THE IMPACT OF COMPUTER IN PROCESSING ACCOUNTING INFORMATION IN BANKS (A Case Study of Fidelity Bank and Access Bank Plc)
ABSTRACT
The banking sector of any nation is indispensable for economic growth and overall development. Its crucial role towards nation building demands an effective and efficient system of operation. The attainment of this objective necessitates the utilization of computers in banking operations.
Computerization of banking operations is the vogue in the Nigerian banking sector. It greatly facilitates the updating of customer’s accounts; improve chequeing transactions and keeping of necessary data on customers for loan advances and other services. The speed and accuracy at which computer aids in rendering these services is quite unique.
This study therefore, is going to evaluate the impact of computer in processing accounting information. Analysis would be done on the positive and negative aspects associated with computerization. In analyzing the data collected, descriptive models and percentage were used.
The research findings revealed that computerization has speeded up customers services, contributed immensely toward information storage and retrieval.
In further case of the research objectives, recommendations were made, which if implemented the researcher hope it will bring about efficiency and effectiveness of banking transactions, minimize the adverse effect associated with computerized operations.
CHAPTER ONE
1.0 INTRODUCTION
Accounting is the language of modern business, a tool for business decision making. It is used by people associated with business whether owner, managers, investor, lawyers, bankers, accountants etc. it provides financial information to people inside and outside the organization that need it and at the same time, authorized to have such information.
1.1 BACKGROUND OF THE STUDY
An accounting information system is a group of components produces raw data into financial information to meet the purpose of the internal and external uses, however, when we talk of accounting information system we invariably refer to computer assisted techniques in accounting (warren 1997, pg 457).
A powerful force drives the world towards a converging commonality, and the force is technology has been one of the mast essential and important factors for the development of mankind.
Information technology (IT) can be said to be modern handling of information by electronic means which involves its access, storage, processing, transportation or transfer and deliver of data. Research shows that information technology affects financial institutions by easing enquiring, time saving, and improving the service delivery. Information technology has also improved the processing of accounting data to ensure accuracy.
The objective of financial information is to provide useful information for making economic decisions. The process of recording, aggregating and summarizing the effects of historical transaction in financial statement order a specified set rules constitutes the build of financial accounting. Organizations such as commercial bank need the accounting information in carrying out their operation, and transactions. Fortunately the electronic computer as an electronic device for storing data and analyzing information fed into it, for calculating or controlling machinery atomically and be used to perform commercial banking products and be operation and also aids managerial decision makers in planning and controlling of various business activities (warren etc 1997:49).
Accounting information possesses certain qualities necessary to satisfy users need. Two basic qualities for general purpose accounting reports supplied to external users are:
Relevance
Reliability
It is important to realize that for the information to be of any use to management or external users, that to be targeted at a specific decision. It is in this sense that the information may be said to be relevant or pertinent to the decision.
Relevance of accounting information is judged in relation to the users’ situation also accounting information signifies faithfulness, consistency and trustworthiness as stated by Mandadur and marries (1976:23).
One way of ensuring reliability in accounting information is to ensure adherence to accounting principles.
The computer was initially introduced into most corporate organizations to satisfy the efficiency concerns of processing vast amounts of accounting transaction data at the operational control. It proved so effective the role that virtually no sizeable organization can survive competitive presses without using this tool called the computer. In conclusion, the computer contributes to increased output, by increasing efficiency and its ability to perform predetermined task, tasks, faster and more accurately.
1.2 STATEMENT OF THE PROBLEM
The problems include
Poor facilities: the existing banking facilities in the country at this time cannot effectively cope with upspring in business activities.
Use of manual operations; cannot effectively cope with requirements of modern banking; this is because the banking function has changed into a poor complex one which emphasizes the availability of information at the shortest possible time and also the Time used in renders the financial services.
Slow banking operations arising as a result of the manual method applied.
Slow storage and retrieval system
Time wastage one to long queue in banks as a result leads to low customers patronage With the computerization of banking operation, one would think that problems faced with manual operation of banking transactions of commercial banks should have been solved, in spite of this new in ovation, service rendered in commercial banks have not improved, in the sense that, there are still queue in banks, and there still slow banking operation and so on.
1.3 NEED OF THE STUDY
The essence of this research work is to find out how well computer here aided the processing of accounting information in Nigerian commercial banks, particularly fidelity bank plc, and find out if computer alone with restructuring system can lead to improvement in organization performance.
1.4 OBJECTIVES OF THE STUDY
The objectives of the study are as follows:
Identifying the aim of study is to actually identify the impact, the computer has exerted on the banking industry.
It is geared towards identifying how the use of computer could increase the effectiveness of accounting information towards the realization set goals in banks.
The study is designed to bring into focus an overview of the application of computer to the various accounting information system and the service rendered by the banks. However, the study would pay attention to fidelity bank plc, in trying the impact and importance of computer in processing accounting information in communication banks.
1.5 RESEARCH QUESTIONS
Has computerization of accounting information improved efficiency in operation and accuracy of performance in banking operation?
Has computerization contribution to better information storage in the bank?
Has computerization reduced time wastage in carrying on banking transactions?
Has computerization led to the increase in the number of deposition at the bank?
1.6 SCOPE OF THE STUDY
The research work encompasses the importance of computer system and its operation in the processing of accounting information in banks taking fidelity bank as a case study. It also tends towards identifying how the usage of computer system would step-up the effectiveness of accounting information in the realization of set goals.
1.7 LIMITATIONS OF THE STUDY
The limitations of the study are as follows:
Time: the research was unable to gather all the necessary facts or information needed for the research work due to time constraints.
The study is limited to commercial banks in Nigeria and specifically fidelity bank plc. The study was unable to cover other commercial banks.
This study is also hampered by non-availability of financial resources to gain adequate fact and sate to extensively, delve into this research.
Another fact working against this research work is dearth of literacy materials for the study. Fidelity bank may not be disposed and willing to divulge information without crossing their palms with some silver”.
1.8 DEFINITION OF TERMS
DATA: data refers to any and all the facts that are collected, stored and processed by an information system. (Ojo 2000: 27).
SOFTWARE: these are programs used by the computer in carrying out specific operations (Ojo 2000: 27).
COMPUTER: IBN defines a computer as a machine that can by following a controlled sequence of information perform both logical and arithmetic operations with data and can also record results for either immediate or future reference (Tweedy 1980:31).
INFORMATION: information is data that has been organized and processed so that it is meaningful. The valve of information is the benefit produced by the information minus the cost of producing it (Ojo 2000: 27).
HARDWARE: the machine that processes the information stored in the memory (Ojo 2000: 27).
SYSTEM: A system is a set of two or more interrelated component that interacts to achieve a good (Ojo 2000:27).
ASSETS: these are those items, such as stock, debtors (receivable), cash/bank balance, motor vehicle, plant and machinery, building etc owned by the organization.
ACCOUNTING: this is the processing and/or providing needed information regarding primarily, the financial activities of the economic activities so that the user of this information may take decision about the entities.
SUB-SYSTEM: the parts that make up the whole system e.g. cpu, software, mouse, hardware etc of a computer.
BARTER: it is a type of trade transaction that involves goods for goods i.e. a buyer wants.
DOUBLE ENTRY: this is the basic accounting concept to which accounting records are based. This concept needed to develop the debit (DR) and credit (CR) connotations debit refers to left
hand while credit refers to right hand side.
COMMERCIAL BANK: a privately owned bank that provides a wide range of financial service both to the general public and to firms.
INFORMATION TECHNOLOGY (IT): the use of computer and other electronic means to process and distribute accounting information.
ELECTRONIC BANKING: carrying out banking transactions by means of a home computer linked to a banks computer via the internet (e-banking) or buy means of a telephone link to a call centre or a computerized system.
BANK: a commercial institution licensed as a taker of deposits.
IBM: an acronym for international business machine.
FUND: a resource managed on behalf of a client by a financial institution.
SERVICE: activities or benefit that the bank can offer to her customers that is intangible and does not result in the transfer of ownership of any physical object.
PLANNING: one of the functions of management accounting of an organization are incorporated into its budget.
CASH FLOW: the amount of cash being received and expanded by a business, which is often analysis into various components.
THE IMPACT OF COMPUTER IN PROCESSING ACCOUNTING INFORMATION IN BANKS (A Case Study of Fidelity Bank and Access Bank Plc)