CHAPTER ONE

INTRODUCTION

1.1 Introduction

The introduction of accounting software into commercial banks operation has had positive and negative effects on the performance of these commercial banks. It has opened gates to more research if these effects are more of negative than positive or positive than negative. This essays will explore the overall use of accounting software and its effects on the performance on commercial banks in the case of Victoria Customs Co-Operative Credit Union (VCCCUL) LIMBE.

1.2 Background of the Study

Accounting software has become an internal part of all types of business. Nowadays accounting and financial management became the scientific tools in running the business where software programs help to manage finance more effectively. There are more than 150 well-identified software products around the world and most of them are targeted on large business. But the main stress must be made especially on small business as companies that size are most unprotected and cannot finance much in accounting program (Lesia Marushchak, 2021).

The use of Accounting Information System (AIS) in the banking sector will support these organisational processes, and expectedly influence its organisational performance. Its use in commercial banks is a development traceable to the growing IT revolution in developing countries generally ( Hamdan, 2013). Accounting Information System is a powerful tool to improve the efficiency and effectiveness of the reporting process ( Mahnaz Melanzeri, Ateffe Zarabi, 2013) as companies need to expand their information  level in certain conditions of competitive market.

An accounting system records, retains, and reproduces financial information relating to financial transactions flows and financial position. Financial transaction flows encompass primarily inflows on account of incomes and outflows on account of expenses. Elements of financial position including; property, money receive, or money spent, are assigned to one of the primary groups, that is assets, liabilities, and equity (Onaolapo A. A. – Rahamon, 2014).

In recent times, the business environment is constantly evolving due to the faster technological changes in manufacturing systems; advancement of information system (IS), growing market competition, growing expectation from the customers, and unprincipled manipulative actions conducted by companies. In this case the complexity and impulsiveness of business dynamics has confronted the significant role of Accounting Information System (AIS) as the key driver to the economic and business discourse, particularly due to its relationship with management effectiveness (Curtis, 1995).

Accounting software been used in operating transaction in commercial banks is as a result of the introduction of AIS in the sector which significantly stressed as an unavoidable tool in decision making process, strategic planning and financial monitoring ( Alrabic, 2014). Generally, commercial banks specially have been on the tread of maximizing the patent significance of AIS. AIS had been helpful in different roles in many administrative activities of the commercial bank. Examples are assessing financial position, performance, and monitoring the flow of cash and non-cash expenditures (Hamdan, 2013). Accounting takes a vital role in operating an organisation. Every business keeping track of financial information that relates to its business activity. Accounting process could either be simple, complex, others burdensome based on the applicability of principles (Accounting principles).

But as the business grows, acquires new customers, enters new markets and keeps pace with constant changes in information technology, companies need to maintain highly accurate and up-to-date accounting, inventory, and statutory records. With a substantial increase in the volume of accounting transactions and increase in exposure of information to errors due to complexity of these accounting systems, there was a need for a system which could store, and process the information data with speed, accuracy, and processing capacity. In order to meet the growing need for accuracy and up-to-date information accounting integrated with information technology by introducing accounting software to the world. (D.M.J. Wickramsainghe, RMMD Pemarathna, NHK Coonay, 2017).

In the other hand, organizational performance is a function of the financial performance, performance management, and accounting information system. Fitness will exit in the combination of strategy and AIS that contributes to financial performance (Zejac, Pearce, 1990). Performance measurement highlights the process of quantifying the efficiency and effectiveness of certain business actions which are considered to contribute tothe achievement of business goal (Chan Chan, Qi 2006)

1.3   Statement of the Problem

By using accounting information systems, organisations can enhance their performance. Existing literature in banking recognise the importance and relevance of accounting software for bank effective performance. The relationship between accounting software and company performance might be distinguished only in case when the software program is suitable for some special company features.

However, the stress is that, owners often buy simple accounting software with limited functional specification and do not get all possible results when it connects with other managerial systems. Current research has shown that, it is important for companies to make special investigation to find what type of accounting software is necessary and suitable for satisfaction of accounting and managerial needs.

This study is therefore aimed at addressing the choice of right selection of an accounting software program and implication on company performance. This will be done by giving answers to the following research questions;

1. Does accounting information system adoption really influence company performance?
2. Do commercial banks place importance to the choice of accounting software?

1.4     Research Questions

1.4.1Main Research Questions

Does the application of a given software have an effect on performance of commercial banks?

1.4.2Specific Research Questions

1. What are the various softwares used by commercial banks?
2. Does the use of different softwares have an effect on the performance of commercial banks?

1.5 Objective of the Study

1.5.1Main Objective

The main objective of the study is to assess the effectiveness of accounting softwares on performance of commercial banks in Cameroon.

1.5.2Specific Research Objective

The specific objectives include;

1. To assess whether commercial banks perform efficiently as a result of system in operation.
2. To assess the extent of reliability accounting software provide to commercial banks.

• To assess whether information provided from system software in operation best respond to banks needs.