 2 20
It improves efficiency 1 10
It improves decision making 2 20
It improves chain of communication 2 20
It adds value stated above 3 30

Total 10 100
(Source: Questionnaire, 2015)
In this question the respondents applied that AIS plays an essential role in a variety of tasks in
the management of lion international banks to extent 20% % of the respondents agreed that AIS
to the bank in away listed in the above table improving quality and reduce the cost of service
10% of respondents agreed on that AIS improve efficiency for the bank. In case of decision
making also 20% respondent replay as AIS have benefit to the bank, there are also respondents
that agree that AIS improve chain of communication (it constituent 20%). Almost 70 % of
respondent said that to ensure safety of customer’s confidential data AIS of the helps to maintain
each customer’s confidential data in separated file and fillies did not expose to any Third party
without permit lion of the customers and 30% of the respondents replied that customers
confidence data are kept in secret separately from their account and in need the
Bank can refer it at any time

4.9. Effect of AIS on the bank

Table 4.9 effect of AIS on the bank

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Question Respondents
How AIS administration of your bank is No Percentage
change /affects your income in the last
year
Increase income 6 60
Decrease income 0 0.00
Not changed its income 2 10
Not sure 2 30

Total 10 100
(Source: Questionnaire, 2015)
As it can observed on the table above 60% of the respondents said that AIS helped the bank to
increase its income while 20% of the respondents said that AIS do not sure about change income
of the bank there is also 20% respondent who replay AIS do not changes in income of the bank.
As shown in the above table the effect is good for the bank so the bank improve the use of AIS.
4.10 Customer comment on AIS
Table 4.10 customer comments on AIS
Question Respondent
Do you request the customer No Percentage
for comment on your service
banked by AIS?
Yes 6 60
No 4 40
Total 10 100
(Source: Questionnaire, 2015)
According to 60% respondents the bank requests customer for comment about service of the
bank by AIS. Only 4 respondents which constituent 40% from the whole said as the bank do not
give chance for comment to customers for comment about banking service baked by AIS .for
respondent who says ‘’yes’’ it is very good and the bank should initiate all customers to give
comment on AIS in the future to improve his service .

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4.11 Past years’ experience on AIS
Table 4.11 past years’ experience on AIS
Question Respondents
In your experience of being No percentage
user of AIS during the last
years has been
Very positive 3 30
Positive 6 60
Okay 1 10
Negative 0 0.00

Total 10 100

(Source: Questionnaire, 2015)

The respondents who account about 30% of agreed with the quality of AIS provide them very
positively in past years about more than half of the respondents 60% are to safe extent satisfied
and they said it has been positive that being users of AIS over that last year’s and there is one
respondent who say okay, therefore have to continue the use of AIS for the future experience.

CHAPTER FIVE
5CONCLUSIONS AND RECOMMENDATION

30
5.1 conclusions
Accounting information system is the most important tool to implement effective administration
system and the entire activities of a given organization. Its ultimate goal is to make the
administration of the organization more effective so as to improve the effectiveness of employee
and to provide routine and non- routine information which is used for decision making and also
to attract customers. Asked on the analysis carried out in previous chapter the following
conclusion are drown
 The standard of service of the bank has improved through the use of accounting
information system
 The accounting information system has improved the bank customer relation by
rendering effective service over the past few years and also it contribute to the
satisfaction of the customer by rendering fast service
 Using accounting information systems add value to the bank in money ways such as
improving Quality of financial statement decision making
 There is problem of delay in communication which directly affects banking transaction to
be performed ineffectively.
 LIB bank has not enough human resource to use AIS and this leads the bank ineffective.
 Over the past year there has been an improvement in the service provide through the help
of accounting information system.
 Service backed by AIS helped LIB bank to increase its income
 AIS helps to maintain each customer’s confidential data in separated file and fillies did
not expose to any Third party without permit LIB customers.
 The staff of the bank has medium level of education background.

5.2 Recommendation
Based on the finding and conclusion of the study the following recommendation is forwarded.

31
  Lion international bank administration must offer training for staff to ensure and develop
their knowledge of AIS this enable the staff of the bank to make service reliable and
effective.
 The bank must maintained un independent AIS department separately this has advantages
for example based on frequent report that AIS department provide the administration of
the bank can take measure also independent provide the administration of the bank can
take measure and also independent AIS department can help the bank to provide reliable
financial statement for external users.
 To avoid delays in communication the bank must consolidate or networking all the
activities of the bank for effective bank system.
 In order to be effective as well as efficient in the engagement at least the majority of the
employees have fully aware of accounting information system and to do this lion bank
must do to upgrade his employees about AIS knowledge.
 The bank must render fast service, keeping confidential data and reducing time that
customer spent by staying and waiting for service ,when the bank do this the amount and
satisfied customers are increased and also the bank profit also increases.
 LIB bank should initiate all customers to give comment on his service backed by AIS in
order to improve his service in the future and to be leading bank in the domestic by
increasing his strong side and correcting his weak side.
 LIB bank has not enough human resource to use AIS and this leads bank ineffective so
the bank must improve it by hiring employees who have profession in accounting
information system in order to make advanced decision and satisfy the needs of
customers.

Reference
1. James A.Hall. Accounting information system.7th edition 2009, U.S.A
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2. Marshal Romney, Accounting information system, 9th edition 2011, Arizona
3. Paul John Steinhart, Accounting information system, 9th edition 2013. Arizona
4. Richard Davis Accounting information system 10th edition 2014
5. Vernon Richardson accounting information system 8th edition 2013
6. Barry E Cushing Accounting information system 8th edition 2002
Website
1. Amazon.com
2. (http://www.ehow.com) about accounting information system

Appendix
Dear respondents

33
 I am doing a research for partial fulfillment of my bachelor of art degree (BA) in accounting
and finance in Mekelle University. The objective of this study is to assess the accounting
information system of lion international bank in Mekelle city. These inspire me to conduct a
research on this specified area of study in this city. Quality and success of this study depends on
your kind and genuine information. All information you provide will be used for academic
purpose only. Furthermore, your response will be represented in aggregate and will not be
disclosed. Thus I am kindly requesting you to fill and return this questionnaire.
I am grateful for your time and effort that you have invested in filling this questionnaire!!
NB; DO NOT REQUIRE TO WRRITE YOUR NAME IN THE PAPER THAT YOU ARE GIVEN.

QUESTINNAIRE
1. Your gender?
A. Male
B. Female
2. Your age
3. Your marital status
Unmarried married Divorced Widowed
4. What is your education level?
A. Primary school
B. Certificate
C. Diploma
D. First degree
E. Post graduate
Other………………………..
5. Your position in the organization?
A. Supervisor
B. Junior officer customer
C. Clark/customer service officer
D. Manager
E. Auditor
F. Senior accountant
6. Service year?

34
 A. Below 5 year
B. 5-10 year
C. Above 10 year
7. On scale of 0-5 rate the capacity of management of Lion international bank about the
awareness of AIS 0 1 2 3 4 5?
A. 0=no awareness
B. 5=total awareness
C. Partial awareness
8. Is t-here a strong of manpower in AIS processing department?
A. Yes
B. No
9. From question number four your answer is NO, specify the reason;
……………………………………………………………..
…………………………………………………
10. What are the possible problems observed in Lion international bank?
A. Daily in process
B. Data redundancy
C. Daily communication
D. In consistency
11. How do you rate the standard service provide in the bank through the aid of AIS over the
past years?
A. Have improved
B. Have deteriorated
C. Do not known
D. Have not changed
12. In what way does AIS contribute for the satisfaction of customers?
A. By keeping confidential data
B. Reducing time
C. Rendering fast service
D. Did not increase satisfaction of customers
Other specify…………………………………………….

35
13. In what way AIS add value to your bank? You can tick or circle more than
One choice
A. It improves quality and reducing the cost the product or service
B. It improves efficiency
C. It improves decision making
D. It improves the chain of communication
E. It adds all value stated above
Other place specify ……………..
14. How AIS administration of your bank is changes/affect your bank income in the last years?
A. Increased income`
B. Not sure
C. Not changed
D. Decreased its income
E. Others specify……………………..
15. Do you request the customer for comment on your service backed by AIS?
A. Yes
B. No
16. From question number four your answer is NO, specify the reason;
…………………………………………………………………………
17. In your experience of being a user of AIS during the last years has been?
A. Very positive
B. Positive
C. Okay
D. Negative
E. Other place specify…………………………………………………
18. Among the following AIS which one is used by LIB
A. Core banking
B. Electronic Data Processing (EDP)

36