STATEMENT OF DECLARATION We, Hana Workinah and Henen Sebsibe, hereby declare that this research,

entitled "Assessment of Accounting information system Practice (A Case Study on Bank Of Abyssinia Adama
Denbela branch)," submitted by us for the award of the degree of Accounting and Finance to Unity University at
Adama Campus, Ethiopia, is original work and has never been presented in any university. All sources and materials
used for this research have been duly acknowledged. Name: Hana Workinah Signature: ___ Place: Adama Name:
Henen Sebsibe Signature: ___ Place: Adama Date of Submission: ____ This Degree Research has been submitted
for examination with my approval as Research. Advisor Name: Signature_ Date_ STATEMENT OF
CERTIFICATION Unity University Adama Campus This is to certify that the research entitled " Assessment of
Accounting Information System Practice (A Case Study on Bank Of Abyssinia )" carried out by Hana Workinah
and Henen Sebsibe under advisor of ……and submitted in partial fulfillment of the requirements for the degree of
Accounting and Finance complies with the regulations of the university and meets the accepted standards with
respect to originality and quality. Approved by: Internal examiner: _ Signature _Date ___ Advisor: ___ Signature
_Date ___ Acknowledgement We want to thank God first and foremost for assisting us in completing this task.
Next, we thank …our advisor instructor, for his invaluable counsel. Additionally, we appreciate our parents'
unwavering financial and moral support. We are also appreciative of all of our friends who have offered their
opinions and moral support. Chapter One 1. Introduction 1.1 Background of the study It has often been said that
accounting is the language of business. If that is the case, then an accounting information system " AIS " is the
intelligence—the information-providing vehicle—of that language . Accounting is a data identification, collection,
and storage process as well as an information development, measurement, and communication process. By
definition, accounting is an information system, since an AIS collects, records, stores, and processes accounting
and other data to produce information for decision makers. . (Romney and Steinbart,4th edition 2018.) . The
accounting information system comprises the processes, procedures, and systems that capture accounting data from
business processes; record the accounting data in the appropriate records; process the detailed accounting data by
classifying, summarizing, and consolidating; and report the summarized accounting data to internal and external
users. ( Turner, Weickgenannt, Copeland 3rd edition .2017) Accounting information system is a combination of
people, equipment, policies, and procedures that work together to collect data and transform it into useful
information. It is a formal mechanism for gathering, organizing and communicating accounting information about
an organization’s activities. It is a system that provides people with either data or information relating to an
organization's operation to support the activities of employees, owners, customers, and other key people in the
organization's environment by effectively supplying information to authorized people in a timely manner. It is a
system, an assemblage of various facilities and personnel, providing information to support managerial
decisionmaking process (Khan, 2017) Its main function is to acquire, process, and communicate data that is
essential to the operation of the organization. Nevertheless, it is an entity, composed of various inter dependent
subsystems, working together to provide timely, reliable, and accurate information for decision making. It is a
network established in an organization to provide managers with information that will assist them in decision
making. It is a routine and an automatic system used for gathering and communicating data for the ends of assisting
and coordinating collective decision in view of the overall objectives of a firm. The successful accounting
information system would lead to the success of the organization in achieving its objectives but the unsuccessful
information system could lead to the failure of the organization in achieving its goals meaning thereby an inability
to grow and survive.(Mohammad Ali ,2018) The integration of Accounting Information Systems in the banking
sector has revolutionized financial management and operational efficiency. An Accounting Information System is
crucial for banks as it enhances the accuracy and efficiency of financial transactions and reporting. This system
enables realtime monitoring and analysis of financial activities, providing banks with a clear and accurate financial
picture that supports decision-making and strategic planning. Moreover, an AIS helps in improving the security
and integrity of financial information. Banks deal with large volumes of sensitive data, and an effective AIS
incorporates robust security measures to protect against fraud, data breaches, and other cyber threats. By ensuring
that only authorized personnel have access to certain financial data, and by providing audit trails for all transactions,
an AIS helps banks maintain data integrity and build trust with customers and regulators.In recent years, the rapid
advancement of technology has brought about significant changes in the way banks operate, making the assessment
of current AIS practices and their effectiveness crucial . To this end, this specific study will assess the accounting
information system practice on Bank Of Abyssinia adama Denbela branch. The research will find out uncover
deficiencies and propose enhancements that can lead to more efficient, reliable, and secure AIS practices within
the BOA. 1.2 Statement of the problem Accounting information systems work as a backbone for the growth and
development of any organization. We may consider it as a wide window from where you can clearly see the
structure and overall performance of the company. In this modern era, the rapid growth of information systems has
introduced a dramatic change in the field of the business world. ( Nazlum Huda.2021) Banks are key players in
financial market systems and play an important in keeping a country‟s economy running efficiently. In today‟s
highly competitive environment, the accounting system of any organization is responsible for providing qualitative
information to assist managements in their decisionmaking process (Arneld et al., 2015). AIS is the most valuable
and crucial assets of an organizations to maximize its profit and to determine the ongoing process of that
organization. Any organizations should focus on developing information system in order to effective and efficient
pass decision, communications of their information’s, knowledge of financial report qualities and other.(Rabira
2021) Traditional way of recording, summarizing and reporting company financial reports led to less optimal
decisions and poor accounting information endanger organizational performance, which makes managers
inefficient administratively that affects the financial performance, non-financial performance of operating in select
private and government commercial banks. (Himanot 2018). As far as previously done local researchers’
knowledge were concerned, those who have done studies on banking sector, were mainly concerned on the AIS
practice and performance such as, Hayimanot Tadege (2018) studied the linking of the desirable associations
between practice of AIS on performance of bank (financial and non financial ) aspect and Abreham Kebede (2021)
Studied the relationship between AIS success and business performance by considering AIS effectiveness as a
moderating effect. Some other studies were conducted in the accounting information system. Accordingly, few
studies were conducted on the related area such as, Getachew Ali(2021) Studied the relationship between AIS and
quality of managerial decision making in local governmental organization in Jimma zone. To overcome a problem
identified a constructive recommendation would be made the government is expected to be able to improve and
apply the right policy to overcome the weaknesses in IBEX system in order to increase resulted information quality
and eventually would affect the quality of managerial decision- making. Raji Dinsa(2022) studied the role of the
role of AIS on decision making process on selected charity association and its Key findings of this study showed
that Accounting Information has a significant role on decision making process in charity associations. The
researchers was try to see other local and foreign research is conducted related to Accounting Information System.
However the focus of most research was the AIS role and impact on other other related accounting issues. In
addition their study area was more of manufacturing and service companies , small scale business and other non-
banking sectors. As seen the above research the statement of problem mainly focuses on the impact of AIS on
decision making and performance there is a lack of comprehensive assessments of current AIS Practice on banking
sectors. Due to the above gap the researchers concern assessment of AIS practice on BOA. The researchers Primary
focus is assessment of current AIS practice in BOA, because such evaluations are essential to identifying key
components that enhance system effectiveness. In addition, personnel perception , IT infrastructure that are related
to obstacle for effective AIS practice, and control mechanisms have influence on AIS Practice in bank so that the
researchers aim to identify the causes of AIS problems within the bank and propose viable solutions to overcome
these issues.This research gives for BOA significant economic impact and solution to the existing gap in the
literature. 1.3 Major research question The researchers raised and will answer the following specific researchable
questions based on the possible causes of the main research problem. 1) what is the current AIS practice in BOA
2) what kind of understanding employees do have the usability, reliability, and effectiveness of the AIS practice at
the BOA 3) What are the specific information technology infrastructure obstacles hindering the optimal utilization
of AIS with in the BOA 4) What are controls mechanism to ensure compliance with established AIS procedures
and instructions 1.4 Objective of the study 1.4.1 General objective The general objective of the study will be to
assess the Accounting information system practice on Bank of Abyssinia . 1.4.2 Specific objective 1, to assess the
current AIS Practice in BOA 2, to evaluate employees understanding about usability , reliability and effectiveness
of AIS practice 3, to identify the specific information technology infrastructure related obstacles hidering the
optimal utilisation of AIS 4, to assess the control mechanisms to ensure compliance with established AIS
procedures and instructions . 1.5 Significance of the study This research will have a significant contribution to the
Bank Of Abyssinia to enhance AIS Practice efficiency to achieve the overall goal of the Bank. The researchers
believe that the results of this study will have the following benefits. • It will help to create awareness for managers
of the Bank to explore what is expected from them and also to increase their motivation; • It will provide useful
information to internal and external users. •It will offer actionable insights for enhancing the effectiveness , and
compliance of the AIS , in addition contributing to the bank's operational excellence . • It will be used as a source
of reference and guideline for other researchers who make further studies in the area • It will help banks to identify
factors that affect the effectiveness of AIS practice . 1.6 scope and Delimitation of the study The study mainly
focuses on assessment of AIS Practice in BOA in adama denbela branch . This study focuses specifically targeting
operational aspects related to financial transactions and data management . It encompasses evaluations of data
technical and user centric aspects of AIS including usability reliability , effectiveness and compliance . It addresses
internal control mechanisms and information technology infrastructure within the bank's operational environment .
The study geographically limited to BOA adama denbela branch and the findings are only from the perspective of
the bank . The other expected limitation that the researchers confronted will the Due to the nature of the subject
area of the research depends on having access to people, organizations, data, and documents, access to information
will not easy.There will a time lag that creates time span as we request to required information there will be a delay
in a response that affect the punctuality of schedule. 1.7 Organization of the study This study will organize in such
a way that it will give coherent flow of ideal to the basic findings. It has consisted of five chapter each brief
description. Chapter one has at length deal with an introduction that in turn involves background of the
study ,statement of the problem ,research question ,objective of the study ,significance of the study and scope of
the study. Chapter two will present the review literature and then methodology of the study discussed in chapter
three. Chapter four will include the data analysis and presentation and finally chapter five discuss summery,
conclusion, recommendation end up with reference Chapter Two 2.1 Theoretical Literature Review 2.1.1 System
A system is a set of things working together as parts of a mechanism or an interconnecting network; a complex
whole and a set of principles or procedures according to which something is done; an organized scheme or method.
A system is a collection of elements or components that are organized for a common purpose. A system is a set of
interacting or interdependent parts forming a complex or complicated whole. Every system is delineated by its
spatial and temporal boundaries, surrounded, and influenced by its environment, described by its structure and
purpose, and expressed in its functioning. (Ulric. J et.al,2017).A system is a set of interdependent elements that
together accomplish specific objectives. A system must have organization, interrelationships, integration, and
central objectives (Ulric. J et.al,2017). system is a set of two or more interrelated components that interact to achieve
a goal. Most systems are composed of smaller subsystems that support the larger system. For example, a college of
business is a system composed of various departments, each of which is a subsystem. Moreover, the college itself
is a subsystem of the university Each subsystem is designed to achieve one or more organizational goals.Changes
in subsystems cannot be made without considering the effect on other subsystems and on the system as a whole.
Goal conflict occurs when a subsystem’s goals are inconsistent with the goals of another subsystem or with the
system as a whole. Goal congruence occurs when a subsystem achieves its goals while contributing to the
organization’s overall goal. The larger the organization and the more complicated the system, the more difficult it
is to achieve goal congruence. (Marshall B. Romney • Paul John Steinbart ). 2.1.2 Information Information is data
that have been organized and processed to provide meaning and improve the decision-making process. As a rule,
users make better decisions as to the quantity and quality of information increase (Marshall B., 2017) 2.1.3
Definition of Accounting Information System It has often been said that accounting is the language of business. If
that is the case, then an accounting information system (AIS) is the intelligence—the informationproviding
vehicle—of that language. Accounting is a data identification, collection, and storage process as well as an
information development, measurement, and communication process. By definition, accounting is an information
system, since an AIS collects, records, stores, and processes accounting and other data to produce information for
decision makers(Marshall B. Romney • Paul John Steinbart ). accounting information system - A system that
collects, records, stores, and processes data to produce information for decision makers. It includes people,
procedures and instructions, data, software, information technology infrastructure, and internal controls and
security measures(Leslie Turner,Andrea Weickgenannt&Mary Kay Cope) The accounting information system
comprises the processes, procedures, and systems that capture accounting data from business processes; record the
accounting data in the appropriate records; process the detailed accounting data by classifying, summarizing, and
consolidating; and report the summarized accounting data to internal and external users. (Leslie Turner,Andrea
Weickgenannt&Mary Kay Copeland) . 2.1.4 The Importance of Accounting Information Systems to Accountants
(Leslie Turner,Andrea &WeickgenanntMary Kay Copeland)Anyone pursuing an accounting career must study and
understand accounting information systems (AIS) and the related concepts. Any career path within accounting will
in some manner involve the use of an accounting information system. Accountants have several possible roles
related to accounting information systems: They may be users of the AIS, part of the design or implementation
team of an AIS, and/or auditors of an AIS. Users of the AIS Accountants within any organization must use the
accounting information system to accomplish the functions of accounting, generating and using accounting reports.
For example, a controller in an organization must oversee a staff of accountants who record all accounting
transactions, do the monthly closing of the accounting records, and generate the reports needed by management
and external users. The accounting information system is the mechanism that allows the accounting staff to
accomplish those functions. Accountants must therefore understand AIS concepts in order to perform these
accounting jobs.Design or Implementation TeamAccountants are usually part of a multiple‐discipline team that
designs and/or implements accounting information systems. When an organization considers a change to its AIS,
accountants must be involved in decisions related to such matters as evaluating which software to purchase, how
to design software or systems, and the implementation of software or systems. Auditors of the AISAuditors conduct
assurance services such as a financial audit. To conduct an audit, the auditor must collect evidence and make
judgments regarding the completeness and accuracy of accounting information. The auditor cannot make informed
decisions necessary to complete the audit without an understanding of the accounting information system. The
auditor cannot judge the reliability of accounting data without understanding how the data is entered, processed,
and reported in the accounting information system 2.1.5 Ways That an AIS Can Add Value to An Organization A
well-designed AIS can add value to an organization first by improving the quality and reducing the costs of products
or services. For example, an AIS can monitor machinery, so operators are notified immediately when performance
falls outside acceptable quality limits. This helps maintain product quality, reduces waste, and lowers costs.
Secondly by Improving efficiency. For example, timely information makes a just-in-time manufacturing approach
possible, as it requires constant, accurate, upto-date information about raw materials inventories and their locations.
Thirdly can be Sharing knowledge and expertise can improve operations and provide a competitive advantage.
Fourthly it can improve the efficiency and effectiveness of its supply chain. For example, allowing customers to
directly access inventory and sales order entry systems can reduce sales and marketing costs, thereby increasing
customer retention rates. Fifthly it helps to improve the internal control structure. An AIS with the proper internal
control structure can help protect systems from fraud, errors, system failures,and disasters, and the last one is
improving decision making. Improved decision-making is vitally important (Marshall B. & Paul J., 2017). 2.1.6
Types of Accounting Information Systems There are very many different types of accounting information systems
used in business organizations today. The size of the organization, the nature of its processes, the extent of
computerization, and the philosophy of management all affect the choice of system. Simply to organize the study
of accounting information systems, we have divided the systems in place into three categories, as follows: 1. Manual
systems 2. Legacy systems 3. Modern, integrated IT systems Manual Systems Certainly, most large or medium‐
size organizations use computerized accounting systems rather than manual record‐keeping systems. However,
there are many small Manual Systems Certainly, most large or medium‐size organizations use computerized
accounting systems rather than manual record‐keeping systems. However, there are many small organizations that
use manual systems, in whole or in part, to maintain accounting records. In addition, even those larger organizations
that have computerized aspects of the accounting information system may still have parts of their processes that
involve manual records. For example, even if the calculation and printing of a pay-check in an organization are
computerized, the employee time card may be com-pleted by hand.Because small organizations often use manual
record‐keeping systems—and even computerized systems may rely on some manual record keeping—it is
important to examine manual processes in accounting information systems. An entirely manual system would
require source documents and paper‐ based ledgers and journals. Legacy Systems A legacy system is an existing
system in operation within an organization. A legacy system uses older technology in which the organization has a
considerable investment and that might be entrenched in the organization. Some legacy systems have been in place
for many years; perhaps the organization spent much time developing, maintaining, and customizing the system.
Often, legacy systems are based on old or inadequate technology. In large companies, many legacy systems run on
hostbased mainframe computers. “Host‐based” means that all significant computer processing takes place on the
mainframe host computer. Accounting software systems running on such computers are often written in
programming languages that are nearing obsolescence, such as COBOL, RPG, Basic, and PL1. During the last
couple of decades, even as technology advances have made these systems more outdated, many companies have
been reluctant to abandon their legacy systems because they were customized to meet the specific needs of the
organization and the process to replace them is expensive and time‐consuming. Legacy systems may have served
companies very well over many periods, and many organizations have legacy systems that they are still attempting
to maintain. There are both Modern, Integrated Systems In today’s AIS environment, numerous accounting
software systems are available for purchase that integrate many or all of the business processes within an
organization. In the early days of computer automation of accounting, much of the accounting software was
developed and written internally by the organization’s IT staff. Today, companies more frequently purchase
software rather than develop it internally. Often, purchased systems are modified by the IT staff to meet specific
needs of the organization.The new programs sold by software development companies are more user‐friendly than
legacy accounting systems, typically utilize the latest technology in data storage and Internet interfaces, and offer
powerful,technologically advanced systems that serve as an important part of the accounting information system.
described client–server computing and cloud computing(Leslie Turner,Andrea &WeickgenanntMary Kay
Copeland). 2.1.7 Internal influences on accounting information systems Such influences include issues related to
the size of the company; the knowledge base and intellectual capacity of the company (and its employees); the
structure/organization of the company, and the complexity of information demands and requirements; internal
management factors/features; and, of course, the availability of company resources (Mary Kay Copeland, 2017).
2.2 Emparical Literature Review Amina Yusuf , Fadumo Muktar , and Iqra Mohamed (2016) investigated the
influence of computerized accounting systems on decision-making in small-scale businesses in Mogadishu,
Somalia. The major objectives were to examine how these systems impact management decisions and their
effectiveness in reducing fraud. Using purposive sampling, 60 respondents from small businesses were selected.
Data analysis through mean and standard deviation revealed significant agreement among respondents that
computerized accounting systems positively influence decision-making and contribute to fraud reduction when
paired with effective internal controls. The researchers recommended that small businesses adopt accounting
information systems to enhance internal control structures and improve decision-making processes. Sheikh Nazmul
Huda, (2021) studied the impact of Accounting Information Systems (AIS) on organizational decision-making in
Istanbul, Turkey. Using a quantitative research design, survey questionnaires were distributed to 100 small and
medium-sized manufacturing and service companies. Data analyzed with SPSS-25 confirmed that effective AIS
significantly improves decision-making. The findings, consistent with previous studies, suggest that good AIS
practices enhance decision-making performance in these companies. Abraham Kebede(2021) studied the
relationship between information system (IS) success and business performance, and the moderating effect of
Accounting Information System (AIS) effectiveness on this relationship in the Commercial Bank of Ethiopia (CBE).
Utilizing both primary and secondary data, an explanatory research design, and random sampling, the researcher
collected data from CBE branch staff and customers using online questionnaires. Analysis through Pearson
correlation, multiple regression, and moderated regression on 108 employees and 108 customers revealed that IS
success positively impacts business performance. Additionally, AIS effectiveness moderately enhances this
relationship. The study recommends integrating information quality, service quality, and system quality in IS design
and considering AIS effectiveness to optimize business performance. Haimanot Tadege ( 2018) study aimed to
assess the practices and performances of accounting information systems (AIS) in selected commercial banks in
Gondar city. Using a cross-sectional survey design, it relied on both primary and secondary sources. Data was
collected from 242 employees through stratified random sampling and analyzed using descriptive statistics and
financial ratio analysis. Financial data from banks' balance sheets and income statements from 2013 to 2017 was
also included. The study found significant improvements in both financial and non-financial performances due to
AIS implementation, highlighting high managerial performance improvements and a positive correlation between
AIS service quality and managerial performance. However, it noted lower quality in the provision of information
services. The study recommends managers focus on AIS for decision-making processes. Getachew Ali(2021)
studied examines the role of Accounting Information Systems (AIS) in enhancing the quality of managerial
decision-making. Using both explanatory and descriptive research designs, data were collected from a sample of
214 respondents through structured questionnaires and interviews. Analysis, including Pearson correlation and
multiple regression, indicated that AIS significantly improves decision-making quality. Key factors such as
accuracy, timeliness, completeness, accessibility, and interpretability of accounting information were positively
correlated with decision-making quality, explaining 62% of its variation. The study recommends that the
government address weaknesses in the IBEX system and that local governments computerize their AIS to improve
accounting and financial reporting. Chapter Three 3. RESEARCH METHODOLOGY 3.1 Research Area The
research area is the organization selected for this study. For this specific study of BOA Adama Dembela branch is
targeted Bank. the organization is selected for the ground that it is commercial bank which is broadly use AIS for
operation and easy to collect data for the study. 3.2 Research Approac The quantitative or structured approach is
more appropriate to determine the extent of a problem, issue or phenomenon (Ranjit Kumar 2019). The researcher
is used quantitative research approach. Quantitative research allows for the objective measurement of variables
related to AIS practices, such as efficiency, accuracy, and user satisfaction. Therefore the research approach match
with the nature of the study case is quantitative research approach. 3.3 Research Design This research is designed
to investigate or assess the AIS practices in case of BOA. The research design in this study will Descriptive research
design. A study in which the main focus is on description, rather than examining relationships or associations, is
classified as a descriptive study(Ranjit Kumar 2019). 3.4 Target Population The class, families living in the city or
voters from which you select your sample are called the population or study population (Ranjit Kumar 2019). Bank
In conducting this research, the researcher selects the target population who is appropriate for the study. The total
population of the study Will the accountant, manager , and IT Department of the bank at the bank. The rationale
behind this is employees assuming management positions most likely knows about the contribution of the
accounting information system to the bank. ( ) employees will take for the study purpose . 3.5 Sample Design In
general, there are two basic sampling techniques: probability and non-probability sampling. A probability sample
is defined as a sample in which every element of the population has an equal chance of being selected (random
selection). Alternatively, if sample units are selected on the basis of personal judgment (non-random selection), and
elements of the population does not have equal chance of being selected, the sample method is a non-probability
sample (C.R Kothari). Probability sampling includes Simple Random, Systematic, Stratified, Cluster and
Multistage sampling methods. 3.6 Sample Size and Sampling Technique A sample is a subgroup of the population
which is the focus of your research enquiry and is selected in such a way that it represents the study population
(Ranjit Kumar 2019). And the sample size was taken when the population size is very large and difficult to control.
But in this study the population size is only ( ) employees. Hence, the study will use the total population as it is so
the researchers used census which means the researchers will use all items in the population for this study. The
manager in the population size have effective knowledge and current data on their banks AIS practice. This help
the researchers to get accurate and reliable data as well appropriate answer for the questions. 3.7 Source of Data
and Data Collection Tool The researchers will be use two types of data namely primary data and secondary data.
Sources of primary data are the selected employees of BOA.Regarding to secondary data sources, the researchers
going to refer any relevant literature available from appropriate journals,previous research related to AIS practice
and articles, web sites also used to demonstrate the identified objectives. The researchers will use the structured
and self-administered questionnaire technique mainly closed ended questions to collect data required for the
research. In line with this, the main instrument in data collection will be through questionnaires targeting sample
employees of the office.Questionnaire is a written list of questions, the answers to Which are recorded by
respondents.respondents read the question, interpret what is expected and then write down the answers. (Ranjit
Kumar 2019) It has the advantages for saving time and money. 3.8 Methods of Data Analysis In this study, the data
obtained from respondents with the help of chosen instruments will presented analyzed and interpreted with the
help of descriptive statistics and will described, analyzed and synthesized in tables and percentage. To do analysis
and presentation of data descriptive statistics is used because, the research design is descriptive and data analysis
and presentation must match with the research nature.