COMPUTERISED ACCOUNTING SYSTEMS ON EFFECTIVENESS OF FINANCIAL

REPORTING: A CASE STUDY OF STANBIC BANK,

MBARARA BRANCH.

BY

SENGOBA DEUSIDEDIT

D12/BSU/BBA/398

A RESEARCH REPORT SUBMITTED TO THE FACULTY OF BUSINESS AND

DEVELOPMENT STUDIES IN PARTIAL FULFILLMENT OF

REQUIREMENTS FOR THE AWARD OF BACHELORS’

DEGREE IN BUSINESS ADMINISTRATION OF

BISHOP STUART UNIVERSITY.

MAY, 2014
DECLARATION
I Sengoba Deusidedit, declare that the information contained in this research report is my
original work and has never been presented to any higher institution of learning or any
University for the award of a degree.

Signature:…………………………….. Date:……………………………………

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APPROVAL
This is to certify that this research was conducted in my guidance as the university supervisor.

MR. AGUME .K. ANTHONY

SUPERVISOR.

Signature:…………………………….. Date:……………………………………

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DEDICATION
This report is dedicated to my Parents Mr. Tumwesigye Gerald dad , Mrs. Tumwesigye Hope
Mum , my Brothers and Sisters , friends for ever members who have tirelessly and generously
supported me financially and morally from child hood all through life.

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ACKNOWLEDGEMENT.
It is with deep gratitude that I thank God for giving me the life, the strength and the wisdom I
needed to accomplish this report. Heartfelt thanks go to my supervisor, Mr. Agume .K. Anthony
for the guidance, support and the supervision that enabled the successful completion of this
report.

A special thank you to my Parents Mr. Tumwesigye Gerald dad, Mrs. Tumwesigye Hope Mum,
my Brothers and Sisters for all the financial and moral support that they have given me, may the
Almighty God reward you tremendously.

I also extend my sincere gratitude to my great friends, friends for ever members and all my
discussion group members for their friendly advices and encouragement. I also thank all those
who have in any way contributed towards the successful completion of my academic struggle.
May God bless you all.

Finally, I want to Thank God who has given me life, strength, courage, guidance and wisdom in
all my endeavors.

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TABLE OF CONTENTS.
DECLARATION..............................................................................................................................i
APPROVAL.....................................................................................................................................ii
DEDICATION................................................................................................................................iii
ACKNOWLEDGEMENT..............................................................................................................iv
TABLE OF CONTENTS.................................................................................................................v
LIST OF TABLES........................................................................................................................viii
ABSTRACT....................................................................................................................................x
LIST OF ACRONYMS..................................................................................................................xi
CHAPTER ONE............................................................................................................................1
1.0 Introduction................................................................................................................................1
1.1 Background to the Study...........................................................................................................1
1.2 Statement of the problem...........................................................................................................4
1.3 Purpose of the study...................................................................................................................4
1.4 Objectives of the study..............................................................................................................5
1.5 Research Questions....................................................................................................................5
1.6 Scope of the study......................................................................................................................5
1.6.1 Content scope..........................................................................................................................5
1.6.2 Geographical scope.................................................................................................................5
1.6.3 Time scope..............................................................................................................................6
1.7 Significance of the study...........................................................................................................6
CHAPTER TWO:LITERATURE REVIEW..............................................................................7
2.0 Introduction................................................................................................................................7
2.1 Definition Computerized Accounting Systems.........................................................................7
2.1.1 Accounting..............................................................................................................................8
2.1.2 Components of Computerized Accounting Software.............................................................9
1. Preparation of accounting documents..........................................................................................9
2. Recording of transactions............................................................................................................9
3. Preparation of trial balance and financial statements..................................................................9
2.1.3 Factors considered before computerizing the accounts department......................................9
2.1.3 .1 Size and type of business....................................................................................................9
2.1.3 .2 Timing aspect....................................................................................................................10

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2.1.3 .3 Link between applications................................................................................................10
2.2 Benefits of Computerized accounting systems........................................................................10
2.2.1 Limitations of Computerized accounting............................................................................15
2.3.1 Benefits of Computerized Accounting over Manual Accounting.........................................18
2.4 Financial Reporting and its Qualities......................................................................................19
2.4.1 Characteristics of quality financial reports...........................................................................22
2.5 Relationship Between Computerized Accounting And Financial Reporting..........................24
2.6 Conclusion...............................................................................................................................24
CHAPTER THREE:RESEARCH METHODOLOGY...........................................................26
3.0 Introduction..............................................................................................................................26
3.1 Research Design......................................................................................................................26
3.2 Area of the study......................................................................................................................26
3.3 The Population of Study..........................................................................................................27
3.4 Sample Size and Selection Method.........................................................................................27
3.5 Sampling and Sampling technique..........................................................................................27
3.6 Source of Data.........................................................................................................................28
3.6.1 Primary Data.........................................................................................................................28
3.6.2 Secondary Data.....................................................................................................................28
3.7 Data collection method............................................................................................................28
3.7.1. Questionnaire.......................................................................................................................29
3.7.2. Interview..............................................................................................................................29
3.7.3 Key Informant Interviews.....................................................................................................29
3.7.4 Documentary Analysis..........................................................................................................29
3.8 Data collection Procedure........................................................................................................29
3.9 Ethical Considerations.............................................................................................................30
3.10 Data processing and Analysis................................................................................................30
3.13 Limitations faced during the study.........................................................................................31
CHAPTER FOUR:PRESENTATION, DISCUSSION AND ANALYSIS OF FINDINGS....33
4.0 Introduction..............................................................................................................................33
4.1 The nature of respondents........................................................................................................33
4.2 Findings on the uses of a computerized accounting system....................................................36
4.3 Findings on the pros and cons of a Computerized Accounting System..................................44

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4.4 Finding on the qualities of Financial Reports generated by a Computerized Accounting
System............................................................................................................................................46
4.5 The relationship of computerized accounting systems effectiveness on financial reporting...48
4.5.1 Computerized accounting system effectiveness and financial reporting..............................48
4.5.2 The relationship between computerized accounting systems effectiveness and financial
reporting.........................................................................................................................................48
CHAPTER FIVE:DISCUSION, RECOMMENDATIONS AND CONCLUSION................50
5.0 Introduction..............................................................................................................................50
5.1 Discussion of major findings from the Study..........................................................................50
5.2.1. To determine the use of a computerized accounting system................................................50
5.2.2 To finds out the pros and cons of computerized accounting system to financial institutions.
.......................................................................................................................................................51
5.2.3 To establish the qualities of financial reports generated by a computerized accounting
system............................................................................................................................................51
5.3 Summary of Major Findings....................................................................................................52
5.3.1 To determine the use of a computerized accounting system.................................................52
5.3.2 To find out the pros and cons of computerized accounting to financial institutions............53
5.3.3 To establish the qualities of financial reports generated through computerized accounting.
.......................................................................................................................................................53
5.4 Conclusion...............................................................................................................................53
5.4.1 To determine the use of a computerized accounting system.................................................53
5.4.2 To find out the pros and cons of computerized accounting to financial institutions............54
5.4.3 To establish the qualities financial reports generated by a computerized accounting system.
.......................................................................................................................................................54
5.5 RECOMMENDATION...........................................................................................................54
5.6 Areas of further study..............................................................................................................56
REFERENCES..............................................................................................................................57
APPENDIX 1 (RESEARCH QUESTIONNAIRE).......................................................................61

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LIST OF TABLES
Table 1: Showing the nature of respondents..................................................................................34
Table 2: Responses on whether, the company uses a computerized accounting system for its
operations.......................................................................................................................................36
Table 3: Responses showing what major tasks are performed by the computerized accounting
system............................................................................................................................................37
Table 4: Responses, showing the financial statements (reports) generated by the computerized
accounting system..........................................................................................................................37
Table 5. Showing whether Stanbic Bank has a computerized accounting system........................38
Table 6: Showing whether Computerized accounting has enhanced the quality of financial
reports in Stanbic Bank..................................................................................................................39
Table 7: Showing whether Stanbic Bank has qualified staff in dealing with computerized
accounting system..........................................................................................................................39
Table 8: Showing whether the computerized accounting system maintains error free records.....40
Table 9: Showing whether computerized accounting has eased the transaction processing in
Stanbic Bank..................................................................................................................................40
Table 10: Showing whether the staffs that work in the current system have sufficient experience
that keep pace with a computerized accounting system................................................................40
Table 11: Showing whether the expected benefits obtained from applying a computerized
accounting system are greater than the cost of obtaining it...........................................................41
Table 12: Showing whether Administration can access daily reports on activities in a
computerized accounting system...................................................................................................41
Table 13: Showing whether stanbic bank can measure the performance of its staff in the light of a
computerized accounting system...................................................................................................42
Table 14: Showing whether the computerized accounting system provides enough information
for internal and external control....................................................................................................42
Table 15: Showing whether the computerized accounting system is more efficient and flexible
than the manual system..................................................................................................................43
Table 16: Showing whether the computerized accounting system provides easy storage,
reference and access to information..............................................................................................43
Table 17: Showing whether computerized accounting system has simplified most of the
accounting requirements of Stanbic Bank.....................................................................................44

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Table 18: Responses, on the pros of a computerised accounting system......................................44
Table 19: Responses, on what the cons of a computerized accounting system are.......................45
Table 20: Responses on preferences between manual computerised accounting systems............45
Table 21: Responses on reasons for preference of the option chosen in table 20 above...............46
Table 22: Showing findings on what the qualities of financial reports generated by a
computerized accounting system are.............................................................................................46
Table 23: Chart 1: Showing findings on how often the respondents’ access financial reports......47
Table 24: Showing findings on whether transactions pass unauthorized and why........................47
Table 25: Responses on the relationship of computerized accounting on financial reporting......48

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ABSTRACT
This study was based on computerized accounting effectiveness and financial reporting at
Stanbic Bank, Mbarara Branch. The objectives of the study were; to determine the uses of a
computerized accounting information system, to find out the pros and cons of computerized
accounting to financial institutions, and to establish the qualities of financial reports generated by
computerized accounting system. The researcher used qualitative and quantitative research
designs with a sample of size 15 respondents. Both primary and secondary data were used and
the data collection methods were questionnaires, observation interviews and investigative
procedures.

The study revealed the existence of a computerized accounting system at Stanbic Bank Limited
and this system has enhanced operational efficiency. It has not only improved the quality of
financial reports but also provides timely reports on daily activities and has to a certain extent
helped to minimize the risk of fraudulent transactions. The study established that computerized
accounting had a great impact on quality of financial reports and that many financial statements
were generated through the computerized accounting system. The findings shows a strong
significant positive relationship between the variables (r=0.861**, p>0.01) which implies that
computerized accounting and financial reporting at Stanbic Bank Uganda are strongly related.

The computerized accounting system is of a great importance to the running of the company but
is also associated with its own weaknesses that hinder efficiency in the company’s business
environment. A continuous culture of utilizing a computerized accounting system is
recommended.

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LIST OF ACRONYMS
IRC - Internal Revenue Code
URA - Uganda Revenue Authority
VAT - Value Added Tax
E-tax - Electronic Tax System
PAYE - Pay as you earn
CAS - Computerized Accounting System
SPSS - Statistical Package for Social Scientists

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 CHAPTER ONE

1.0 Introduction
This chapter discusses the background to the study, statement of the problem, purpose of the
study, research objectives and questions guiding the study, significance and scope of the study
and the definition of key terms.

1.1 Background to the Study

Globally, in United States of America, computerization of banking departments plays an
increasing important role in economy and society at large, of which computer applications
knowledge is a pre-requisite in every profession, opportunities are enhanced, whatever be the
nature of the profession chosen. The presence of this small box in day-to- day function is
overpowering and it has become the backbone of all banking accounting systems. Business
depends on computers to handle all kinds of accounting and bookkeeping jobs. Banks use
computers to record money deposited and withdrawn. You can also book and plan your entire
travel agenda, including your ticket booking through e-mail facility, Boyett et al., (2005). It is
globally belief that the computers are able to provide useful information if properly fed with a
reasonable input or it will result in “Garbage in Garbage out”. The use of computer to carry out a
very wide range of activities for work, study and leisure has become part of our everyday life. It
is no longer something that you may want to use if you are interested; rather like motor car it is
an essential part of our lives, Loudon et al., (2001).

The primary objective of an accounting function in an organisation is to process financial

information about the activities of the organisation and prepare financial statements at the end of
the accounting period. The modern method of accounting is based on the system created by an
Italian monk Fra Luca Pacioli. He developed this system over 500 years ago. This great and
scientific system was so well designed that even modern accounting principles are based on it
(deSantis, 2010)

Organizations seem to have realized that it is in their interest to run business processes while
they are monitored by computerized accounting systems as opposed to manual given the great
merits the former posses over the later. Accounting is a financial method used by businesses to
collect, organize, process and summarize data for reports and statements. Accounting is used to
keep track of business trends and to report on the relevant facts within the business. Computer
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and business Software allows more efficient processing and organization of data. Computerized
accounting system refers to the integration of different component systems to produce
computerized books of accounts and computer-generated accounting records and documents.
ttp://www.bir.gov.ph/reginfo/regcas.htm

Computerized Accounting means that the "books" of a business are managed on a computer.
Quick Books, for instance, would be an example of computerized accounting (there are many
different software’s) Using Microsoft Excel to organize a business' financial information is also a
manner of computerized accounting. http://wiki.answers.com. Accountants measure a business
entity's income, expenses and changes in resources. Back in the day, prior to the widespread use
of spread sheet and computer applications, Accountants used journals and ledgers in which they
recorded business transactions, hence, the term keeping the books. As computer applications
became main stream, this keeping of the books accounts has gradually migrated into
computerized spreadsheets. Gradually, Accounting systems dedicated to this function were
developed and the term Computerized Accounting was born http://wiki.answers.com

Computer in commercial and industrial settings have been around for several decades. The
banking industry computer has been used in various areas carrying out their day-to day activities
through automated Teller Machine, electronic funds transfer, electronic data exchange, smart
cards, MICR cheques, local area network, wide area work, point of sales system, electronic home
and office banking, telephone banking, make cheque available program, computerized credit
rating, daily calculation of accounts program, local accounting systems, CD accounting system,
saving accounting system and safe deposit box accounting system. Computer has immensely
aided in banking industry or baking sector in the areas of managerial position, sales department
and other various department in the bank. The use of programmed decision making offers several
important advantages to the firm, since the computer is potentially capable of making better
programmed decision than the human user. One of the most existing things about the information
and retrieving is that they are used oriented, Laura (2003).

Accounting information system being an asset of methods, people, procedures and devices
regularly used to process business transactions, Hermanson et al, (1987), information is therefore
much more useful when it is conveyed through a proper reporting system which gives it good

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qualities such as accuracy and reliability among others and this can be achieved by use of
computerized accounting system.

In Uganda, computers are rapidly changing the nature of work of most accountants and auditors
with the aid of special software packages, accountants summarize transactions in standard format
employed in financial analysis. These accounting packages greatly reduce the amount of tedious
manual work associated with data management and record keeping. A growing number of
accountants and auditors with extensive computer skills are specializing in correcting problems
with software or developing software to unique data management and analytical needs, Horald et
al., (2005).

Computerization has provided self-service facilities (automated customer service machines) from
where prospective customers can complete their account opening documents direct online. It
assists customers to validate their account numbers and receive instruction on when and how to
receive their chequebooks, credit and debit cards. Computerization deals with the physical
devices and software that link various computer hardware components and transfer data from
one physical location to another, Laudon and Laudon (2001). ICT products in use in the banking
industry include Automated Teller Machine, Smart Cards, Telephone Banking, MICR, Electronic
Funds Transfer, Electronic Data Interchange, Electronic Home and Office Banking.

The banking industry in Uganda has continued to witness tremendous changes linked with the
developments in computerization over the years. Stanbic Bank to re-examine their service and
delivery systems in order to properly position them within the framework of the dictates of the
dynamism of computerization, Woherem (2000). The quest for survival, global relevance,
maintenance of existing market share and sustainable development has made exploitation of the
many advantages of computerization through the use of automated devices imperative in the
industry. This situation will be seriously investigated and we looked for significance of
computerization of accounting systems on financial reporting with particular reference to stanbic
Bank, Mbarara Branch.

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1.2 Statement of the problem
The advancements in information technology have eventually led to the introduction of
Computerised Accounting Systems in corporate reporting to help produce relevant and faithful
representative financial reports for both management and external users for decision making
(Greuning, 2006). The many advantages from the use of these systems have led many to
conclude that Computerised Accounting Systems in Corporate Reporting is the ‘engine of
growth’ in business organisations (Frenzel, 2006). There has been an increase in accounting
problems associated with financial reporting hence killing most business that fall victims of this
circumstance. Here, we pursue the aspects associated with manual accounting in comparison
with computerised accounting in order to find out which system will be in a better position to
improve on the quality of financial reporting and accounting operations of a business.

Modern technology has brought about the use of computer system in all areas of our human
endeavour’s, in Uganda and other African countries workers sees this as an attempt to replace
them and to result them into mass retrenchment or loss their jobs, Iyabi (2007). They always
believe that where computers are installed will require less human effort to perform the desired
operation. In the advert of computers, the work of accountants and auditors has changed rapidly
with the aid of special software packages; accountants summarize transactions in standard
formats by financial records and organize data in special formants employed in financial
analysis. Despite most high profile companies having 100% computerized accounting systems;
there are still difficulties in tracking down errors and at the same time, time consuming, Adetayo
et al., (2009). Given that business enterprise performance in the Stanbic Bank, Mbarara Branch
in various departments has been persistently poor, the study intended to establish the factors
behind this persistent negative situation. On the basis of this background the researcher was
convinced that there was need to evaluate the financial reporting with accounting packages.

1.3 Purpose of the study

The research study was to establish the relationship between computerized accounting systems
and financial reporting especially on quality financial reporting with particular reference to
Stanbic Bank, Mbarara Branch. The study further presents appropriate recommendations on how
to avert/improve the negative situation in the rural area of Uganda.

1.4 Objectives of the study

The objectives of the study were:-
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a) To evaluate the strength of the computerized accounting system used by Stanbic Bank ,
Mbarara Branch.
b) To find the pros and cons of computerized accounting to financial institutions.
c) To establish the qualities of financial reports generated by computerized accounting systems.
d) To establish the relationship of computerized accounting and financial reporting in financial
institutions in Uganda

1.5 Research Questions

The study was guided by the following research questions:-
a) How efficient is the computerized accounting system that Stanbic Bank is using?
b) What are the pros and cons of computerized accounting over manual accounting in financial
institutions?
c) What are the qualities of financial reports produced by a computerized accounting system?
d) What are the relationship of computerized accounting and financial reporting in financial
institutions in Uganda?

1.6 Scope of the study

1.6.1 Content scope

The study was limited to the computerization of accounting systems and financial reporting . The
research will be centered upon computerized accounting while examining what accounting is
The researcher investigated the to evaluate the strength of the computerized accounting system
used by Stanbic Bank , Mbarara Branch, to find the pros and cons of computerized accounting to
financial institutions, to establish the qualities of financial reports generated by computerized
accounting systems and to establish the relationship of computerized accounting and financial
reporting in financial institutions in Uganda . The other aspect to be examined is financial
reporting while tackling the qualities and or the characteristics of financial reports. It look at
financial reporting as the dependent variable and the computerization of accounting systems as
the independent variable.

1.6.2 Geographical scope

The research covered the financial reports of Stanbic Bank Uganda Limited, Mbarara branch, in
Mbarara district located in Western Uganda . This particular case study was chosen because it
was of convenience to the researcher in terms of its’ type of business, the researchers’ area of
residence, language and availability of data for the research work.
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1.6.3 Time scope
The study covered financial reports generated within the period of 2011 to 2014. This period
being the most recent and given the limited research time frame, the researcher was able to cover
reports of more than two years.

1.7 Significance of the study

The findings were of great importance in the following ways:-
This research was of prime benefit to the management and staff of Stanbic Bank Uganda
Limited, not only for the Mbarara branch, Mbarara for other branches as well, since it enable
them identify and understand the risks and problems associated with computerized accounting
and financial reporting and how best to combat such problems.

This information was of great importance to other business companies and bodies that have
adopted and those that are yet to adopt the system of computerized accounting in knowing the
pressure points to be emphasized and well managed in order to pursue the system successfully.

The study was of great benefit to the students who enable to access this information that guide
them in research and equip them with knowledge as far as manual and computerized accounting
is concerned and the importance of computerized accounting as far as financial reporting is
concerned.

The various stakeholders like Ministry of Ministry of Finance, Planning and Economic
Development, International Bodies like USAID, World Bank and International Monetary Fund,
and Bank of Uganda may establish the various computer packages used in accounting systems,
effects of computerized accounting systems on business enterprise performance, challenges
met by Stanbic Bank in using accounting system and subsequently come up with
recommendations at various levels of leadership to avert/ improve the negative situation.

The study may enable management to understand the significance of preparing quality and reliable
financial reports. The study point out weakness in the accounting system which management
needs to address. Other researchers may use the report as literature review in order to improve on
their research topic in another period.

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 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction
This section of literature review focused on the concept of computerized accounting system in
relation to financial reporting. The literature was presented in the order of the stipulated
objectives of the study.

2.1 Definition Computerized Accounting Systems

Computerized accounting. Jennifer VanBaren (Computer based Accounting: 1997) defines
computerized accounting as the accounting done with the aid of a computer. It tends to involve
dedicated accounting software by digital spreadsheets to keep track of a business’ or clients
financial transactions. Computerized accounting involves the use of computers to handle large
volume of data with speed, efficiency and accuracy aimed at overcoming the fundamental
however, does not mean change in principle, the principle of accounting remains the limitations
of manual accounting and hence producing quality and reliable work same with day books
ledgers double entry only that the accounting processing is done by computer packages (ACCA,
2007).
Marivic (2009) described a computerized accounting system as a method or scheme by which
financial information on business transactions are recorded, organized, summarized, analyzed,
interpreted and communicated to stakeholders through the use of computers and computer based
systems such as accounting packages.

He emphasized that it’s a mechanized process of facilitating financial information inflows as

well as the automation of accounting tasks such as database recording and report generation.
Marivic adds that keeping accurate accounting records is a vital part of any organization. Apart
from helping it to keep its float financially and legal, it is a requirement of funding bodies or
donors. However computerized accounting system involves the use of computers to handle large
volume of data with speed, efficiency and accuracy aimed at overcoming fundamental challenges
which do not change the principle. The principle of accounting remains the limitations of many
accounting and hence producing quality and reliable work.

McRae (1998) adds that computerized accounting systems are advantageous in consolidating
information channels meaning that files that were previously been duplicated by several
19
departments will now be consolidated into single file. A computerized accounting system is a
delivery system of accounting information for purpose such as providing reliable accounting
information to users (Nash and Hearly, 2003).

Computerization of system can certainly help in minimizing some errors when preparing
accounting records (Mike et al, 2006). Other view adds that computerized systems are
advantageous in consolidating information channels meaning that files which had previously
been duplicated by several departments are now consolidated into a single file (Mc Rae, 1998). A
computerized accounting system is a system that uses computers to input, process, store and
output accounting information in form of financial reports. It records all transactions that
routinely deal with the events that affect the financial position and performance of the entity.

Computerized accounting System (CAS) refers to the integration of different component systems
to produce computer books of accounts and computer-generated accounting records and
documents. Frank wood (Business Accounting in a computerized environment 2002). According
to ACCA (2009), Computerized accounting system involves the use of computers to handle large
volumes of data with speed and efficiency aimed at overcoming physical limitations of manual
accounting and producing quality reports.

2.1.1 Accounting.
As many professional accountants and auditors state - accounting is a language of business
which is accepted in all developed and developing countries, but what exactly is accounting?
Well, accounting has been defined by many authors in various ways. According to Osmond,
(2011), accounting is the way business owners manage their company’s financial information in
orders to make better decision regarding their companies. Meigs & Meigs (1986) also defines
accounting as the art of measuring, communicating and interpreting financial activities. I do
agree with both authors since the meaning derived out of their ideas are similar and state the
actual art behind accounting

Frank wood (2002) defines Accounting as a financial method used by businesses to collect,
organize, process and summarize data for reports and statements. Accounting is used to keep
track of business trends and to report on the relevant facts within the business. Computer and
business Software allows more efficient processing and organization of data. According to Mc
Laney and Atrill (2005), Accounting is the systematic recording, reporting, and analysis of
20
financial transactions of a business. They further note that the person in charge of accounting is
known as an accountant, and this individual is typically required to follow a set of rules and
regulations, such as the Generally Accepted Accounting Principles. Accounting allows a
company to analyze the financial performance of the business, and look at statistics such as net
profit.

2.1.2 Components of Computerized Accounting Software

Accounting software’s are used to implement computerized accounting system. The
computerized accounting is based on the concept of database; it is basic software which allows
access to the data contained in the database. The following are the components of computerized
accounting software.

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1. Preparation of accounting documents : Computers help in preparing accounting documents
like cash memo, bills, invoices and accounting vouchers. Here computerized accounting
systems have user defined templates which will provide faster, accurate entry of transaction
and therefore all documentation and reports can be generated automatically.

2. Recording of transactions: Everyday business transactions are recorded with the help of
computer software. Every account and transactions is assigned a unique code where the
grouping of account is done at the first stage. This process simplifies the work of recording
the transaction. Marivic (2009) argued that computerized packages will minimize human
errors in transactions recording as in the system there is the existence of reference of every
transaction.

3. Preparation of trial balance and financial statements.: After recording of transactions, the
data is transferred into ledger accounts automatically by the computer. Trial balance is
prepared by the computer to check accuracy of records, with the help of trial balance; the
computer can be programmed to prepare the statement of comprehensive income and the
statement of financial position.

2.1.3 Factors considered before computerizing the accounts department.

2.1.3 .1 Size and type of business: The method of producing accounts would largely depend on
the above. In a very small company a single person may be able to have a time to produce
all the information or accounts required but as volume of the operations increases, more
people in form of computers may be employed. (Olive and Chapman, Data processing and
Information Technology 1993). In some company’s payroll, invoicing would be a matter of
simply paying a member of staff or copying customer order, whilst in a complex receipts
and payments of company’s operations results the systems to be coped hence need for a
study before computerization.
2.1.3 .2 Timing aspect: Some information requirements are less time critical than other say
payroll and final statements may only be produced once a month, whereas the invoices may be
produced virtually all the time. The timing requirements for information for the accounts
department will have a considerable bearing on the methods and equipment needed to produce it.
(Brightman 1980).

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2.1.3 .3 Link between applications : S. NORA(Computerization of Society 1981),Where data is
recorded for more than one information requirements different methods of processing it may
be suggested say a transaction in the sales department and accounts department may not
only be needed to be used in their respective departments but all needed by others to amend
records. A manual system would require separate operations to satisfy the requirements
whereas a computerized system would amend them automatically. This ability of computer
system to perform a variety of processing operations on a single pool of data contrast
sharply with manual system where data used by one individual becomes in accessible to
another.

2.2 Benefits of Computerized accounting systems:

Different scholars have expressed views on computerized accounting packages as below: A
computerized package can quickly generate all types of records needed by management. Data
processing and analysis are faster and more accurate which meets the manager’s needs for
accurate and timely information for decision making (Mc Bride, 2000).

The benefits of computer accounting include among others improving reporting to users, better
record keeping and minimized errors. With the system automatically generating reports, a lot of
time will be saved in the long run and unnecessary cost. Few staff will also be needed to operate
the system (Vanbriefing, 2005).

In support of above view, computerized accounting is used to maintain journals, ledgers and
prepare financial statements (Meigs and Meigs, 1998). Easy posting transaction to ledger and
principles of double entry to do accounting function using computerized accounting system. It
can be largely automated by use of systems (Cook, 2001).

Better Record keeping and data Security. Whilst human error can still corrupt your data e.g.
entering figures in wrong fields, a good package will reduce this possibility and ensure that there
is a reference for all transactions e.g. for every cheque or receipt entered/created. However, this
does not eliminate all manual work. Vouchers, invoices, receipts etc. will still need to be filed in
a logical order and details of what was entered onto the system should also be recorded on paper.
This will help when you need to track errors, in the annual audit and if disaster strikes and you
have to re-enter all transactions. For record-keeping and compliance with the law, businesses
often must keep financial records for years. It is extremely difficult to keep copies of paper
23
records in multiple locations, and a catastrophic incident that results in the destruction of paper
records can damage a business in many ways. With a computerized accounting solution, files and
important financial information can be stored online or on off-site data cartridges--or both--
giving a business the level of redundancy that it needs to recover from a catastrophe and ensuring
compliance with all applicable data retention laws. Mc Laney and Atrill (Accounting and
Introduction 2005)

Computerized Accounting Systems are important to businesses in various ways. The use of
computers is time-saving for businesses and all financial information for the business is well
organized (Baren, 2010).

Time and Cost Savings : Using a Computerized Accounting Systems saves companies time and
money. The use of a computer makes inputting accounting information simple. Transactions are
entered into the system and the system processes and posts transactions accordingly.
Computerized Accounting Systems reduce staff time preparing accounts and reduce audit
expenses as records are neat, up-to-date and accurate. Better use is made of resources and time;
cash flow should improve through better debt collection and inventory control. More
importantly, the system helps present financial reports on time to aid in the economic decision
making process of external users.

Organization and Accuracy: A Computerized Accounting System enables businesses to stay

organized. When information is entered into the system, it makes finding the information easy.
Employees can look up any financial information whenever it is needed. There is less room for
errors as only one accounting entry is needed for each transaction rather than two (or three) for a
manual system. The accounting records are automatically updated and so account balances (e.g.
customer accounts) will always be up-to-date.

Storage and Speed: Storing information is vital to a business. After information is entered into
the system, the information is stored indefinitely. Companies perform backups on the system
regularly to avoid losing any information. The introduction of Computerized Accounting
Systems provides the ability to see the real-time state of the company’s financial position.

Distribution: Computerized Accounting Systems allow companies to distribute financial

information easily. Financial statements are printed directly from the system and are distributed
24
internally and externally to those needing the information. Reports can be produced which will
help management monitor and control the business, for example the aged debtors analysis will
show which customer accounts are overdue, trial balance, trading and profit and loss account and
balance sheet. In effect, Computerised Accounting Systems enable financial statements to be
prepared and presented to meet the relevance and faithful representation criteria of financial
statements.

Speed and accuracy. With computerized accounting, you reduce the amount of time you have to
spend monitoring and organizing your accounts. The information will be available at your
fingertips, and systemized, so that there are no anomalies, there will be no information missing.
This will help you improve your business efficiency in areas such as customer relations,
production, and employee management. You will have the potential to increase your profits and
improve general business efficiency.

Computerized accounting systems have automatic calculations built in and therefore there is a
slim chance of making mistakes calculating invoices. The system automatically calculates
inclusive and exclusive figures. Mc Laney and Atrill (2005) there is an old proverb that begins
with the statement “to err is human.” Although the sentiment of this statement was not originally
intended as a comment on life in the information technology age, it still applies. Humans do
make errors. An absent decimal point or the addition of one too many zeros can drastically alter
the accuracy of a financial report. Computerized accounting systems, on the other hand, are
designed to minimize the existence of such blunders. Additions, subtractions and other
calculations are performed by the machine. This ensures that only the correct total is listed at the
end of the general ledger. KJ Henderson (1999).

Improvement in operational efficiency. A computerized accounting system eliminates many

cumbersome and time consuming manual processes. In addition to calculations being automated,
many accounting software programs allow various reports, such as year-end and statistical, to be
generated at the touch of a button. A document that once took junior accountant hours to compile
can now be created in a matter of seconds. An additional benefit to automating the accounting
process is the ability to expediently share information. Information regarding business accounts
can be independently entered into an automated system by multiple authorized parties. In

25
addition, accounting documents, such as financial statements, can be emailed from one colleague
to another in just a few moments. KJ Henderson (1999)
Compatibility. The implementation of a computerized accounting system also allows various
businesses to more easily share financial information. For example, if a company with manual
accounting procedures purchases another organization with manual accounting procedures, it
may take weeks or even months to completely integrate the financial data of the two firms. On
the other hand, if both companies utilize compatible computerized accounting systems, all data
can easily be integrated because one program is able to speak to the other. Sangster
(Computerized Accounting 2002)

Storage and Retrieval of information. Sangster (Computerized accounting 2002), a computerized

accounting system can store many years of information. If the audit requires it, the employer can
access information dating from many years back. If, during the audit, the auditor spontaneously
requests an accounting document, the employer can quickly retrieve it from the system instead of
rummaging through storage boxes to locate hard copies. The majority of computerized
accounting systems have features such as order-entry and generation of associated invoices. The
employer can create accounts for their clients, storing their names, addresses, orders and invoices
for as long as necessary. A computerized system also allows the employer to make and print
account statements. Further, many accounting systems have a payroll feature, which enables
complete payroll processing, including the generation and printing of checks and reports.

Reduces fraud and Embezzlements. Computerized accounting software makes it difficult for
employees to steal money from the company. For example, if a payroll employee tries to pay herself
more than the allowed amount, her theft will most likely be discovered because the accounting
system stores all saved transactions. Sangster (Computerized accounting 2002).

Automated Report Generation. Computerized Accounting software has the ability to generate reports
on demand--something that could take a team of humans hours or days. These reports can be
customized to what the company is spending money on, such as VAT, day-to-day operations, salaries
and marketing. In addition, when used properly, this feature can assist the business in its budgeting
needs, telling executives in a quick and easy to use format exactly where their money is going.
Reports empower executives to make informed decisions, and having instant access to them can only
make success more likely. Sangster (Computerized accounting 2002).

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Lower cost of operations. Aramenta Waithe (2008) Accounting can become expensive for
businesses, as the level of work can result in the businesses needing to hire an accounting service
on contract or hire several full-time employees. Accounting software eliminates much of the
manual work, which may allow you to reduce your full-time staff and lower your costs. Indeed,
because so many tasks can be automated, a full-time accountant may not be necessary at all.

According to McBride (2000), computerized packages can quickly generate all types of reports
needed by management for instance budget analysis and variance analysis. Data processing and
analysis are faster and more accurate which meets the managers need for accurate and timely
information for decision making.

Frank wood (1999) consented to the speed with which accounting is done and further added that
a computerized accounting system can retrieve balance sheets, income statement or other
accounting reports at any moment. He consented that computerized accounting system allow
managers to easily identify and solve problems instantly.

Indira (2008) pronounced the improvement in business performance as a result computerization

of the accounting systems as it is a highly integrated application that transforms the business
processes with the performance enhancing features which encompass accounting, inventory
control, reporting and statutory processes. He then says, this helps the company access
information faster and takes quicker decisions as it also enhances communication.

McBride (2000) stated that managers cannot easily satisfy statutory and donor reporting
requirements such as profit and loss account, balance sheet and customized reporting without
using computerized accounting systems. With the system in place, this can be done quickly and
with less effort. Computerized accounting systems ease auditing and have better access to
required information such as cheque numbers, payments, and other transactions which help to
reduce the time needed to provide this type of information and documentation during auditing.

According to Carol (2002), it is easy to do accounting functions using computerized accounting

systems. Posting transactions to the ledger, the principle of double entry can largely be
automated when done through the use of computerized accounting system. Although
computerized accounting is highly beneficial to an entity, it is worth noting that it is dogged with
a couple of pitfalls some of which are shown as below;

27
Meigs (1986) stresses that there is a risk of improper human intervention with the computer
programs and computer files. Employees in the organization may temper with the computer
programs and computer based records for the purpose of deliberately falsifying accounting
information. This may result into distortion of information that would essential be for decision
making. According to Wahab (2003), another threat and limitation of computerized system is the
computer virus. Where a computer virus is a computer code (program) specially designed to
damage or cause irregular behavior in other programs on the computer. The adverse effect is that
it may lead to breakdown of the hardware thus leading to loss of valuable information (for
instance in financial institutions information such as customers accounts, previous financial
report, information pertaining loans advanced among others) already saved on the computer.

2.2.1 Limitations of Computerized accounting.

Despite the numerous benefits of Computerised Accounting Systems that can be listed they are
not without challenges. The impediments to implementing a CAS include: lack of time
(Proudlock et al. 1999), owner-manager’s view that the CAS is costly (Head 2000), perception
that the technology is not suited to the nature of the business (ABS 2000), and lack of IT
expertise (ABS 2000; Burgess 1997).

Installation costs. S. NORA (Computerization of Society 1981) notes that the cost of installing
computers in an organization is very high as it needs huge sum of money. This is a major
hindrance as to why organizations do have computers. Accounting systems costs have decreased
substantially, but they still can be costly, not only to purchase, but to maintain them as well.
Extra costs for training new employees in the system should be considered along with ongoing
customer service. Charges for customizing reports and other processes can pose limitations on
small and medium-sized businesses that cannot afford these services. Other program costs to
consider include new version upgrades and even hardware that may be required as technology
progresses. If businesses can't afford these costs, they will be left behind.

Power Failure. S. NORA (Computerization of Society 1981). When dealing with accounting
programs, you should consider electrical power as a major limitation of the system. Without
electricity, most small-business accounting systems are useless -- no data can be input or reports
generated. Any electrical fluctuation can have a negative impact on accounting data, deleting

28
information and creating confusion. Another consideration that limits the usage of accounting
systems is the network where the program may reside -- if the computer network is not properly
set up, the software cannot be accessed and cannot be utilized. Most organizations are faced with
frequent power failure that slows the rate at which operations are executed in organizations. This
leads to loss of data hence taking more time to be retrieved

Computer Virus: The major stressing challenges in the whole world are the problem of computer
viruses. S. NORA (Computerization of Society 1981), affirm that computer viruses usually infect
systems introduced via external storage devices which have already been infected. This has led to
loss of data most of which is very costly to get back as it will need experts who are invited to
install and design new packages. System security concerns can pose limitations on accounting
software. Besides worrying about viruses and worms, small-business owners also should be
concerned with unauthorized access of computerized accounting data. IDs and passwords are
common minimum security measures businesses can use to protect the accounting software
against intrusion, but they may not be enough. According to Kiplinger magazine, hacking is very
common with small businesses; however, only one in five small firms owns antiviral software
and over half don't use encryption on wireless connections.

Computer Hacking S. NORA (Computerization of Society 1981), goes ahead to refer this as to
when individuals make unauthorized access to computerized systems especially via dial-in-lines
or across computer networks. This leads to loss of data and inconveniences to the individual
affected by the hackers.

Converting from manual to computerized accounting system before converting from manual to
computerized accounting system, planning is of great importance. S. NORA (Computerization of
Society 1981). Hence need to consider the principle of procedure, costs associated with new
system, feasibility and reliability of the new system. S. NORA (Computerization of Society
1981). Recommend 2 ways of changing a manual system to computerized system. Direct or
parallel method, however, the choice of the method to use will depend on the nature, resources,
objectives and purposes of the organization. Richard Back and Rueben T. Hurns 1998 suggested
that large scale; complex organizational change can be conceptualized in movement from present
to future state. All this would affect organizational operations positively hence effectiveness.

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2.3. Manual versus Computerized Accounting
Accounting is an important part of every company. Businesses are required to keep books on
their credits and debits. So which is best for your business idea - people or software? Well,
Weber, M. (2011) emphasizes that every company applies accounting because it is generally
accepted that companies have to reveal certain financial and management information to the
government and public users and of course because accounting is an indispensable tool in
business decision-making process, it has led to the development of information technologies and
many computer products (software in terms of accounting packages) that make accounting as
easy as ABC for those who use them. From this point accounting can be divided into two basic
categories: those which apply manual accounting and those which prefer computerized
accounting systems. This topic therefore targets the main features of manual and computerized
accounting, their benefits and shortcomings, and their comparison.

Whereas computerized accounting has been defined by Alan & Frank (2005) as a total suit of
components that together comprises all inputs, storage, transactions, processing, collecting and
reporting of financial transaction data, manual accounting on the other hand implies that
employees perform the whole accounting cycle manually on a periodic basis: they calculate trial
balances, journalize transactions, prepare financial statement reports and other routines.

Whether manual or computerized, accounting in itself is known to have a cycle that includes the
following steps: journalizing the transactions, posting them to ledger accounts, preparing trial
balance, making adjustment entries, preparing adjusted to end-of-period trial balance, preparing
financial statements and appropriate disclosures, journalizing and posting the closing entries, and
preparing after-closing trial balance at last, Weber M. (2011). From the first look, it is not very
difficult and it is so indeed, but when there are thousands or millions of transactions to be
handled, the situation dramatically changes. Lots of transactions that must be processed in the
accounting cycle make this process routine and even a little mistake or inaccuracy can cause all
the cycle from the very beginning to fail which will therefore require an extra effort to find and
correct the mistake.

Manual accounting uses several paper ledgers and journals where accountants record financial
information. The general ledger includes miscellaneous transactions and the aggregate balance of

30
all subsidiary ledgers and journals. Whereas Manual accounting is very detailed, since
accountants must carefully enter information into physical books, Computerized accounting uses
software programs designed from traditional manual accounting systems and involves the use of
computers, spreadsheets and programs designed to record and report financial information
electronically, (Osmond, 2011).

2.3.1 Benefits of Computerized Accounting over Manual Accounting

Time: Paper works are involved in manual accounting; all the accounting activities are carried
out on paper manually and obviously, it takes much time and resources for the average business
organization and most especially, a financial institution that still uses the manual system.
Computerized accounting saves a lot of time where in, the employee has to record the
transactions and all the other calculations would be carried out by the software either
automatically or by a request. Magdalene M, (2010)

Accuracy: I also agree with Magdalene M, (2010) again, that computerized accounting is not
only speedy but also accurate. With a computer being used to collect data and change it into
meaningful information that is used by management to make timely and effective decisions, the
computer carries out the entire data processing through classifying, sorting, calculating,
summarizing the data and production of reports, as stated by Birungi (2000). This entire process
helps to minimize the risk of miscalculations and other human errors that could have emerged as
a result of manual data processing.

Security: With the manual accounting system, every record is on paper and in case of any
uncertainties such as heavy floods, landslides and fire outbreaks, the useful data may all be lost,
and yet with the computerized accounting system and the introduction of internet and networks
in the information technology world, an easy backup and restoration system as well as the use of
passwords to avoid unauthorized parties from accessing the data, keeps the information secure.

Cost : Some arguments may stress that manual accounting can be handled with cheap work force
and resources and that it is reliable as it is done manually with minutes of observations
Magdalene M, (2010). However, the level of competition in the business world of today is tight
and even growing tighter day by day and if a business with an aim of being successful does not

31
consider the aspect of time especially as far as decision making is concerned, then that business
stands to lose. Computerized accounting in this case may be more costly than manual accounting
in terms of cheap work force but its output actually overweighs its cost.

Level of output : Magdalene M, (2010) also argues that computerized accounting can actually
handle thousands of calculations simultaneously and accurately as compared to manual
accounting where by transactions are handled one at a time and even needs much time to do that
as well as being characterized by human errors and mistakes in calculations which may
eventually affect the final output of information and hinder effective decision making.

2.4 Financial Reporting and its Qualities

According to the Babylon dictionary (1997), financial reporting is the process of preparing and
distributing financial information to users of such information in various forms. Emphasis is
made that the most common format of formal financial reporting are financial statements, which
are actually prepared in accordance with rigorously applied standards defined by professional
accounting bodies developed according to the legal and professional framework of a specific
locale.
A financial statement also known as a financial report is a formal record of the financial activities
of a business, person, or other entity, Babylon dictionary (1997). A financial statement also often
referred to as an “account”; expression of one’s responsibility over a particular activity.

Van (2005) defines financial reporting as the process of presenting financial information or data
about a company’s financial position, operating performance and its flow of funds for an
accounting period. According to Indira (2008), timeliness is also another important characteristic
of quality financial information. This arises as a result of perish ability of accounting
information. To benefit users, financial information must be presented at the right time otherwise
it loses relevance.

According to Frank Wood (1999), financial reporting is all about presenting useful information
to users so that proper decisions can be made. His implication about financial reporting is that
financial information should aid in the evaluation of amounts, timing and uncertainties of cash
flows. Also financial reporting should furnish information about the entity’s economic resources,
claims against those resources, owners’ equity and changes in the resources and claims.

32
Indira (2008), emphasized that financial reports should provide information about financial
performance during a period management discharge it’s stewardship responsibility to owners. It
should likewise be useful to managers and directors themselves in making decisions on behalf of
the owners. He argues that accounting information is very necessary if decisions are to be made
accurately and rationally by the various interested parties or users of financial information. These
are broadly classified into external and internal users. Where internal users include management
and employees while the external users include donors, shareholders, creditors, government,
competitors and general public.

According to Carl’s et al (1999) the quality of financial reports depends on the intended users of
the information and should be evaluated with respect to the needs of the users. Federation of
Accounting Standards Board (FASB) defined quality as a hierarchy of accounting qualities with
relevance and reliability considered as the primary characteristics while representing
faithfulness, verifiability, neutrality, comparability, consistency and understandability considered
as secondary characteristics. Reliability, information is said to be reliable if it is free from
material errors and bias and represents faithfully that is purports to represent emphasized Frank
wood (1999).

Having discussed the history and essence of Computerised Accounting Systems, it is imperative
to assess the importance of financial reporting in every company. The scenario posed by Enron
and other companies like WorldCom, Tyco, Adelphia, Global Crossing, and Xerox, endears both
management and users of accounting information to pay critical attention to the content of the
financial statements (Romney et al 2008).

The Companies Code, 1963 (179) of Ghana mandates management of every company identified
under the code to prepare and present financial statements to members of the company at least
once in every calendar year. The process of periodically providing general-purpose financial
information to people outside an organisation is termed financial reporting (Greuning, 2006).

Financial Reporting can be defined as the process of presenting financial data about a company’s
financial position, the company’s operating performance, and its flow of funds (Rose and
Hudgins, 2008). Issues bothering on financial reporting are quite complex and cumbersome. The
function of financial reporting is to make publicly available information which concerns

33
stewardship (for example, what resources are under control of the organization, and the
consequence of their past use) and management's planning (for example, what are the future
plans for the controlled resources, and how prior mistakes will be avoided) (Beaver 1978).

The end product of financial reporting is a financial report. This financial report generally
consists of:
 Statement of financial position at the end of the period
 Statement of comprehensive income for the period
 Statement of cash flows for the period
 Notes to the accounts (Greuning,2006)
Financial reporting is largely an effort to assess financial performance, that is, how well or how
poorly an entity performed with money entrusted to it, (Sacco, 1998). Financial decisions include
raising and spending money as well as making promises that have financial consequences.
Financial reporting is considered a part of accountability for financial decisions. Exactly, the
quality of financial reporting depends upon how the financial data is handled right from the point
of data collection to the processing stage that leads to the production of meaningful financial
information in terms of reports. As noted by Sacco, (1998) two major models are considered in
this context, manual or computerized accounting. With either system, many types of financial
reports can be generated but a considerable amount of attention is given to the system that
generates financial reports with the stated qualities below:

2.4.1 Characteristics of quality financial reports

Understandable: Naturally the information produced must be understandable. A guideline is to
provide information that people, who are willing to understand it, can understand it:
professionals or nonprofessionals. As a business owner, you have to think of the different
accounting backgrounds of the different types of people who will be reading your reports and
match that accordingly Marquez Come lab. Information can only be useful to end users if they
are able to understand it.

According to Pallai (2007) Understandability as a quality of financial reporting that enables users
to perceive the significance of financial information. He argues that users are assumed to have
reasonable knowledge of business and willingness to study and understand the information.

34
International Accounting Standards Board adds that information should not be excluded on
grounds that it may be difficult for certain users to understand.

Relevant & Material: Relevance is the capacity of information to make a difference in a

decision. It is important to report and disclose information that is relevant for anyone to make a
decision. Accounting information must also deal with things that are significant enough to impact
decisions that are made by those who use the financial reports (Marquez,2011). Since financial
statements are for users to make economic decisions, the information must be relevant to the
decisions that those users have to make. . Whether the information affects the economic
decisions of users (materiality) and the nature of information affect relevance as well. Materiality
is one of the assumptions used in financial reporting that contributes to relevance Derrell V.
(2010)

Reliable: also agree with Frank and Alan (1999) that reliability is regarded as one of the main
qualities. People must be able to depend on the figures and the facts printed on your financial
statements and to make sure that they are true. It must be verifiable. Free from error. E.g. you can
always look at a receipt to verify the amount of an expense. As you already know, when you get
audited, you must verify all transactions that occurred in your business.

Comparable & Consistent: Furthermore, comparability relates to the ability of information to

be compared with those of other similar companies, without comparability the accounts would be
of little use Frank and Alan (1999). General Accepted Accounting Principles (GAAP) allow for
certain choices of different accounting methods for depreciation and inventory management. If a
financial statement from one company that was prepared differently from other companies in the
industry, or even prepared differently from previous statements, it is likely that the users will not
be able to compare the statements among companies and over time.

Comparability adds a degree of transparency to financial statements by allowing comparisons

over time and among entities. Comparability is affected by consistency of presentation and
disclosure of accounting policies—particularly when comparing items among entities that might
use different (but equally valid) methods like straight-line/ reducing balance depreciation or
FIFO/ average cost method. This indicates that comparable financial statements are not
necessarily uniform, but merely allow suitable comparisons. Derrell V. (2010)
35
Objectivity: Information which is free from bias will increase reliance the users place on it
Frank and Alan.(1999) The information should meet all the proper user needs and be neutral in
that the perception of measures should not be biased towards the interest of any one user group.
The accounts should always show a true and fair view of financial statements.

According to Turner (2000), neutrality is the demand that accounting information should not be
selected to benefit one class and neglect to other. Reliable information is verifiable, neutral and
has representative faithfulness. Relevance is also a very important characteristic of quality.
Frankwood indicates that financial information is relevant if it is capable of making a difference
in decisions made by helping users to form predictions about the outcomes of the past, present
and future events either to confirm or correct prior expectations. Comparability is another
characteristic of quality information. Frankwood (1999) also stresses that users must be able to
compare the financial statements of the enterprise over time in order to identify trends in its
financial position and performance.

2.5 Relationship Between Computerized Accounting and Financial Reporting

Computerized accounting on financial reporting is linked to benefits applying computer system
while generating financial reports. Computerized accounting systems have been credited for
their quick processing speed and large storage capacity. Using computerized accounting system
ensures up-to-date account balances are available any time for management to make quick
decisions (Lancouch, 2003).

Quality of financial reports is assured with computerized accounting system as compared to

manual systems. The method of inputting and processing data is sophisticated thus accuracy of
data is improved. This means that financial reports will bear minimum errors. Computerized
system will foster accessibility and faster transformation of information stored in computers,
hence financial reports can easily be accessed through online system without delay and timely
decision making (Kwarijuka, 1998).

The use of computer based systems in manufacturing firms will enable employees from various
function areas and branches to generate timely financial reports which enable managers to
monitor business operations and important finance decisions (Wailes, 1999). A computerized
36
accounting system is a delivery system of accounting information as providing reliable
accounting information to users. So records of expenditure and incomes and assets, liabilities,
revenue expenses must be documented and transferred to general ledger of firm’s financial
details to be analyzed for future financial decisions.

2.6 Conclusion
Computerized accounting is faster and efficient in processing information. As the properties of
information continue to change, the accounting system should become flexible enough to meet
the need of users. Automated generation of accounting document like invoices, cheques and
statement of accounting with the larger reduction in the cost of hardware and software and
availability of user-friendly accounting software package with relative cheap maintenance. In
order to promote quality of financial reporting, there is need of feedback regarding the way in
which user determines quality (Mangiameli et al, 1999). Financial reports need provide feedback
in order to prepare good reports enable constantly updating the system.

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction
This chapter describes the methodology that was employed in conducting the study. This chapter
focuses on the description of the procedures that was employed in the study. Mugenda and
Mugenda, (1999) state that this chapter should specify the research design, the study population
or the area in which the study were conducted, the sampling design, the sample size, data
sources, data collection instruments and the validity and reliability of the data collection
instruments.

37
3.1 Research Design
The study used a descriptive study is concerned with finding out the what, where and how of a
phenomenon. Descriptive survey designs were used in preliminary and exploratory studies to
allow researchers to gather information, summarize, present and interpret for the purpose of
clarification. The choice of the descriptive survey research design is based on the fact that in the
study, the research is interested on the state of affairs already existing in the field and no variable
were manipulated. This study therefore enables to generalize the findings to a larger population.
The main focus of this study was quantitative. However some qualitative approach was used in
order to gain a better understanding and possibly enable a better and more insightful
interpretation of the results from the quantitative study.

3.2 Area of the study

The area of study was Stanbic Bank Uganda Limited, Mbarara branch, Mbarara District -
Mbarara Municipality is a third-order administrative division and is located in Mbarara District,
Western Region, Uganda. Mbarara Town has a number of streets which include Mbarara High
Street (named after one of the town's most prominent secondary schools, Mbaguta Street (named
after a former prime minister of Ankole), Bishop Willis Street (named after Bishop Willis, one of
the first whites to visit Ankole and Mbarara), Garage Street, MakhanSingh Street, Bulemba Road
and Bucuku Street.

3.3 The Population of Study

This population encompassed the accounting staff/tellers, support staff and management of the
case study who actually record and even use the same information generated as a result of
computerized accounting.

3.4 Sample Size and Selection Method

The researcher used convenient sampling to come up with 15 respondents of the financial
institution as broken down below.
Table 3.1 Showing the category and size of respondents used for the study
Category Size
Management Staff 2
Accounting Staff/Tellers 10
Support staff 3
Total 15
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Source: Primary 2014
The purposive technique above was used in selection of respondents not only for its’ time and
money saving but also helps in selecting of typical and relevant cases necessary to equip the
study with the required information. Besides, the simple random sampling methods were used to
select a sample of respondents without any bias from the accessible population. Each party of the
target population in this case has an equal opportunity of independence as far as expression of
their opinions is concerned.

3.5 Sampling and Sampling technique

The samples used in the study were selected using purposive sampling which is a function of
non- probability sampling. Under purposive sampling technique, the researchers purposely
choose who, in their opinion are thought to be relevant to the research topic. In this case, the
judgment of the researcher was more important than obtaining a probability sample. The process
of sampling in this case involved was purposive identification of the respondents.

The sample size was therefore selected from all the different department and the subjects of the
study include more particularly on the management staff, accounting staff / bank tellers and
support staff who were directly dealing with the day to day management of the bank since they
were the ones conversant with the relationship between computerized accounting and financial
reporting in the commercial bank.

3.6 Source of Data

3.6.1 Primary Data
Primary data was obtained through the use of self-administered questionnaire to respondents
following systematic and established academic procedures, as suggested by Nunnally and
Bernstein (1994). Primary data was collected from the respondents that were chosen from
Stanbic Bank Mbarara Branch

3.6.2 Secondary Data

Secondary data was used to support the empirical findings of the study. These other sources of
data (Literature review) major used to back up the arguments and findings in chapter four and
five. The secondary data were obtained from Stanbic Bank journals, text books, brochures,
library and internet information relating to computerized accounting and financial reporting.

39
3.7 Data collection method
This study was based on data collected from two major categories of sources: primary and
secondary. Where as the primary source of data were used in the questionnaire, to collect more
information and clarify on some information, it majorly constituted structured and open-ended
questions focusing on the research objectives and control questions to check correctness and
consistency. The secondary data source involves were mainly the organization financial and
management reports. This record inspection was carried out in relevance to the study objectives.
Besides, the study employ the use of interviews, which involve talking or interacting face to face
with the respondents sampled for the study and finding out issues concerning the research
objectives

3.7.1. Questionnaire.
This was one of the major instruments that were used to collect data. The researcher used both
open and closed questions which was required specific answers. Questions were printed in clear
and simple language possible for the respondents to understand. The respondents were selected
the correct options by ticking the correct answers.

3.7.2. Interview.
Here, questions were determined before hand while others arise during the course of the
conversation. The interviews were done on individual-oriented basis to allow expression of
personal view points. The researcher used face to face interviews because of the following
reasons; provision of first hand information, rich data collection, cost effective, speedy and
ability to clarify the questions, clear doubts and could add new questions where it was necessary.

3.7.3 Key Informant Interviews

Face to face interviews were carried out with the top management and clients to cross check the
response from the questionnaire. These were designed in a way that more specific and truthful
answers were got. These help to capture information, not provided by the questionnaires. The
method used Interview guide to capture the respondents‟ views. This method was preferred
because of its flexibility and ability to provide new ideas on the subject (Kothri, 1990).

40
3.7.4 Documentary Analysis
Secondarily data from materials such as textbooks, newspapers, journals and internet were used
to back up primary information and relate the findings to other approaches already in existence.
The method used document checklists and guides to get views from other writers which were
instrumental especially in comparison analysis and literature review.

3.8 Data collection Procedure

Data collection involved a self-administered questionnaire. The researcher drops the
questionnaires physically at the respondents‟ places of work. The researcher leaves the
questionnaires with the respondents and picks them up later. Each questionnaire was coded and
only the researcher knows which person was responded. The coding technique only was used for
the purpose of matching returned, completed questionnaires with those delivered to the
respondents.

3.9 Ethical Considerations

The researcher was protected by the statutory rights of the participants investigated and avoided
undue intrusion, obtain informed consent and protect their privacy rights. The researcher was
framed research questions objectively so as to widen the scope of the study and maintain
confidence in the research process. The researcher was sensitive of social and cultural differences
and considers conflicting interests. Lastly the researcher endeavored to report all findings
completely, and objectively with full information on methodologies to allow research work to be
assessed by colleagues and to increase public confidence and reliability.

3.10 Data processing and Analysis

Data analysis is the science of examining raw data with the purpose of drawing conclusions
about that information. The collected data were analyzed using quantitative analysis which
majorly involved six major activities namely, data preparation, counting, grouping, and relating,
predicting and statistical testing.

Data preparation involved all forms of manipulations that were necessary for preparing data for
further processing e.g. coding, categorizing answers to open-ended questions, editing and
checking as well as preparation of tables; counting included the mechanical task of registering
the occurrence and frequency of the occurrence of certain answers or research items; grouping
41
and presentation involved ordering of similar items into groups and this was resulted in
distribution of data presented in the form of tables and graphs; relating involved cross-tabulation
and statistical tests to explain the occurrence and strength of relationships; predicting is a process
of extrapolating trends identified in the study into the future and this statistical method helped
the researcher complete this task and finally statistical testing; this refers to the stage where test
of significance, inference, hypotheses and correlation are employed during the process of
analysis.

Also data collected was mostly quantitative, and it was analyzed by descriptive analysis
techniques. The descriptive statistical tools such as SPSS will help the researcher to describe the
data and determine the extent used. Content analysis was also used to analyze qualitative data.
The findings were presented using tables and charts, percentages, means and other central
tendencies. Tables were used to summarize responses for further analysis and facilitate
comparison. For this study, the researcher was interested in establishing the relationship between
computerized accounting and financial reporting of deposit taking Stanbic Bank in Mbarara
Municipality. These were generated quantitative reports through tabulations, percentages, and
measures of central tendency.

3.13 Limitations faced during the study.

Some Stanbic Bank staff denied the researcher information as they failed to believe that the
research was purely academic. As a result, the researcher was able to get information from such
Stanbic Bank.

Poor time management by employees of the Stanbic Bank also hindered the data collection
process. Some employees came late as they had other things to besides working at the Stanbic
Bank office, others did not keep appointments leading to failure to get responses from them in
the end.

Resource constraints in form of human, time and technical but the researcher worked hard for the
success of the research studied.

Inadequate cooperation of respondents in form of refusal and delays in completing

questionnaires. However a number of respondents tried to bring back the questionnaires in time
42
and the researcher tried to be patience enough to the respondents who delayed in completing
questionnaires.

Respondents felt insecure to reveal that they were not empowered but the researcher assured
them that their responses were treated with much confidentiality.

Cost of the research/study: just like any other research, costs are normally unavoidable and these
may include, transport costs, airtime costs, typing, printing and binding costs among others that
may come up unpredicted. However, as far as costs are concerned, the researcher has to acquire
soft loans from friends and relatives so as to meet the costs of the research.

Time required to carry out the research: the time required to carry out the research were not
adequate, given unpredicted and uncertain happenings that may hinder timeliness such as delays
and bad weather which the researcher definitely has to bare with and try as much as possible to
work longer hour in order to compensate for the lost time.

Uncooperative respondents: as usual, not every respondent during research is completely willing
to cooperate positively towards the demands of the researcher, some are even hostile. However,
giving up on the respondent only hinder the acquisition of the necessary information, so the
researcher not get tired as far as wooing the respondents to cooperate is concerned.

CHAPTER FOUR

PRESENTATION, DISCUSSION AND ANALYSIS OF FINDINGS

4.0 Introduction
The following chapter reports on the findings of the study that was carried out to evaluate the
strength of the computerized accounting system effectiveness used by Stanbic Bank , Mbarara
Branch, to find the pros and cons of computerized accounting system effectiveness to financial
institutions, to establish the qualities of financial reports generated by computerized accounting
systems effectiveness and to establish the relationship of computerized accounting system
effectiveness and financial reporting in financial institutions in Uganda

43
 The study was carried out in Stanbic Bank, Mbarara branch as was deemed one of the giant
financial institutions in Uganda sharing a wide coverage and perhaps largely preferred various
organizations and individuals as regards transacting businesses. The chapter also presents the
biographic characteristics of respondents.

In the presentation of findings, tables and figures will be constructed using frequencies and
percentages to describe and analyze the findings to draw meaningful conclusions. Of the 20
questionnaires which were distributed, the researcher received back 15 questionnaires. The research
was analyzed according to the number of questionnaires which were returned.

4.1 The nature of respondents

This includes mainly background information of the respondents. Among the cranial socio-
demographic characteristics considered in the research study included Sex Distribution, Age
differences, sex distribution, Time spend working with Stanbic Bank (U) Limited bank, Position
held / responsibility, educational levels, as well as Department of the respondents. The
biographic data of respondents which is in the research study is presented as below. –

Table 1: Showing the nature of respondents

Nature of Respondents Frequency Valid Percent Cumulative Percent
Sex
Male 09 60.0 60.0
Female 06 40.0 100.0
Total 15 100
Age difference
15-30 06 40.0 40.0
31-40 06 40.0 80.0
41 and above 03 20.0 100.0
Total 15 100
Time Spent Working at the Bank
1 Month – 1 Year 01 06.7 06.7
1- 2 03 20.0 26.7
2–3 05 33.3 60.0
3 and above 15 40.0 100.0
44
 Total 15 100
Position
Sales officer 07 46.7 46.7
Loan officer 03 20.0 66.7
Tellers 01 06.7 73.4
Customer advisors 02 13.3 86.7
Accountant 02 13.3 100.0
Total 15 100
Department
Procurement 02 13.3 13.3
Sales 04 26.7 40.0
Administration 01 06.7 46.7
Information and stores 08 53.3 100.0
Total 15 100.0
Source: Primary Data 2014
From the study findings Table 1 analyses the sex composition of respondents in the study area.
Most of the respondents (60%) were males with females constituting slightly over forty percent
(40%). Socio-cultural expectations of the society reason more males engage in financial and
calculative businesses or institutions than females. These argue that females tend not to prefer
offering science as well as mathematical education they are thus left for men hence men execute
what they have acquired in class by serving or working in such financial institution. To the
researcher, females were fewer than males because they prefer largely offering arts in higher
institutions of and therefore have largely ended as social workers, secretaries to mention but a
few
From the study findings, the study population was mainly composed of people from different age
groups. Respondents aged between 15 – 30 years comprised of forty percent (40%), those aged
between 31 – 40 years comprised of slightly over forty percent (40%) where as those aged forty
years and above comprised only twenty percent (20%).

As noted / indicated above, the variations in age structure were pointed out as a result of various
factors, the major one being the fact that people lying in the age bracket of 15 – 30 are the youth
who now days largely engage in high / advanced institutions of learning a warning them
satisfying qualifications a long side fresh brains thus are largely opted for by such efficiency
yearning financial institutions. This thus explains why those falling between 15 – 30 years and
many compared to the rest.

45
Others in the bracket of 31 – 40 and above were fewer because these qualified earlier thus cannot
easily cope up with the ever increasing modern systems of finance handling especially due to
current usage or utilization of modern information and technology equipment and methods.

From the above table, Respondents were asked about their duration of stay/work in the study
area that is Stanbic Bank. It was hoped that the workers / respondents time of the stay on work
influenced their impact in the area. Those who had stayed longer in the study area were further
believed to have witnessed several changes, trends and patterns of work / services offered by the
institutions to its clients (6.7%) slightly low ten percent had stayed / worked Stanbic Bank for a
period of only 0ne month to one year. Only twenty percent (20%) of the respondents had worked
with Stanbic Bank for a period of 0ne - two years while the rest of the respondents (20%) and
33.3% had worked / stayed with Stanbic Bank for a period of two to three year and three and
above years respectively. Hence those over two years were more knowledgeable than those
below two years.

As indicated from the above table, among the background characteristics of respondents that
were noted by the researcher was the position of responsibility, respondents held in the area of
study. Slightly less than a half of the total number of respondents 46.7% were working as sales
officers, 6.7% worked as tellers/ cashiers, other 13.3% were working as accounts, 20% were also
working as credit/ loans officers, and 13.3% were also working as customer advisors/ front desk
attendants/ assistant administrators.

To the researcher, sales officers participated more than any other officers because they were
easily found less busy compared to the rest of Stanbic Bank employee who hardly got time to
respond to the researchers’ request. However, other respondent’s views were equally important
even when they did not have enough time to respond to the researcher. From the study findings,
Slightly over thirty three point three percent (53.3 %) respondents were found working at the
information and data management equipment, and equally the same number (46.7%) of
respondents were from administration and store, finance and accounting departments
respectively.

46
4.2 Findings on the uses of a computerized accounting system.
Table 2: Responses on whether, the company uses a computerized accounting system for its
operations.
Response Frequency Percent Valid Percent Cumulative Percent
YES 15 100 100 100
NO 0 0 00 100
Total 15 100 100
Source: Primary Data 2014
Table 2 above indicates that all the respondents (100%) are in agreement that the company
actually runs and maintains a computerized accounting system for its operations. This positive
response is of great significance to the study since it enabled deeper research into the topic in
question.
Table 3: Responses showing what major tasks are performed by the computerized
accounting system.
Major Response (Tasks) Frequency (out of 15) Percent

Data summary 9 60
Data analysis 11 73
Entering/Recording of data 12 80
Reporting (financial statements) 13 86
Data security(password protection) 13 86
Source: Primary Data 2014 (N=15) 14
Table 3 above is showing the major tasks stated by the majority of the respondents .It is also
evident by the percentage differences above that the respondents mostly appreciate the ability of
the system to carry out data entry (80%), security (86%) and production of financial statements
or reports also standing at a percentage of 86%.

Table 4: Responses, showing the financial statements (reports) generated by the

computerized accounting system.
Response (reports) Frequencies out of 15 Percentage (%)
Statement of comprehensive income 13 86
Statement of financial position 14 93
Statement of cash flows 14 93
Income statement 15 100
Source: Primary Data 2014 (N=15)
The research also aimed at finding out what type of financial statements are produced by the
computerised accounting system and as we can see in table 4 above, are the various reports of the

47
financial kind that the respondents pointed out during the study. All the financial statements
named above rank highly in percentages of interviewee responses. This reveals that the stated
financial statement (Statement of comprehensive income, Statement of financial position,
Statement of cash flows and the Income statement), are the most commonly generated financial
reports produced by the system at the bank. As seen above, the study findings on the use of a
computerised accounting system and data entry, processing and reporting are paramount. In the
first case, we can reveal that the case study actually employs the use of a computerised
accounting system for its operations as per the findings of the research and the tasks performed
by the system among other found out include those summarized in table 4 above. While the
system performs several tasks in the bank, the end results zeroed to financial reports generated
by the system as shown in table 4 above.

Table 5. Showing whether Stanbic Bank has a computerized accounting system.

Response Frequency Percent Valid Percent Cumulative
Percent
Valid Agree 8 53.3 53.3 53.3
Strongly agree 7 46.7 46.7 100.0
Total 15 100 100
Source: Primary Data 2014.
Findings indicate that 53.3% respondents out of 15 that were interviewed agreed that Stanbic
Bank actually has a computerized accounting system and 46.7% strongly agreed. This implies
that there is actually a computerized accounting system in Stanbic Bank.

Table 6: Showing whether stanbic bank provides training to staff in computerized accounting system
Response Frequency Percent Valid Percent Cumulative
Percent
Valid Agree 11 73.3 73.3 73.7
Strongly agree 4 26.7 26.7 100.0
Total 15 100 100
Source: Primary Data 2014.
Findings indicate that 73.3% respondents out of 15 that were interviewed agreed that Stanbic
Bank provides training to its staff in computerized accounting. 26.7% strongly agreed. This
implies that majority of the employees have attained training in computerized accounting.

48
Table 7: Showing whether computerized accounting system provides timely information for decision
making.
Response Frequency Percent Valid Percent Cumulative
Percent
Valid Agree 9 60 60 60
Disagree 1 6.7 6.7 66.7
Not sure 2 13.3 13.3 80
Strongly Agree 3 20 20 100.0
Total 15 100 100
Source: Primary Data.2014
Findings in table 7 reveal that 60% of the respondents agreed, 6.7% disagreed, 13.3% were not
sure, while 20% strongly disagreed that the computerized accounting system provides timely
information for decision making in Stanbic Bank. The largest number of respondents selected at
Stanbic Bank agreed that there is timely information and the implication is that timely decisions
are made as a result.

Table 8: Showing whether computerized accounting has enhanced the quality of financial
reports in Stanbic Bank
Response Frequency Percent Valid Percent Cumulative
Percent
Valid Agree 9 60 60 60
Not sure 2 13.7 13.7 73.7
Strongly agree 4 26.7 26.7 100.0
Total 15 100 100
Source: Primary Data 2014.
Table 8 reveals that 60% of the respondents agreed, 13.7% were not sure, while 26.7% strongly
agreed with the fact that the computerized accounting system has enhanced the quality of reports
in Stanbic Bank. It can also be noted from the table above that the largest number of respondents
selected at Stanbic Bank agreed that the quality of financial reports has actually been improved
with the introduction of a computerized accounting system.

Table 9: Showing whether Stanbic Bank has qualified staff in dealing with computerized accounting
system.
Response Frequency Percent Valid Percent Cumulative
Percent
Valid Agree 10 66.7 66.7 66.7
Disagree 01 6.6 6.6 73.3
Strongly Agree 04 26.7 26.7 100.0
Total 15 100
49
Source: Primary Data 2014.
Table 9 reveals that 66.7% of the respondents agreed, 6.6% disagreed, while 26.7% strongly
agreed that Stanbic Bank has qualified staff that can manipulate the computerized accounting
system operations. The impression reflected is that most of the staff at Stanbic Bank is computer
literate.

Table 10: Showing whether the computerized accounting system maintains error free records.
Response Frequency Percent Valid Percent Cumulative
Percent
Valid Agree 5 33.3 33.3 33.3
Disagree 1 6.7 6.7 40
Not sure 4 26.7 26.7 66.7
Strongly agree 5 33.3 33.3 100.0
Total 15 100 100
Source: Primary Data 2014.
Findings as per table 10 reveals that 33.3% of the respondents agreed that the computerized
accounting system maintains records free from error, 6.7% were in disagreement, 26.7% were
not sure while 33.3% of the respondents strongly agreed. According to the ratios of the
respondents, one can conclude that the Computerized accounting system being used at Stanbic
Bank is accounting Stanbic Bank and perfect.

Table 11: Showing whether computerized accounting has eased the transaction processing in Stanbic Bank.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 10 66.7 66.7 66.7
Strongly agree 05 33.3 33.3 100.0
Total 15 100 100
Source: Primary Data 2014.
Findings from the above table11 revealed that 66.7% agreed, 33.3% strongly agreed that the
computerized accounting system has facilitated transaction processing in Stanbic Bank. None of
the respondents that were interviewed indicated was not sure, disagreed or strongly disagreed.
This implies that high levels of efficiency and effectiveness are achieved with the accounting
system.
Table 12: Showing whether the staffs that work in the current system have sufficient experience that keep
pace with a computerized accounting system.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 7 46.7 46.7 46.7
Disagree 1 6.7 6.7 53.4
Not sure 5 33.3 33.4 86.7
50
Strongly agree 2 13.3 13.3 100
Total 15 100 100
Source: Primary Data, 2014
Table 12 reveals that 46.7% of the respondents agreed, 6.7% were in disagreement, 33.4% were
not sure while 13.3% strongly agreed with the fact that the staff have sufficient experience in
using the computerized accounting system. This implies that computer input errors are not so
common in the system since most of the workers are experienced with the system.

Table 13: Showing whether the expected benefits obtained from applying a computerized accounting system
are greater than the cost of obtaining it.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 9 60 60 60
Disagree 1 6.7 6.7 66.7
Not sure 2 13.3 13.3 80
Strongly agree 3 20.0 20.0 100.0
Total 15 100 100
Source: Primary Data 2014.
Findings from table 13 revealed that 60% of the respondents agreed, 6.7% disagreed, and 13.3%
were not sure, while 20% strongly agreed that implementing a computerized accounting system
is very beneficial compared to the costs involved in obtaining the system.

Table 14: Showing whether Administration can access daily reports on activities in a computerized
accounting system.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 8 53.3 53.3 53.3
Disagree 1 6.7 6.7 60
Not sure 2 13.3 13.3 73.3
Strongly agree 4 26.7 26.7 100.0
Total 15 100 100
Source: Primary Data 2014.
Table 14 revealed that 53.3% of the respondents agreed to the fact that Stanbic Bank
administration can access on a daily basis reports on activities using the computerized
accounting system, 6.7% responded contrary, 13.3% were not sure while those who strongly
agreed were 26.7%. Because the biggest percentage agreed, this implies that report generation
and production concerns in stanbic bank were solved with the introduction of the computerized
accounting system.

51
Table 15: Showing whether stanbic bank can measure the performance of its staff in the light of a
computerized accounting system.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 6 60 40 40
Disagree 1 6.7 6.7 46.7
Not sure 3 20 20 66.7
Strongly agree 2 13.3 13.3 80
Strongly disagree 2 13.3 13.3 93.3
Disagree 1 6.7 6.7 100
Total 15 100 100
Source: Primary Data.2014
Table 15 can reveal that of the 15 respondents that were interviewed, 40% agreed that stanbic
bank can measure evaluate staff performance using the computerized accounting system. Only
6.7% disagreed, 20% were not sure about it where as those who strongly disagreed were
13.3%.Looking at the outcome, the biggest percent contend that staff performance appraisal can
be done in light with the computerized accounting system and this may be used to improve on
the efficiency of employees.
Table 16: Showing whether the computerized accounting system provides enough information for internal
and external control.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 7 46.7 46.7 46.7
Disagree 1 6.7 6.7 53.4
Not sure 2 13.3 13.3 66.7
Strongly agree 3 20 20 86.7
Strongly disagree 2 13.3 13.3 100.0
Total 15 100 100
Source: Primary Data 2014
Table 16 can reveal that of the 15respondents that were interviewed, 46.7% agreed that Stanbic
Bank can measure evaluate staff performance using the computerized accounting system. Only
6.7% disagreed, 13.3% were not sure about it where as those who strongly disagreed was 13.3%.
Looking at the outcome, the biggest percent contend that staff performance appraisal can be done
in light with the computerized accounting system and this may be used to improve on the
efficiency of employees.

Table 17: Showing whether the computerized accounting system is more efficient and flexible than the
manual system.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 8 53.3 53.3 53.3
Strongly agree 5 33.4 33.4 86.7
Strongly disagree 2 13.3 13.3 100.0
52
Total 15 100 100
Source: Primary Data 2014
Table 17 can reveal that of the 15 respondents that were interviewed, 53.3% agreed that the
computerized accounting system is more efficient and flexible than the manual system. Only
13.3% of those interviewed strongly disagreed while 33.4% strongly agreed. This result indicates
that the computerized accounting system has enhanced efficiency in work flows and is also
flexible to the users.

Table 18: Showing whether the computerized accounting system provides easy storage, reference and
access to information.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 7 46.7 46.7 46.7
Not sure 2 13.3 13.3 60
Strongly agree 6 40 40 100.0
Total 15 100 100
Source: Primary Data 2014.
Table 18 revealed that 46% of the respondents agreed, 13.3% were not sure while 40% of the
respondents strongly agreed to the fact that the computerized accounting system provides easy
storage, reference and access to information. This implies that costs associated with manual
storage have been minimized in stanbic bank with the introduction of the computerized
accounting system.

Table 19: Showing whether computerized accounting system has simplified most of the accounting
requirements of Stanbic Bank.
Response Frequency Percent Valid Percent Cumulative Percent
Valid Agree 7 46.7 46.7 46.7
Disagree 1 6.7 6.7 53.4
Not sure 2 13.3 13.3 66.7
Strongly agree 5 33.3 33.3 100.0
Total 15 100 100
Source: Primary Data 2014
According to the findings in table 19, stanbic bank by introducing the computerized accounting
system has simplified most of its accounting requirements. 46.7% of the respondents agreed,

53
6.7% disagreed, 13.3% were not sure, and 33.3% strongly agreed. This implies that there is
proper accountability for the activities of Stanbic Bank.

4.3 Findings on the pros and cons of a Computerized Accounting System

Table 20: Responses, on the pros of a computerised accounting system.
Response (pros) Frequencies (out of 15) Percentage (%)
Risk management 12 80
User friendly 14 93
Easy communication (funds transfer) 14 93
Easy balancing of daily transactions 14 93
Effective auditing 14 93
Speed 15 100
Time saving 15 100
Source: Primary Data 2014
Table 20 above shows the advantages of a computerised accountings system as per the study
carried out. However, among the several advantages pointed out, those shown above are the most
prominent as reflected by their high percentage responses. It is therefore clear that the system
actually performs its operations very well as far as auditing, balancing, communication, user
friendliness, speed and the time saving factor as per the high percentage of response on these
factors shown in the table thus guaranteeing effectiveness and efficiency of business operations.

Table 21: Responses, on what the cons of a computerized accounting system are.
Response (cons) Frequencies Percentage (%)
Old computers hinder speed 8 53
Computer virus threats and data loss 9 60
Long training period 10 66
Eye strains 12 80
Chances of system failure 12 80
Source: Primary Data 2014 (N=15)
Earlier on, the study was able to find out a number of appreciations of the system; however, the
respondents were also keen on stating some disadvantages of the system as shown in table 21. It
is also important to note that there were not really many disadvantages revealed by the research
as shown on the table above. This does not only show that the system is of higher advantage to
the bank but it is also notable that most of the system cons regardless of their response-
percentage variances, are not of a financial nature and actually contribute less to disrupt the
effectiveness and efficiency of the financial operations of the business.

54
Table 22: Responses on preferences between manual computerised accounting systems.
Preferences Frequencies Percentage (%)
Manual Accounting 0 0
Computerised Accounting 15 100
Total 15 100
Source: Primary Data 2014 (N=15)
From the findings, it is clear that all the respondents interviewed, prefer computerized
accounting to manual accounting. This is seen in the percentage differences shown in table 4.6
above, with computerized accounting standing at 100% and manual accounting at 0% of
preference by the respondents. This shows that the use of a computerized accounting system is
much more effective and efficient as compare to the manual accounting option, as far as business
operation, running, management and reporting is concerned. Much as the respondents stated their
independent preferences in table 20 above, the researcher went forward to find out the reasons
for the preference chosen above. Eventually, computerized accounting became the most
outstanding option and the reasons for its preference as per response, are shown in table 23
below.

Table 23: Responses on reasons for preference of the option chosen in table 20 above.
Less paper work 8 53
Simplifies work 9 60
Easy tracking of transactions 11 73
Time saving and speed 14 93
Source: Primary Data 2014 (N=15)
Responses on table 23 above show that computerised accounting is much preferred instead of
manual accounting because of the latter’s aspects of less paper work, the ability to easily track
transactions, simplifying of work and the time saving factor, which are all key to today’s
business operations

4.4 Finding on the qualities of Financial Reports generated by a Computerized Accounting

System
In this section, the researcher aimed at finding out from the respondents, the qualities of financial
reports, how often the respondents access the financial reports and whether transactions that lead
to the production of these reports pass through authorization, as shown in the findings below.
Table 24: Showing findings on what the qualities of financial reports generated by a computerized
accounting system are.
Response (qualities) Frequencies Percentage (%)
55
Comparable 11 73
Understandable 12 80
Consistent 14 93
Reliable 14 93
Material 14 93
Source: Primary Data 2014 (N=15)

Table 23 above, shows the qualities or characteristics of a computerized accounting system that
the researcher was able to find out from the respondents. The findings above are majorly solid to
the aspects of these financial reports being consistent, reliable and material as indicated by their
high response percentages of 93% above. This shows that the system is not only accurate as far
as calculations of figure that appear in the reports are concerned but is also produces trustworthy
results and can not be manipulated when it comes to reporting. It is also important to note that
the aspects of materiality, consistency and reliability as pointed out above, among other qualities
of reports generated through computerized accounting is concerned, are the major weaknesses of
a manual accounting system and it is the reason as to why financial reports generated in a
computerized manner are much more preferred as compared to those generated the manual way,
which is actually an outdated system of operation.

Table 25: Chart 1: Showing findings on how often the respondents’ access financial reports.

Source: Primary Data 2014

56
 In order to find out whether the respondents have access to financial reports, the researcher
deemed it necessary to find out how often they get access to these reports. As a result, the
findings shown on table 25 above indicate that actually 93% of the respondents have frequent
access to the reports. This also indicates that the respondents’ opinions as far as financial reports
are concerned are articulate.

Table 26: Showing findings on whether transactions pass unauthorized and why.
Response Frequencies Percentage (%)
YES 0 0
SOME 15 100
NO 0 0
Total 15 100
Source: Primary Data 2014 (N=15)
All Banks have got different and various modes of operation as far as supervision and chain of
command are concerned. It is right from the beginning point of a single transaction that a
company will either make a gain or a loss that eventually has to appear in the periodic financial
statements. In this case, every company treats their chain of transaction differently and with this
factor in question, the researcher deemed it necessary to find out the authority of transactions in
the case study where respondents were meant give their independent opinions. However, from
the findings, it is clear that some transactions may pass by authorization and others pass
unauthorized. The reasons given for this option all zeroed to one conclusion that transaction
differ in nature especially in terms of the amount of monies the transaction requires. As far as the
case study is concerned, any transaction beyond the amount of Uganda Shillings Twenty Five
million (25,000,000) has to be authorized by the bulk tellers in charge whereas transaction below
that amount of money can be carried out between the teller and the client without any
authorization unless the client or customer is actually borrowing a loan from the bank. This
indicates that the company has put in place risk management strategies so as to reduce on the
level of risks associated with the business operations which may lead to losses.

57
4.5 The relationship of computerized accounting systems effectiveness on financial
reporting

4.5.1 Computerized accounting system effectiveness and financial reporting

When the researcher asked whether computerized accounting has relationship on financial
reporting of the firm, the following responses were obtained:
Table 27: Responses on the relationship of computerized accounting on financial reporting
Responses No. of respondents Percentage (%)
Yes 10 66.7
Not sure 2 6.7
No 3 20
Total 15 100
Source: Primary Data 2014
The above table shows that 66.7% of the respondents responded Yes while 6.7% said No and
only 20% were not sure therefore it implies that the relationship of computerized accounting
system effectiveness on financial reporting in the firm.

4.5.2 The relationship between computerized accounting systems effectiveness and financial
reporting.
To establish the relationship of computerized accounting system effectiveness on financial
reporting in manufacturing firms under this objective the researcher used Person correlation
coefficient to establish the relationship between the variables. (Computerized accounting system
effectiveness and financial reporting)

Ho: computerized accounting systems effectiveness has an effect on financial reporting

Ha: computerized accounting systems effectiveness has no effect on financial reporting
Table 10: Shows correlations between computerized accounting effectiveness and financial
reporting in Stanbic Bank.
Correlations
Computerized accounting Financial reporting
Computerized Pearson 1.00 .861**
accounting correlation
Sig (2-tailed) . .000
N 15 15
Financial Reporting Pearson .861 1.00
correlation
Sig (2-tailed) .000 .
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 N 15 15

**.Correlation is significant at the 0.01 level (2-detailed)

From the table above, findings shows a strong significant positive relationship between the
variables (r=0.861**, p>0.01) which presupposes that if management of Stanbic Bank ensures
proper computerized accounting, the quality of financial reporting will surely be increased by
86.1%.Therefore 13.9% is the gap that needs to be closed by Stanbic Bank and this is majorly
due to short falls of the computerized accounting system. This has been linked to the benefits of
applying computer systems while generating financial reports and with computerized accounting
system data balances are available anytime to aid management make decisions (Lancouch 2003).
Therefore there exists a positive correlation between timeliness and accuracy meaning that the
responses on accuracy and timeliness are consistent to with each other.

CHAPTER FIVE

DISCUSION, RECOMMENDATIONS AND CONCLUSION.

5.0 Introduction
This chapter presents a summary of major findings on computerized accounting and corporate
fraud and the relationship between them, gives conclusion, recommendations based on the
findings and areas for further research.

5.1 Discussion of major findings from the Study

5.2.1. To determine the use of a computerized accounting system.

The study showed that the company (case study) actually makes use of a computerized
accounting system. This is evidenced by the results given by the respondents in agreement with
the use of the system in the company. Where the uses of a computerized accounting system are;
the system’s ability to perform data entry, data processing, data security and data reproduction or
reporting such as the generation of financial statements/reports. All these functions of the system
have enabled the bank run its operations smoothly in a much more effective and efficient
manner.

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Findings revealed that there is a computerized accounting system in Stanbic Bank. According to
results, 41.5% of the 14 respondents that were interviewed strongly agreed that there is actually a
computerized accounting system 58.5% agreed. Findings also revealed that the computerized
accounting system has enhanced the quality of financial reports and helps to maintain error free
records while providing easy timely information for decision making, easy transaction
processing as well as easy storage, reference and access to information. The study also revealed
that over the time, staff of Stanbic Bank has since gain sufficient experience in dealing with the
computerized accounting system as daily activity reports can automatically generated on a daily
basis. This according to the findings has improved operational efficiency and effectiveness
amongst the staff. It was however, established from the respondents that management sometimes
overrides the controls in place to generate reports that portray optimistic corporation financial
positions. This finding was arrived at with 61% of the 15 respondents that were interviewed
agreed with the fact that management is found of practicing such an illegal maneuver. This
revelation shows a dangerous position on the state of affairs of Stanbic Bank as quality and
accuracy of financial reports generated become highly doubtable.

5.2.2 To finds out the pros and cons of computerized accounting system to financial
institutions. According to the findings of the study, a computerized accounting system is of a
great importance to the running of the company but is also associated with its own weaknesses
that sometimes hinder efficiency in the company’s business environment. The most prominent
values of the system being: ability to carry out automatic financial auditing and transaction
balancing, easy communication, user friendliness, speed and the time saving factor. With all
these values at hand, it is clear that the system actually performs its operations very well as far as
guaranteeing effectiveness and efficiency of business operations is concerned.

The irregularities of the system however, count in as well. These majorly include risks of system
failure and eye strains among others. Most of these weaknesses of the system can actually be
combated easily in order to reduce on the business risks that may come up as a result. For
example, system failure can be solved through consistent upgrading of the system and the aspect
of eye strains can be controlled by avoiding long working hour on computers and operation
through working shifts. Otherwise, it is notable from the findings that the system is actually more
of an asset than a liability to the company’s business operations and it would therefore be

60
necessary for other financial institutions that have not yet implemented this system, to adopt the
idea of establishing it so as to improve on operations in terms of effectiveness and efficiency.

5.2.3 To establish the qualities of financial reports generated by a computerized accounting

system.
From the findings, financial reports generated through computerized accounting are mainly
consistent, reliable and material among other qualities. These most prominent qualities of
financial reports generated through computerized accounting make the system much more
unique to the manual accounting system especially where accuracy in financial calculations and
reliability in reporting count. It is one of the strongholds as to why 100% of the respondents
prefer a computerized accounting system to the manual accounting system. With this in mind, it
is worth to recommend a computerized accounting system for business operations especially in
of the financial nature as compared to the outdated manual accounting system.

5.3 Summary of Major Findings.

5.3.1 To determine the use of a computerized accounting system.

The results from the study confirm that computerized accounting performs several unique tasks
in a company which are satisfactory. This is indicated by the tasks noted down by respondents in
the questionnaire on this variable.
Quick Financial Reports: The researcher found out that through computerized accounting
system, financial reports can be generated quickly. This side with McBride (2000) view that
computerized accounting system can generate different types of reports needed by management
for instance profit and loss reports, and VAT reports among others. It was observed that the
quickness in generation of the reports is due to the fact that through computerized accounting,
data processing and analysis are faster and more accurate hence managers can instantly access
different information which leads to easy and quick decision making.

Improvement in Business Performance: As pronounced by Indira (2008) that computerized

system is a highly integrated application that transforms the business processes with its

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performance enhancing features. Thus accounting functions, inventory control and statutory
reporting can be easily done resulting into faster access to business information.

Accuracy and Efficiency: Due to expansions, business transactions increase and such
transactions can only be recorded and maintained accurately. The study revealed that the firm can
handle large volumes of accounting data with ease which was the same view pointed by McBride
(2000). Computerized accounting can handle data many times greater than humans hence cost
effective.

Simplified Posting of Transactions: There is no need to have huge paper documentations as in

manual systems. The accountant emphasized the advantage that accounting functions such as
record keeping, double entry principle are simplified with computerized systems. Cook (2002)
also echoed that accounting functions such as posting transactions are simplified. However there
should be accuracy in entering data otherwise human errors in inputting data results into
inaccurate financial reports.

Minimized errors: The researcher observed that with computerized accounting systems,
arithmetic errors are remarkably reduced this is because computerized accounting performs the
computations automatically. However the researcher also established that computerized
accounting does not have intelligence to eliminate or correct errors made by humans during data
entry but can only detect errors.

Easy Auditing: The researcher was informed that when external auditors come, there work is
simplified because all sets of transactions are easily availed to them hence saving time and costs.

5.3.2 To find out the pros and cons of computerized accounting to financial institutions
The findings revealed that computerized accounting is not only advantageous but is also
associated with some weaknesses. However, the study results indicate that advantages of a
computerized accounting are much more paramount than its disadvantages. This reflects a
positive response in the adoption of the use of computerized accounting.

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5.3.3 To establish the qualities of financial reports generated through computerized
accounting. The study findings also identified a number of qualities or characteristics of reports
generated through computerized accounting. It is evident that most of these qualities are unique
to those of the reports generated through manual accounting, thus making the latter system much
preferable.

5.4 CONCLUSION

5.4.1 To determine the use of a computerized accounting system.

From the findings, response is high that the company (case study) runs its financial operations,
right from the beginning point of data entry, data processing and security to the end point of data
reporting of a financial nature in a computerized manner. It is therefore fair to conclude that
Stanbic Bank Uganda Limited actually make use of a computerized accounting system.

5.4.2 To find out the pros and cons of computerized accounting to financial institutions
The results revealed that much as a computerized accounting system has got satisfactory
advantages, it also comes with its disadvantages. However, the study findings show that the
advantages of computerized accounting are more paramount as compared to its disadvantages
even as far as financial reporting is concerned. This therefore zeroes to the computerised
accounting as more of an asset than a liability to business operations and reporting.

5.4.3 To establish the qualities financial reports generated by a computerized accounting

system.
The study also established a number of qualities of financial reports generated through
computerised accounting. From these findings however, it is evident that reports produced
through manual accounting have also got their own strengths characteristically but all the same,
financial reports generated through computerised accounting have much more paramount and
unique qualities that still leave computerised accounting as a better option to financial reporting.

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5.5 RECOMMENDATION

To determine the uses of a computerized accounting system . I strongly recommend that

financial institutions should continuously adopt a culture of utilizing computerized
accounting systems that provide easy preparation of financial reports. As seen from the
earlier chapter, computerized accounting systems perform enormous tasks which if
performed correctly provide the company with accurate, efficient and timely reports.

To find out the pros and cons of computerized accounting to financial institutions: The
computerized accounting system has got its own strengths and weaknesses while in operation.
However, the study findings show that the system is actually more of an asset than a liability to
the company’s business operations and it would therefore be necessary to recommend that other
financial institutions that have not yet implemented this system, get to adopt the idea of
establishing it so as to improve on operations in terms of effectiveness and efficiency.

To establish the qualities of financial reports generated by a computerized accounting

system. In the business world of a financial nature, daily financial operations have reported
several weaknesses such as errors and intentional figure manipulations being common to
financial reports generated through the manual accounting system. However, the introduction of
a computerized accounting system as far as the study was concerned, brought with it qualities of
financial reports that are very unique to those reproduced manually. This gives a strong stand for
a company that is in need of smooth operations and reliable reporting, the computerized
accounting system is recommended.

From the findings and summary, the researcher recommends that first and fore most, the
company needs to acquire a computerized accounting system that suits the organizational needs.
Enough resources need to be saved for a tailor made software and system analyst need to be
consulted in this important issue. There should also be routine system maintenance programs put
in place so that the system can get rid of shortfall such as viruses, fraud among others that may
affect the system operations. This should be done so that the system can operate to the
expectation of management and other users.

64
On the management point of view, it is important that staff for handling transactions is trained so
as to improve on the accuracy and speed in posting. With increased improvements and versions
of accounting packages, staff needs constant and continuous training by the authorized dealers of
the packages so that they remain well acquainted with the knowledge and experience of the
package.

In addition to the training, it is important to constantly appraise the staff to check which staff is
failing the system as regards reporting unbiased financial information. The company needs more
internal audit reviews to appraise and check the strength of the instituted controls within the
system. The computerized accounting system is prone to fraud in cases where physical cash is
involved. Without internal audit reviews, there may arise cases of teaming and lading fraud that
may pass unnoticed. It is therefore important external auditors come in once in a while to do
audit.

There is need to increase the security levels in the internal control system. Management needs to
ensure that requisitions are authorized; cheque payment, vouchers and other source documents
are approved. On recording, it is important to have a clerk to enter the data which is then updated
yet by another person preferably one with more experience and expertise. Management can also
consider the option of using a networked system linking all the system in the finance and
accounting department. This is because the current system uses standalone personal computers.
In this way, errors and fraud possibilities are minimized thus improving on the quality of
financial reports.

5.6 Areas of further study

There is need for more to be undertaken to establish the role of management in promoting the
quality of financial reporting. There is need to explore whether computerized accounting can be
run alongside the manual system. Therefore there is need to investigate if the two systems can be
used concurrently.

More research on business process re-engineering and how essential can be used in computerized
accounting to achieve better goals in firms.

65
There is need for more research on how accounting records can be maintained in providing in
depth exposure to accounts and quality of financial reports

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APPENDIX 1 (RESEARCH QUESTIONNAIRE)

BISHOP STUART UNIVERSITY MBARARA
QUESTIONAIRE ON COMPUTERISED ACCOUNTING AND FINANCIAL
REPORTING
Dear respondent,
I am a final year student in Bishop Stuart University conducting a purely academic study as a
partial requirement that leads to the award of the degree of Bachelor of Business Administration .
The research is on computerized accounting and financial reporting. The answers provided will
be treated with utmost confidentiality and only for academic purposes. I therefore kindly request
you to respond appropriately to the following questions.
Thank you.
SENGOBA DEUSIDEDIT

SECTION A: Background of the respondent

1. Sex
a. Male

70
b. Female
2. Age of respondent
a 15-30
b 31-40
c 41 and above
3. Time spent working with Stanbic Bank (U) Limited bank
a) 1 year1 Month – 1 Year

b) 1 - 2

c) 2– 3

d) 4 and above

4. Position held / responsibility…………………………………………………………

5. Department
a. Procurement b. Information and stores
c) Administration d) Sales

SECTION ONE: THE USE OF A COMPUTERIZED ACCOUNTING SYSTEM

1. Does your organisation/company employ the use of a computerised accounting system?
(a)Yes
(b) No
2. What are the major tasks performed by the system?
……………………………………………………………………………………………… ........
………………………………………………………………………………………………………
……………………………………………………………………………………............................
............................................................................................................................................................
3. List down the names of financial statements prepared by your organisation/company through
computerized
accounting: ........................................................................................................................................
............................................................................................................................................................
....................
Apply a tick where applicable using the following key.
SA – Strongly Agree, A – Agree , NS – Not Sure, D – Disagree SD – Strongly disagree
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 SA A U DA SD

Stanbic Bank has a computerized accounting system.

Stanbic Bank provides training to staff in computerized accounting

system.

Computerized accounting system provides timely information for

decision making

Computerized accounting has enhanced the quality of financial reports

in Stanbic Bank .

Stanbic Bank has qualified staff in dealing with computerized

accounting system.

The computerized accounting system maintains error free records.

Computerized accounting has eased the transaction processing in

Stanbic Bank

The staff that work in the current system have sufficient experience that
keep pace with a computerized accounting system.
The expected benefits obtained from applying a computerized
accounting system is greater than the cost of obtaining it.
Administration can access daily reports on activities in a computerized
accounting system.
Stanbic Bank can measure the performance of its staff in the light of a
computerized accounting system.
The computerized accounting system provides enough information for
internal and external control.
The computerized accounting system is more efficient and flexible than
the manual system.
The computerized accounting system provides easy storage, reference
and access to information.
Computerized accounting system has simplified most of the accounting
requirements of Stanbic Bank

SECTION TWO: THE PROS AND CONS OF COMPUTERIZED ACCOUNTING AS FAR

AS FINANCIAL REPORTING IS CONCERNED.
1. What are the advantages of computerized accounting systems?
a) ................................................................................................................................................
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b) ................................................................................................................................................
c) ................................................................................................................................................
d)........................................................................................................................................................
2. What are the disadvantages of computerized accounting systems?
a) ..........................................................................................................................................
b) ..........................................................................................................................................
c) ..........................................................................................................................................
d) ..........................................................................................................................................
e) ..........................................................................................................................................
3. What would you prefer; (please tick in one box of your preference below)
Computerized accounting
Manual accounting
3.1 Please give reasons for your preference ticked above:
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
SECTION THREE: THE QUALITY OF FINANCIAL REPORTS GENERATED BY 30
COMPUTERIZED ACCOUNTING SYSTEMS.
1. What are the qualities or characteristics of financial reports generated by the computerized
accounting systems in your organisation?
............................................................................................................................................................
............................................................................................................................................................
............................................................................................................................................................
............................................................................................................................................................
2. How often do you get access to the financial reports?
Once a year Frequently Never

3. Do all transactions pass unauthorized? (Please tick in one box of your preference below)
Yes Some No
Please give reasons for your choice of answer in Qn.

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3
above. ................................................................................................................................................
............
………................................................................................................................................................
.………...............................................................................................................................................
.………...............................................................................................................................................
.………...............................................................................................................................................

SECTION FOUR) The relationship of computerized accounting systems and financial

reporting.
Do you think computerized accounting has an impact on financial reporting?
Yes Not sure No
In this section, the respondent is required to tick any one option for each statement below:
Apply a tick where applicable using the following key.
SA – Strongly Agree, A – Agree , NS – Not Sure, D – Disagree SD – Strongly disagree
Statements SA A U DA SD

Financial reports are timely generated for decision making purposes by

the users.
The financial reports can be prepared at regular intervals with much
ease as a result of computerization of the accounting systems.
Arithmetic errors in the financial reports have greatly reduced due to
computerized accounting systems.
Keeping of records and maintenance of accounting data have become
easy and simple to perform.
The stakeholders can greatly rely on the reports generated because of
accuracy and quality of the financial reports.
There is a guaranteed quick speed of processing financial statements.

Others (please specify):………………………………………………………………………

…………………………………………………………………………………………………….
…………………………………………………………………………………………………….
Thanks for your cooperation.
God bless you.

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