THE EFFECT OF COMPUTERIZED ACCOUNTING SYSTEM ON THE PERFORMANCE OF SELECTED MONEY DEPOSIT BANKS IN NIGERIA

CHAPTER ONE

INTRODUCTION

• Background of the Study

Financial accounting can be defined as the process of collecting, recording, presently and analyzing and interpreting financial information for the users of financial statement (Rahman, 2016). Accounting is the language of modern business, a tool for business decision making. It is used by people associated with business, whether they are managers, owners, investors, bankers, lawyers, and accountant. It provides financial information to people inside and outside the organization who need and are authorized to have such information. A system like a computer in the most general sense of the word is a group of interrelated components that processed inputs into outputs to meet some objectives. An accounting information system is a group of components that processes raw data into financial information to meet the purpose of these internal and external users, however, when we talk of accounting information system we invariably refer to computer assisted techniques in accounting (Warren et al. 2017).

The objective of financial information is to provide useful information for making economic decision. The process of recording, aggregating and summarizing the effects of historical transactions in financial statements under a specified set of rules constitutes the bulk of financial accounting. Organizations such as commercial banks need the accounting information in carrying out their operations and transaction. Fortunately, the electronic computer as an electronic device for storing and analyzing information fed into it, for calculate or for controlling machinery automatically could be used to perform commercial banking products and operations and also aids managerial decision makers in planning and controlling of various business activities (Warren et al. 2017).

Accounting information is useful in all types of organizations especially the banking industry where the survival and growth of such organization depends to a large extent, on supplying effective accounting information to internal and external users. The size of an organization determines the appropriate volume and complexity of accounting information for managerial decisions in such areas as purchasing, protection, hiring, borrowing and investment. 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 level. It has proved so effective in the role that virtually no sizable organization can survive competitive pressures without using this tool called the computer. Throughout the 1970’s computer technology limited the production of accounting information to predetermined formats. The introduction of microcomputers in the early 1980’s brought about rapid rise in the computer at all levels of management and contributed to the development of a new class of programs aimed specifically at meeting the needs of strategic management. Donald H. Sanders in his book “Computer in Society” assets that “that scope of today’s accounting information system is influenced by the rapid growth of information processing technology and increased complexity of business in general. Thus, the accounting information of the foreseeable future must establish and maintain the capability for complex manipulation of vast volume of financial and non-financial data with higher speed and greater accuracy.

1.2 Statement of the Problem

The banking industry is one of the major contributors to the economic development of any nation in the world. However, the existing banking facilities in the country at this time cannot effectively cope with the requirements of modern banking” The above stated problems have further resulted to sub-problems of slow banking operation, slow storage and retrieval system, time wastage and reduced customers patronage. Therefore, it became very apparent and necessary for banks to search for a better method, which would seek to improve and speed up banking operations in the country.