Accounting Information System and Its Impact on Administrative decisions

(In The Case of Awash International Bank of Ethiopia Assosa Branch)

College of Business and Economics

Department of Accounting and Finance

A Research Paper Submitted To the

Department Of Accounting and Finance for the Partial Fulfillment of Bachelor of
Arts Degree in Accounting and Finance

By: Awel Bamud Id No….Ber/1938/08

Abeba Molla Id No…Ber/1886/08

Advisor: Hayelom Abrha (Msc)

June, 2018
Assosa, Ethiopia

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Acknowledgment

First and for most, we would like to thanks the Almighty “GOD” who guide our in every
direction.
Secondly, we would like to reward my deepest gratitude to my advisor Hayelom Abrha
(Msc) for his patient guidance, encouragement and excellent advice throughout this
study. We are very fortunate to be under his supervision, as he embraced every
responsibility of a Principal supervisor to guide our research.

Thirdly, our great appreciation and enormous thanks go to our parents strived
our success in all their life.

Finally, we are thankful to our friends for all their help, support and valuable discussions
up on doing this study. We would like to acknowledge staff members in Awash
International Bank of Ethiopia, Manager.

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Abstract
The research is conducted on Accounting Information System and its impact on
administrative decision in Awash International Bank of Ethiopia Assosa branch. The
need for information is basic for concrete and explicit management decision to ensure the
success and survival of an organization and since the aim of any business organization is
“profitability” Accounting information is indispensable to achieving this goal. In
carrying out the work, various types of data collection methods were adopted, such as
distribution of questionnaires, interviews. These methods were adopted for gathering the
primary data .The paper used primary source of data in order to gather the required
information. Primary data is collected through interview and questionnaire distribution
to employees. These collected data is processed, analyzed and interpreted by using tables
and percentage.The major problems there is knowledge gap on the use of Accounting
information systems between different levels of management. The study concluded that
AIS are critical to the production of quality accounting information on a timely basis and
the communication of that information to the decision makers. To overcome a problem
identified a constructive recommendations was be made AIB should check the
information disperse in the company in order to minimize the knowledge gap.

Key word: AIS, Administrative Decision, Awash Bank

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Table of Contents
Acknowledgment..................................................................................................................I
Abstract...............................................................................................................................II
List of Tables......................................................................................................................V
Acronyms...........................................................................................................................VI
Chapter One.........................................................................................................................1
1. Introduction......................................................................................................................1
1.1. Background of the study...............................................................................................1
1.2 Statement of the problem...............................................................................................2
1.3 Research Question.........................................................................................................2
1.4 Objectives of the study...................................................................................................3
1.4.1. General objective.......................................................................................................3
1.4.2. Specific objectives.....................................................................................................3
1.5. Significance of the study...............................................................................................3
1.6. Scope of the study.........................................................................................................3
1.7 Limitations of the study.................................................................................................4
1.8. Organization of the paper..............................................................................................4
Chapter Two........................................................................................................................5
2. Literature Review............................................................................................................5
2.1. Information systems......................................................................................................5
2.2. Accounting Information System...................................................................................5
2.3. Accounting Information System and Organizations.....................................................6
2.4. Accounting Information System and Managerial Decisions........................................7
2.5. Management concepts and their effects an Accounting Information System...............8
2.5.1. Establishing organizational Goals (a planning function)...........................................8
2.5.2. Determining non-operational Goals (typically a long range planning functions).....8
2.5.3. Determining operational Goals (typically a short range planning functions)............8
2.5.4. Accounting Information System role in achieving operational goals........................9
2.5.5. AIS contribution to non-operational goals of responsive and motivated employees.9
2.6. AIS and performance measures....................................................................................9
2.7. AIS effectiveness........................................................................................................10
2.8. AIS integration............................................................................................................11
2.9. The relationship between AIS integration and AIS effectiveness..............................11
2.10. Information Interdependence....................................................................................12
Chapter Three....................................................................................................................13
3. Research Design and Methodology...............................................................................13
3.1. Research design..........................................................................................................13
3.2. Research approach......................................................................................................13
3.3. Source of data.............................................................................................................13
3.4. Target Population and Method of sampling................................................................13
3.5. method of data collection............................................................................................14

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3.6. Method of data analysis..............................................................................................14
Chapter four.......................................................................................................................15
4. Data Presentation and Analysis.....................................................................................15
4.1 Introduction..................................................................................................................15
4.2 Questionnaires analysis................................................................................................15
4.3 Analysis of interview...................................................................................................25
Chapter five........................................................................................................................26
5. Conclusion and recommendation...................................................................................26
5.1. Conclusion..................................................................................................................26
5.2 Recommendation.......................................................................................................27
References..........................................................................................................................28
APPENDIX........................................................................................................................29

IV
List of Tables
Table 1: Background information of the respondents

Table 2: This section present respondent’s attitude towards the awareness of Awash
International bank management about the use and implementation of AIS

Table 3: This part exhibits respondents’ attitude towards the use of AIS for
administrative decisions

Table 4: Respondents opinion about the effect of AIS on the effectively decisions of
their organization

Table 5: Respondents answer for question regarding the contribution of AIS for the
attainment of their organization objectives.

Table 6: This part shows respondents attitude towards the role of AIS in Awash
international bank administration.

Table 7: Respondents attitude towards the existence of knowledge gap between

different levels of management in awash international bank

Table 8: this part exhibits respondent’s attitude towards the standard services provided
by AIS and its contribution in the administration process over the past years.

Table 9: Respondents answer for questions regarding strategic positions and AIS
helpfulness in achieving this position

Table: 10 what is accounting information system problems existed in Awash

international bank?

Table: 11 Respondent answer for questions problems existed implementing AIS in

Awash International Bank

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Acronyms
AIB: Awash International Bank
AIS: Accounting Information System
IT: Information Technology
NBE: National Bank of Ethiopia
USAID: United State Agency for International Development

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 Chapter One

1. Introduction
1.1. Background of the study
Accounting information is a management planning and decision making. It refers to
report of relevant financial information regarding the economic activities of an
organization or business venture. Management is constantly confronted with the problem
of alternative decision making especially knowing that resources are relatively scarce and
limited. It is therefore pertinent that good accounting information be made available for
proper and accurate decision making, maximization of profitability and optimal
utilization of scarce resource. Accounting Information System is vital to all organizations
(Borthick and Clark, 1990; Curtis, 1995; Rahmanet al., 1988; Wilkinson, 1993;
Wilksonet al., 2000) and perhaps, every organization either profit or nonprofit-oriented
need to maintain the AIS (Wilkinson, 2000: 3-4).
To better understand the term “Accounting Information System”, the three words
constitute AIS would be elaborate separately, firstly, literature document that accounting
could be identified into three components, namely information system ‘‘language of
business’’ and source of financial information ( Wilkinson, 1995:6-7).Secondly,
Information is available data processed that provides basis for making decisions, taking
action and fulfilling legal obligation. Finally, system is an integrated entity where the
frame work is focused on a set of objectives ( Watts, 1999).
Accounting is the service function that seeks to provide the users with quantitative
information on the other hand, AIS is an information system that is designed to make the
accomplishment of accounting function possible. AIS process data and transactions to
provide users with the information they need to plan control, and operate their business
( Saira et Al., 2010).

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1.2 Statement of the problem
The main purpose of accounting is to provide financial information to be used for
decision making. For instance, business executives and managers need the financial
information provided by the accounting system to help them to plan, control and evaluate
business operations. Outsiders such as bankers, potential investors and labor unions and
other also need accounting information. (Plunkett: 1986)
According to USAID, 2006 Accounting Information System is useful if it has a potential
for making administrative decision otherwise it misleads the users idea and also it lead
them to decide wrong decision and that may be the cause for bankruptcy or loss of the
organization. In most business organizations this problem is visible especially; they do
not utilize AIS as a tool for the administration purposes. Besides, they have no proper
AIS which help to improve the administrative quality of the organization. The research
gap which makes the research different from the other research is: based on objective,
statement of the problem, and scope of the study it differs from the other. The objective
of this study is to assess the Accounting Information System of Awash International Bank
at specific place which is called Assosa branch. The prevailing problem is; most business
organizations do not use accounting information system for administrative decision
because of this the users ideas are misleading and managers are deciding wrong decision.
(Saira et Al, 2010).This is causing bankruptcy or loss in the organizations. Since the
objective is examining Accounting Information System of Awash International Bank at
specific place in Assosa branch, it can never be exactly the same with others.

1.3 Research Question

 Did Awash International Bank use AIS effectively for administrative decisions?
 What is the role of AIS in Awash International Bank?
 Is a knowledge gap exists on the use of AIS between different levels of
management in Bank?
 What is the relationship between AIS and quality of administrative in Awash
International Bank?

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1.4 Objectives of the study

1.4.1. General objective

The general objective of this study was to examine the Accounting Information System
and its impact on administrative decisions in the case of Awash International Bank of
Ethiopia Assosa branch.

1.4.2. Specific objectives

This study aims to achieve the following specific objectives
- To know Awash International Bank is using AIS effectively for administrative
decisions.
- To investigate the role of AIS in Awash International Bank.
- To identify a knowledge gap exists on the uses of Accounting Information System
between different level of management in Bank
- To know the relationship of AIS and quality of administrative in Awash
International Bank

1.5. Significance of the study

The results of this study were help Awash International Bank understand the weakness
and strength of its AIS. The study findings and recommendation are highly important to
the management of the institution (AIB). It draws their attention to the some of the points
are corrective actions should be taken. Furthermore it would be used as an additional
reference material.

1.6. Scope of the study

The study has focused on the Accounting Information System and its Impact on
Administrative decision of Awash International Bank. Although the bank has many
branches throughout the country, the study is restricted on Assosa town. Beside the study
cannot visualize overall impact of AIS on the organization as a whole it’s mainly
restricted on administration area. The time path of the research was restricted on the fiscal
year of 2016-2017/18.

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1.7 Limitations of the study
The success of every study greatly depends on the availability of resource with
conductive environment. However some of the limiting factors that the researchers faced
up while conducting this research paper were the following. .
1. The unwillingness of the respondents to give information.
2. Lack of sufficient written document about accounting information system and its
impact on administration.
3. Time and financial constraints.

1.8. Organization of the paper

This research paper is organized in to five chapters. Chapter one states introduction that
includes background of the study, statement of the problem, objective, significance and
scope of study and limitations of the study. The second chapter presents review of related
literature. The third chapter deals with research design and methodology which include
research design, source of data and data collections, sampling method and method of data
analysis techniques. The fourth chapter composed data analysis and interpretation and
finally the last chapter deals with the summary, conclusion and recommendations.

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 Chapter Two
2. Literature Review

2.1. Information systems

Information is further processed data that has meaning and purpose. This gives the
information value for specific persons and meets their particular information needs thus,
information is a basic source that individuals and organization must have, to survive and
succeed in today’s competitive and dynamic environment (Romney, 2003). An
Information System is a set of people, procedure and resources that collects, transforms
and disseminates information in an organization (O’Brien, 2004).
An Information System is a set of organized procedure that, when execute provides
information to support the organization. Thus Information System are systems designed
process data and produce information which is a vital resource for individuals,
organizations, and the society as a whole (Lucas, 1997). AIS perform three important
functions in an organization first, it collect and store data about activities and transaction
so that the organization can review what has happened. Second it, process data into
information that is useful for making decision that enable management to plan, execute,
and control activities. Finally it provide adequate control to safeguard the organization
asset, including its data these control ensure that the data is available when needed what
is accurate and reliable( Bhatt, Thomas and Kleiner,2001)

2.2. Accounting Information System

An Accounting Information System (AIS) is a system that collects, records, stores, and
processes data to produce information for decision makers through using Advanced
technology or simple system or in the between of the two ( Romney and Steinbert.2002).
AIS can be a very simple paper and pencil based manual system, a very complete and
information technology, or something between these two extremes, regardless of the
approach taken, the process is the same. The AIS and the people who use it must still
collect, enter process, store and report data and information (Romney, 2009).

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Accounting Information System (AIS) as one of the most critical systems in the
organization has also changed its way of capturing, processing, storing and distributing
information. Nowadays, more and more digital and online information is utilized in the
accounting information systems. Organization need to take an action, which put such
systems at the forefront, and consider both the system and the human related factors
while managing their accounting information systems. In managing an organization and
implementing an internal control system, the role of accounting information system (AIS)
is crucial (Asse, 2007).

2.3. Accounting Information System and Organizations

Virtually all organizations from business and government agencies to hospital,
educational institution have an Accounting Information System. Among these groups, the
AIS of business organizations tend to be the most highly developed and innovative. Many
of the same concepts, techniques and principles are equally applicable to AIS in other
kinds However of organizations (Murphy and katharinne, 2002).
The modern business organization served by the AIS is a very complex institution such
an organization may employee thousands of people in tasks ranging from the
development and engineering of new products to the management of a large sales force.
The activities of prominent companies are of interest to many segments of society
customers, suppliers, employee’s lenders stock holders and the various government under
whose jurisdiction they operate ( Asse, 2007).
How can the modern business organizations plan coordinate, and control the multitude of
activities that it under takes? How can it supply information to the many people and
institutions that are interested in its activities? The AIS plays a vital role in accomplishing
these tasks. It is use full to examine AIS is from view point of uses who utilize
accounting information as a business for making decisions, there are two basic categories
of such uses those external to the business organization and those internal, external uses
are many and varied. Their needs are met to some extent by the publication of general
purpose financial statements, such as the income statement and balances sheet (Romney,
2009).Trade owners usually employee An AIS to make their accounts bundling feasible,
rapid and precise. Since the system is all about the investigation and evaluation of the

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records with the ultimate preparation of statements, it gives less room for errors.
Moreover, many AIS have a built in means of mistakes reduction all the information is
compiled in an automated way. The communications are all electronic hence there are
minimal instances of mistakes. In addition to this the process takes less time with your
work being more efficient than before. On the other hand, the cost of the execution of an
AIS may be high however, the advantages that it promises in the long run out weights the
cost incurred. AIS provide all the equipment that is needed to keep track of one’s
financial proceedings together the data about one’s clients and dealers.
The main objective of this structure is to endow he companies with their financial status
and capabilities. Here this can assist the managers to highlight and recognize the variation
in their business. Besides this in order to decide as to whether a particular company needs
an AIS and what type is required is that key information that a user has to find out by
through scrutiny of all the accounting procedures and the assessment of the nature of
dealings. Only then one can conclude an all the clear cur necessities of an AIS of any
company (O, Brien, 2004).

2.4. Accounting Information System and Managerial Decisions

Decision making is defined as a rational choice among alternatives there have to be
options to choose from; if there are not, there are no choice possible and no decision.
Decision making is a process, not a lightning bolt occurrence. In making the decision
manager is making a judgment reaching a conclusion from a list of known alternatives
(Plunkett;1986).
A vital role of the AIS is to supply internal decision makers with information that
relevant to their needs. An organization is held together by its information network, the
acquisition, use retention and transmission of information one of the primary network
members in an organization is its AIS. The AIS summarizes and filters the data available
to decision makes. By processing the data, the AIS influence organizational decision
(Romney, 2003).

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2.5. Management concepts and their effects an Accounting Information System.

2.5.1. Establishing organizational Goals (a planning function)

Accountants must thoroughly understand their organization’s goals in order to make
positive contribution to their accomplishment. A goal basically represents what one is
attempting to achieve. Most people as well as organizations have several goals. Ideally
the multiplicity of goals that employees and their organizations have should be in
harmony with each other. The harmony among employee’s goals and organizational
goals is called goal congruence. This means that in the process of achieving personal
goals the individual employee also contributes toward accomplishing organizational
goals. On the other hand frustration can result when the positive achievement of one goal
conflicts with other goals, which is called goal incongruence. This type of frustration
occurs in both individuals and organizations (Murphy and Katharine, 2002)

2.5.2. Determining non-operational Goals (typically a long range planning functions)

Most organizations perform both longer and short range planning. The former is normally
the function of an organization’s top management and it’s sometimes also called strategic
planning. Through its long range strategic planning, the organization develops a “plan of
attack” for the future. The strategies established by top management are usually
expressed in broad, non-operation terms (Murphy and Katharine, 2002).

2.5.3. Determining operational Goals (typically a short range planning functions)

Employees within the company’s individual subsystems (accounting, production,
marketing, finance, personal and electronic data processing) must thoroughly understand
their company’s long range goals and attempt to contribute positively to these goals. Each
subsystem is responsible for developing operational goals that will help accomplish the
company’s nonoperational goals. To achieve these non-operational goals, employees
from the various subsystems should communicate with one another so that their goals are
in harmony, rather than in conflict we was now examine the role played by the
company’s Accounting Information System in achieving the company’s operational goals
(Murphy and Katharine: 2002).

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2.5.4. Accounting Information System role in achieving operational goals
The AIS’s major contribution to the company’s top management non-operational goals is
the development of long range as well as short range operational budgets. Because
budgets affect all organizational sub systems, the accountants must communicate with
each subsystems employees and seek their participation in planning, implementing and
controlling the budgetary system (Murphy and Katharine 2002).

2.5.5. AIS contribution to non-operational goals of responsive and motivated

employees.
The personal subsystem has the primary responsibility for achieving these goals. As a
result of effective personal selection procedures, adequate compensation, efficiently
operating training programs, and the involvement of employees in challenging activities,
the company labor force should have positive attitudes toward their work environments
the accountants, in performing their cost accounting budgetary and systems study
functions, must consider the human element within a company. Rather than just
informing the employees what their budget allowances or unilaterally introducing
systems change for instance, the accountant’s should be seek the employee’s participation
in making these decisions. Employees should be more responsive and positively
motivated to achieve their company’s goals if they participate in various decisions
affecting their work environment (Murphy and Katherine, 2002).

2.6. AIS and performance measures

Thanks to investment in AIS, the scope for action is expanded, thus providing time
saving in trips to and dealings with banks, the administration etc. This reduces firms cost
productively increases when these innovations are properly used. In so far as a firm’s
culture is open to the introduction of new Accounting Information’s System this was lead
to a more holistic view of it and make for greater flexibility and dynamism in
organizational search for improved results ( Downs and Barclay, 2008).

Despite of some authors who postulate that the direction of the cause effect relations hops
only those companies achieve a high performance when they can afford the
implementation of certain technological developments. Other indicates that firms

9
performance drops just after the implementation taking several years to realize the
entities from IT adoptions. There are several study work which, in the widest sense, have
studied relationships between performance indicators and IT, and how IT impact on firm
performance achieving inconclusive results (Plunkett;1986)
There are studies which obtain a positive relationship between investment in IT and
economic profitability, financial profitability and value added. Other study shows that no
clear relationship exists between this type of investment and the performance indicators.
Their authors argue that currently, it is readily available and using them gives no
competitive advantage for achieving improved results. Similarly, they maintain that many
firms have invested in IT but they do not succeed in attaining the established performance
goals. Although study on the IT performance ratio is more abundant in large sized firms,
the analysis a of the impact an small sized ones becomes particularly important because
investment in these technologies may give them a competitive advantage and the chance
to position themselves to achieve better results since they are more flexible and have
better response capability (Borthick and Clark,1990).
In Spain, in most sectors there is a generalized opinion that using information
technologies has been decisive in expanding the business market and in saving
commercial management cost. Give that AIS are a basic component derived from
technologies in general the main issue is whether applying Accounting Information
System contributes to firms improving their results(Plunkett;1986).

2.7. AIS effectiveness

Information system has defined system effectiveness in terms of “user information
satisfaction “or perceptions of system users about the extent to which the information
system available to them meets their information requirement. Given the lack of objective
systematic indicators of information systems effectiveness that might suggest the
potential impact of a system on organizational performance, user’s information
satisfaction has been generally accepted as far utility in decision making. Accounting
systems are often the most important formal success of information in industrial
organizations. They are designed to provide all levels of management with timely and
reasonably accurate information to effect on performance management and help them

10
make decisions which are in agreement with their organizations goals performance is one
of the most important constructs in managing research ( Richard, Devinney and Yip,
2008).

2.8. AIS integration

AIS integration is defined in terms of the following two characteristics (a) the degree of
integration in internal AIS applications and (b) the degree of integration between the inter
organizational systems and the internal AIS applications. Accounting systems are
primarily influenced by contextual factors that affect accounting processes for transaction
processing, reporting, internal control, process monitoring, and performance evaluation.
These characteristics can capture the range of potential contractual influences. The
integration of AIS applications was measured by the extent of standardization in coding
schemes and by the extent to which applications systems adhere to standard coding
schemes. These two items are developed in this study and based on the operational
concepts of data integration which refers to the use of common field definitions and cods
a cross different parts of the organization (O, Brien, 2004).

2.9. The relationship between AIS integration and AIS effectiveness

AIS integration has been defined above as a system design state that influences the ability
of the system to provide output information that can be effectively used to respond to
outside classroom curriculum requirements. At the conceptual level therefore, AIS
integration is related to AIS effectiveness. Increased system integration has been
suggested to improve communications both within and across organizations. The
relationship between the use of integrated systems and users evaluations of “task –
technology fits”, that is, the degree to which a technology assists an individual in
performing his or her portfolio of tasks. Electronic integration among inter organizational
and internal information systems has also been reported to have a significant association
with a perceptual measure of user information satisfaction and an objective measure of
shipment discrepancy reduction in the automotive industry. In conclusion system
integrations are shown to be an important construct in past study. Accounting systems are
primarily influenced by contextual factors that affect accounting process for transaction
processing, reporting, process monitoring and performance evaluation(plunkett;1986)

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2.10. Information Interdependence
Information Interdependence is defined as the required information sharing between pairs
of organizational functions that are supported by AIS applications. Applications in AIS
were identified by a large. Scale study in the United States to relate to the following four
areas (a) accounting (b) procurement, (c) shipping /distribution, and (d) reporting/
budgeting. These areas encompass a set of interacting activities that share financial
information processed by AIS. Prior accounting studies have used a single item to
measure task interdependence or a dichotomous measure of work flow inter dependence,
where interdependence was measured as the extent of resource sharing among
organizational sub units. The present approach directly relates interdependence to
requirements for organizational coordination and control that are relevant to the design of
AIS(Romney 2003).

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 Chapter Three
3. Research Design and Methodology

3.1. Research design

A descriptive study was used to examine the impact of AIS on Administrative decision of
Awash International Bank. The researchers was used qualitative research design and to
get reliable information.

3.2. Research approach

The research approaches are plan and the procedures for research that span the steps from
broad assumptions to detailed methods of data collection, analysis, and interpretation.
The overall decision involves which approach was used to study qualitative approaches.
The researchers was use qualitative approach because which is depending on the
attitudes, opinions and behavior.

3.3. Source of data

For the purpose of achieving research objectives, primary data were used. The primary
data are interview made on target population and questionnaires.

3.4. Target Population and Method of sampling

In conducting this study, the researchers was used non-random sampling method. The
total population of the study employees of the bank such as the manager and Cashiers,
Loan Officers, Accountant, Customer Service Officer, Internal Auditors. Samples of 15
out of total population of 24 were selected. The researchers use judgmental sampling
techniques because this method help to collect relevant information from employees,
which is not documented, based on experience and knowledge, it to minimize cost and
time of study. It is also important to get detail information that improves the quality of the
study. Others are guards are not considered as sample because they have no knowledge in
the subject matter of this study.

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3.5. method of data collection
From the various data collection instruments the researchers have used the primary data
collection used both open and close ended questioners, interviews to gather relevant
information from employees work in Awash International bank of Assosa branch.

3.6. Method of data analysis

In order to achieve the researchers was descriptive data analysis. This method was help to
analysis and suggests that data was collected from primary sources. Descriptive data
analysis also assists to analysis data using table, percentage and description of the result
from data presentation and analysis.

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 Chapter four
4. Data Presentation and Analysis

4.1 Introduction
This chapter deals with the brief description of Awash international bank accounting
information system contribution in the effective administrative decision of the
organization. Data analysis and interpretation is also included in this chapter. The
analysis based on data collected form documents on Awash International bank and form
primary data collected by questionnaires and by holding interviews with staff at various
management and with finance department whose day to day activities mainly concerned
with accounting information system and uses it directly in the management activity so
that conclusion could be drawn based on the findings.

Questionnaires were distribution to (15) employees of Awash International bank who has
direct work relationship with management and finance department and all respondents
have completed and submitted the questionnaires. Thus, the methods used to collect the
data have enabled to get reliable information about the study area.

4.2 Questionnaires analysis

Table 1, Background information of the respondents
No Question No Respondents %
1 Educational background
Diploma 2 13.3%
BA Degree 11 73.3%
Above BA degree 2 13.4%
Total 15 100%
2 Position
Account clerk 2 13.4%
Internal Auditors 3 20%
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 Call cashier 3 20%
Manager 2 13.3
Teller 5 33.3%
Total 15 100%
5 Service year
1-3 4 26.7%
4-7 8 53.3%
8-11 3 20%
Above 12 years 0 0
Total 15 100%
Source: Survey, 2018

The educational background distributions of the respondents show that most of the
respondents have educational qualification of BA degree and some of them are diploma
holders.
The positions share by respondents constitutes 13.4% of account clerk, Internal Auditors
20%, cashier 20%, manager 13.3%, and 33.3% tellers. This has an advantage to study in
that it is mainly taller who involved in the use of accounting information system in the
routine activity of Awash International bank. As far as the distribution of service year of
respondents’ is concerned, most of the respondents’ stayed in organization from 4-7 years
and some of them, are also stayed from 1-3 years, because of the organization
established after military government down fall, so that most respondents’ did not stayed
for long years.

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Table 2: This section present respondent’s attitude towards the awareness of Awash
International bank management about the use and implementation of AIS
Question 4, how is the awareness of Awash International bank Respondent
management about the use and implementation of accounting information No %
system?

Highly ware 6 40%

Aware 8 53.3%
Less aware 0 0
No opinion 1 6.7%
Total 15 100%
Source: Survey, 2018
Answer: the majority of the respondents’ to the extent to 53.3%having knowledge about
the awareness of AIS in usage and implementation and 40% of them have highly
knowledge. And no opinions 6.7% of them has doubted or no have knowledge on the
awareness of it, so this might be result from the awareness of the respondent is high on
the implementation of AIS.

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Table 3: This part exhibits respondents’ attitude towards the use of AIS for administrative
decisions
Questions5, do you believe that accounting Respondent
information system is used by Awash No %
International bank effectively for
administrative decisions?

Strongly agree 9 60%

Agree 5 33.3%
Disagree 0 0
Strongly disagree 0 0
Don’t know 1 6.7%
Total 15 100%

Questions 6, How helpful has the AIS to your No %

business in administrative decision?

Very much helpful 10 66.7%

Helpful 5 33.3%
Not helpful 0 0
No opinion 0 0
Total 15 100%
Source: Survey, 2018
Answer: As it can be from the table above 60% of respondents strongly agree on the use
of AIS effective administrative decisions and 33.3% of them simply agree. When we
come to the extent of help fullness 66.7% of the respondents replied that AIS is very
much helpful for administrative decision to their business and the 33.3% of them agree on
helpfulness slightly, so this shows that AIS have great role in administrative decisions.

As the annual report indicate, Awash International bank profit is increasing from the start
of its establishment, the probably results from effective administrative decisions using of
AIS.

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Table 4: Respondents opinion about the effect of AIS on the effectively decisions of their
organization
Question 7, in your opinion how do you evaluate the effect of Respondent
accounting information system on quality of decision of your No %
organization?

Increased the quality 13 86.7

%
Decrease the quality 0 0
Not change its quality 2 13.3
%
Not sure 0 0
Total 15 100
%
Source: Survey, 2018
Answer: the majority of the respondents, to extent of 86.7% confirmed that AIS increased
the quality of decision and 13.3% of respondents replied than not change its quality.
This indicate that AIS have big role in increased the quality of decision. But it differs in
its performance of AIS; if there is good AIS system there is good quality of decisions and
vice versa.
Table 5: Respondents answer for question regarding the contribution of AIS for the
attainment of their organization objectives.
Question 8, Does accounting information system contributes for the Respondent
attainment of your organization objectives? No %

Yes 15 100%
No 0 0
Total 15 100%
Source: Survey, 2018

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Answer: All of the respondents confirm that the contribution of AIS for attainment of
organization objectives, the table will head use to, AIS is one of essential component of
organizations in order to achieve organizational objectives.
Table 6: This part shows respondents attitude towards the role of AIS in Awash
international bank administration.

Question 9, what is the role of accounting information Respondent

system in awash international bank administration? No %

Improved decision making 2 13.3%

Improved management reporting 2 13.3%
In sharing of knowledge 1 6.7%
Improved efficiency 3 20%
Improved transactions processing 3 20%
Improved decision making efficiency 1 6.7%
Improved decision making, management reporting and 3 20%
transaction processing
Total 15 100%
Source: from bank employees, 2018
Answer: as the table depicts, above all of the respondents said that the role of AIS in the
awash international bank administration is in all aspect such as in decision making,
management reporting, sharing of knowledge, efficiency and transition processing. So
that we can perceive from this, AIS have a big role in administration of one organization.

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Table 7: Respondents attitude towards the existence of knowledge gap between different
levels of management in awash international bank
Question 10, Does knowledge gap exist between different levels of Responden
management in Awash international bank? t
No %
Yes 10 66.7%
No 2 13.3%
Don’t know 3 20%
Total 15 100%
Source: from bank employees, 2018
The majority of respondents, to the extent 66.7% confirm that there is a knowledge gap
between different levels of management and 13.3% of the respondents do not agree in the
existence. Therefore, this is shows a knowledge gap existence between different level of
management of the organization.

Table 8: this part exhibits respondent’s attitude towards the standard services provided by
AIS and its contribution in the administration process over the past years.
Question 11, How do you rate the standard service provided by AIS over Responden
the past years? t
No %

Have improved 7 46.7%

Have improved little 3 20%
Have deteriorated 3 20%
Have not changed 2 13.3%
Do not know 0 0
Total 15 100%
Source: Survey, 2018

Answer: above 46.7% of the respondent know the standard services provided by
accounting information system have shown improvement and 20% of the respondents
understand that the contribution made by AIS over the last years have little improved.

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From the above table 8 the roles of AIS in providing the standard services are showing
improvement from time to time. As assistance of AIS in decision making is now widely
spread, it also helps the management of Awash international bank in order to increase
income efficiency effectiveness and enabling frequent data processing for its decision
making strategy.

Table 9: Respondents answer for questions regarding strategic positions and AIS
helpfulness in achieving this position
Question 12, what strategic positions is Awash International bank Responden
pursuing? t
No %

Variety based 8 53.3%

A need based 4 26.7%
An access based 3 20%
Total 15 100%

Question 13, How helpful has accounting information system to achieve No %

this position?
Very much helpful 10 66.6%
Helpful 3 20%
Not helpful 1 6.7%
No opinion 1 6.7%
Total 15 100%
Source: Survey, 2018

From the above table 9:- 53.3% of the respondents said that the organizations
management is pursuing a variety based strategic position and 26.7% answered that the
management of Awash international bank, is following need based. As it can be observed
the majority of the respondents replied the management of Awash international bank is
pursuing variety based strategic position. A variety based strategic position involves
producing providing subset of the industries products or services. Here it should be bear

22
in mind that Awash international bank is offering multi-channel banking that is providing
via on ATM, through the internet, or over the phone, visa card, gift card, payroll card and
debit card this shows that is using variety based strategy.

From the second question table 9 – above 66.6% of the respondents replied that the AIS
plays an essential role or very much help full in helping achievement of the strategic
position. So that AIS is crucial for the achievement of strategic position of an
organization.
Table 10 what is accounting information system problems existed in Awash international
bank?
Question 14, if there is a problem, what is accounting Respo Percent
information system problems existed in Awash ndents ages
international bank?

Delay in process 5 33.3%

Data redundancy 2 13.3%
Misunderstanding 0
Delay in communication 7 46.7%

Inconsistence 1 6.7%
Total 15 100%
Source: Survey, 2018
Based up on the above table there is some problem existed in the organization which is
accounting information system related. Most of the respondents or 46.7% of them said
that delay in communication of the information between each department or from
manager to employee and 33.3% of them also says that there is also delay in processing
of the information. The problem of miss understanding is not there because of all related
department work interpreted using one IT serve which every organization information
settled.

Table; 11 Respondent answer for questions problems existed implementing AIS in

Awash International Bank

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 Question 15, Is there any problems existed in Respondents
implementing accounting information system
in Awash international bank?
No %

Response

2 13.3
Yes

No 11 73.4
Don’t know 2 13.3

Total 15 100%
Source: Survey, 2018
The majority of respondent 73.4% there is no problem exist in implementing accounting
information system in AIB and 13.3% the problem existed implementing accounting
information system. Therefore, it shows that a little problem implementing accounting
information system in AIB.

4.3 Analysis of interview

In order to aid the research, the information was gathered by the way of interview from
Awash international bank staff. The AIS issues were raised during the interview in order

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to make valuable discussion on study. The following are essential points that gathered
through the interviews.
1. The components parts of Awash international bank AIS. The main component part of
Awash international bank of Assosa branch that is they are using is flexible software.
Flex cube software enables the bank to simplify the processes, track and quickly
manage complex transactions, identify bottlenecks and improve customer service
There is benefit of flexible software such as:-
 Sustain growth and ensure continuous improvement
 Achieve a rapid return on investment, ability and ownership
 Reduce the cost and time implementation with reliable methodology, standards
and best practices
2. The main inputs of awash international bank. The main inputs of AIS Awash
international bank is transaction such as: Foreign transaction, ATN tractions
purchase, deposit, withdrawals, salary payment, maintenance closing entry.
3. In the Awash international bank all related department work interpreted using one IT
serve which every organization information settled so the possibility for
misunderstanding is less.

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 Chapter five
5. Conclusion and recommendation
From the research the finding and from review of related literature the following
conclusions and recommendations are forwarded by taking the objective of the research
under consideration.

5.1. Conclusion
 A vital role of the AIS is to supply internal decision makers with information that
relevant to their needs. The AIS major contribution to the organizations is its
helpfulness for administrative decisions.
 Accounting information system is vital to all organization in decision making,
management reporting, sharing knowledge, in improving efficiency, in improving
transaction processing and so on. Every organization either profit or nonprofit
oriented need to maintain the AIS.
 The accounting information systems major contribution to the company top
management objectives is the development of long-range as well as short-range
operational budgets. So that AIS is main tool for the achievement of
organizational objectives.
 In our case, there is a knowledge gap on the use of AIS between different levels of
management.
 The quality of decisions in organizations is highly affected by AIS which in turn
affect the administration, in our case; AIS increased the quality of decision.

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5.2 Recommendation
Based on the findings, in order to avoid or possibly reduce the problem existing in
accounting information system and its impact on administrative decision some
recommendations can be suggested like:
 Awash international bank should check the information disperse in the
company in order to minimize the knowledge gap.
 To increase the awareness of the management about AIS, Awash international
bank should provide training and technical support.
 In order to provide good quality of decision Awash international bank should
increase the performance of AIS. For example by introducing latest AIS
software.
 Awash international bank should update and revised its AIS in order to be
competitive in the sector.
 Effective communication and information flow is important for a good
accounting system, and the bank should provide communication channels
between top and lower levels of management regarding long and short term
objectives and the practical problems of implementing those objectives.
 Co-ordination from the top management will ensure proper interpretation and
implementation of the accounting information in decision-making. Therefore,
I recommend that every personnel should know where he or she belongs in the
entire organization and also see him or herself as part of the corporate whole.
These individuals must take part in decision-making process, at least at the
functional levels.

27
References
Borthick A. F and Clark, R.L. (1990).Making Accounting Information System work: An
empirical investigation of the creative thinking paradigm.Journal of Information System,
Downes, A.,& Barclay, N.( 2008). The Role of Performance Management in
Organizations.John Wiley & Sons Inc. New York, U.S.A
James A O’Brien (2001) introduction to information system 6th edition Boston McGraw.
Mid
James A. O’brien (2004) introduction to information system 10th edition Von HOA
mannpressInc, northern Artonal university USA
J. Richard, Timothy M. Devinney and George S.Yip 2008. AIS and their effect on
management.( 2nd Edition). John Wiley & Sons Inc. New York, U.S,A
Lucas, Henry C. (1997) management information system 5th edition new your
L. Murphy smith and Katherine T. Smith (2002). Accounting Information System 3rd
edition south western college publishing
Plunkett warren Richard (1986) introduction to management 2nd ed. Boston Mass Kent
pub.Co
Rahman, M. and Holladay, M. (1988).Accounting Information System: Principles,
Applications and future Directions. New jerse: prentice Hall.
Romney (2003), Accounting Information System 9th edition, practice Hall business
publishing.
Romney (2009), Accounting Information System 11th edition, Pearson education ince,
Brigham young university and artienstate university USA
Sairaet. Ali. (2010) Accounting Information System.
Wilkinson, J.W.(1993). Accounting Information Systems: Essential concepts and
Applications. Second Edition . New York: John Wiley and Sons Inc.
Wilkinson, J.W.( 2000). Accounting Information Systems: Essential concepts and
Application. New york: John Wilay and Sons.
Zimmeman J.L., (1995): Accounting Information System for decision making and
control, Chicago;Irwin’2

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 APPENDIX
ASSOSA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
Questionnaire
The purpose of questionnaire is to collect data and information on the impact of
accounting information system on administrative decision of Awash International
bank for the requirement of bachelor degree in accounting and finance.
Instructions:
 Please use a () mark in the appropriate box to indicate the answer
 Please write a short and precise answer for open ended questions
 Multiple selection is possible among the choices
1. Educational background
Diploma  BA degree  MA degree 
Other please specify ___________
2. How long have you been Awash international bank
1-3 4-7 8-11  Above 12 years 
3. Current position __________________________________
4. How is the awareness of awash international bank management about the use and
implementation of accounting information system?
High award  Award  Less award  No opinion 
5. Do you believe that accounting information system is used by Awash international
bank effectively for administrative decisions?
Strongly agree Disagree  Strongly disagree  Don’t know 
6. How helpful has accounting information system to your business in administrative
decisions?
Very much help  Helpful  Not helpful No opinion
7. In your opinion, how do you evaluate the effect of accounting information system on
the quality of decision of your organization?
Increase the quality  Not change its quality 

29
 Decreased the quality  Not sure 
8. Does accounting information system contribute for the attainment of your
organization objectives?
Yes  No 
9. What is the role of accounting information system in Awash international bank
administration?
Improved decision making  improved efficiency 
Improved management reporting  improved transactions processing 
In sharing of knowledge  in all of the above 
10. Does knowledge gap exist between different levels of management in Awash
international bank?
Yes  No  Don’t know
11. How do you rate the standard services provided by accounting information system
over the past years
Have improved  Have Improved a little
Have deteriorated  Do not know  Have not change 
12. What strategic positions is Awash international bank pursuing?
A variety based  A need based  An access based 
13. How help full has accounting information system to achieve this position?
Very much helpful  Helpful  Not helpful  No opinion 
14. If there is a problem, what is accounting information system problems existed in
Awash international bank?
Delay in process  Delay in communication 
Data redundancy  In consistency 
Misunderstanding  Other, please specify _______________________
15. Is there any problems existed in implementing accounting information system in
Awash international bank?
Yes  No  I don’t know 
16. If you have any other comment __________________________________________
Thank You!!

30
 Interview
1. What are the component parts of Awash international bank accounting information
system?
2. What are the main inputs of accounting information system of Awash international
bank?
3. Did accounting information system help strength your business skills in the last
years? Yes/No
4. Are all related departments of the organization work integrated using accounting
information system?
5. What benefit you get from the use of AIS? In case of record keeping, decision making
and performance evaluation etc?
6. Has AIS been a source of conflict during the last years? Yes/No, if yes in what way
do you explain.
7. Did AIS help your organizations in achieving its goals? Yes/No
8. Did AIS help your organization for administrative decision? Yes/No, if yes in what
way.
9. Has AIS been a source of new anxieties during the last years? Yes/No
10. Does in general AIS have effect or impact on the management or administration of
your organization? If yes, please describe.
11. If you have any other comment?

If have any question or comment contact on my Email: [email protected]

Phone Number: 093219756

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