Study of Computerized Sytem at

Corporate Banking

Study of computerized sytem at corporate banking Page 1

 INTRODUCTION

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1.INTRODUCTION:

The research topic of this study is “The Effect of Computerized Accounting System on Ghanaian
banks – a case study of the Ga rural bank. The purpose is to know whether the application of
Computerized Accounting System supersedes that of manual Accounting System and that if
computerized Accounting System enhances higher turnover and profitability, and also whether a
computerized accounting system is an effective means of keeping accounting records. The study's
population is 70 persons who are the members of staffs of the three (3) selected branches of the
Ga rural bank. Using the Taro Yamane‟s formula the sample size calculated gave (60). The
formulated hypotheses were tested using the analysis of variance (ANOVA) statistical technique
at 5% level of significance. The researcher also made use of primary methods of data collection
which included questionnaire and personal interview. Also the secondary method of data collection
used was gotten from official documents of the banks, websites, various research works on
computerized accounting system, accounting journals and textbooks.

The research concluded that the advantages of a Computerized Accounting System far outweigh
its associated challenges as it has impacted the financial reporting of the banks positively. Hence,
there is the need for businesses, particularly rural banks to adopt a Computerized Accounting
System. Based on these, the researcher recommended that the Ga rural bank should channel most
of their resources in the training and development of bankers and Accountants personnel in
computerized accounting system related technology such as I.C.T to boost performance in their
banking operations and their personnel. Also due to the widespread of computer trends and its
dynamics nature, it is recommended that rural banks who are still battling with manual system
should adopt specifically the Computerized Accounting System.

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1.2 Synopsis of Project:

Today‟s modern technology brought into use the computer, this technology is the application of
science to gathering, recording, processing and communicating of business information by means
of electronic media. Most common tool for application is the computer and it involves all the
transaction processing system management information system various business support system
etc. The computer is a central force in the advancement of various organizations. Omolehinwe
(2009) defines accounting as the collection and recording of financial data about an organization
whether in the private or in the public sector and analyzing the data so collected to suit the decision
that needs to be taken and reporting the relevant information in a summary form to the user in a
form that is meaningful to him or her. Chionye (2003) defines accounting system as the art of
identifying, recording, classifying measuring and interpreting in a significant manner the financial
transaction of an organization for decision making. Summarizing from time to time the information
contained in the record, for its significant presentation and interpretation to interested parties as an
aid to decision making..

The primary objective of an accounting function in an organisation is to process financial

information about the activities of the organisation and prepare financial statements at the end of
the accounting period. The modern method of accounting is based on the system created by an
Italian monk FraLucaPacioli. He developed this system over 500years ago. This great and
scientific system was so well designed that even modern accounting principles are based on it
(deSantis, 2010). Section 123 of Ghana‟s Companies Code (1963), Act179 obliges all companies
to keep proper books of accounts with respect to their financial positions and changes therein.
These books shall be kept in respect of all sums of money received and expended by, or on behalf
of the company and the matters in respect of which the receipt and expenditure takes place; all
sales and purchases by the company of property, goods and services; the assets and liabilities of
the company and the interests of the members therein. According to ISAB Framework for
preparation and presentation of financial statement, the objective of financial statements is to
provide information about the financial position, financial performance and changes in financial

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position of a company that is useful to a wide range of users in making economic decisions. These
financial statements are usually directed towards the common information needs of these users and
as a result, it serves as their major source of financial information. Users of these financial
statements include shareholders, prospective investors, employees, customers and government.
The act of communicating financial information to these users is known as financial reporting.
Financial Reporting can be defined as the process of presenting financial data about a company‟s
financial position, the company‟s operating performance, and its flow of funds (Rose & Hudgins,
2008).

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1.1.1. Statement of Problem

The advancements in information technology have eventually led to the introduction of

Computerised

Accounting Systems in corporate reporting to help produce relevant and faithful representative

financial reports for both management and external users for decision making (Greuning, 2006).
The

many advantages from the use of these systems have led many to conclude that Computerised

Accounting Systems in Corporate Reporting is the „engine of growth‟ in business organisations

(Frenzel, 2006).

In spite of the benefit of computer to the banking industry and businesses in general, some
problems

are still left unsolved and new ones have been credited by the use of computer itself being a
problem

such as the use of computer to keep accounting records.

Another problem is the displacement of labour hands in the accounting department and its union

implication and the problem of low turnover (volume of operation) and profitability in banks.

Objectives of the Study

The major purpose of this study is to examine how the adoption of information technology
affects the

performance of commercial banks in Ghana, focusing on Access bank Ghana Ltd.

The specific objectives therefore are:

i. To determine the relationship between the application of the manual accounting system and the

computerized accounting system in the banking system.

ii. To determine the effects of computerized accounting system on the profitability of the Ga
rural

bank.

iii. To examine the impact of using computer to keep accounting records

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Research Question

In order to address the research problem, the following questions would be administered:

i. Are there any relationship between the manual accounting system and the computerized

accounting system in the banking industry?

ii. Also, to what extent does the application of computerized accounting system impacted on the

profitability of the Ga rural bank?

iii. Finally, what are the effects of using computers to keep accounting records?

Scope of Study

The focus of this study shall cover the role computerized accounting system play on the performance

of commercial banks in Ghana, focusing on three branches of the Ga rural bank. The study lasted for a

period of three months.

Significance of Study

In the light of the stated objectives which this study is set to achieve, the following represent the

significance of the study;

1. It will highlight on the relationship between the application of manual accounting system and
the

computerized accounting system in the banking system.

2. It will prove the success and growth associated with the adoption of computerized accounting

system in banking.

3. It would also be a resource material for students, academic institutions, and individuals that
want to

know more about the impact and relevance of information technology in Ghanaian banking
sector.

Limitation of the Study

The main constraint of the study is the limited time; the specified time for the study is not
adequate

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for a thorough research. Also, the problem of finance for printing of materials and cost of
internet

access for data.

Organisation of the Study

This study is organized into five distinct chapters. Chapter one (1) introduces the study by
looking at

the background through to the significance of the study and its limitations. Chapter two (2) deals
with

a critical analysis of prior related literature, however, chapter three (3) looks at the methodology
of the

research under study. Chapter four (4) deals with the presentation of the findings and the analysis
of

the data collected. Finally, chapter five (5) deals with the summary, conclusion &
recommendations

REVIEW OF RELATED LITERATURE

Introduction In an evolving Ghanaian banking industry, strategies are being adopted by the
major players in order to achieve their long-term organizational goals- profitability and survival.
In the light of this belief, much emphasis is being laid on the computerization of their banking
operations. Within the last decade, the Ghanaian banking industry has been at the forefront of
computerization. This is with the aim of: improving their information system, delivery of
efficient and high quality service to their customers. In the advent of computerization, old
generation (local) banks in the industry are force to wake up from their slumbers and face reality.
The new generation banks come into the industry with innovation, research and development, in
order to push these less competent old ones out of business. This revolution can only be aided by
computerization. It‟s very pertinent to state that computerization is a very powerful weapon
which can be employed to annihilate competitors. The Ghanaian banking industry ensures that
their data base is updated as at when due. According to Rob Kling (1996), “when a specialist
discusses computerization and work, they often appeal to a strong implicit image about the
transformation of work in the last one hundred years and the role that technology has played in
some of these changes.” In view of this, it‟s quite imperative to analyze this information with the
Nigerian banking industry, and to take actions aimed at guiding against the problems associated
with computerization. The use of Accounting Information Systems (AIS) is a widely researched
topic. While there is much research on the impact of Accounting Information Systems (AIS) in
general; there is little research specifically on Computerised Accounting System (CAS) and its
impact on financial reporting. Computerized Accounting Systems (CAS), however, is widely

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used in many corporate bodies including SMEs. For example, in Australia, the Yellow Pages
(1997) reported that 76% of the small businesses surveyed had at least one computer and 75% of
these used accounting software. Burgess(1997) in his view of IT adoption by Australian small
businesses concluded that the main software application package used was accounting (Burgess
1997 and Wenzler 1996).To investigate the impact of Computerized Accounting Systems(CAS)
on financial reporting, it would be reasonable to first review the more comprehensive literature
on CAS and financial reporting. This literature review, therefore, begins with a discussion of the
brief history of accounting, manual accounting systems and then review studies specifically
focused on Computerized Accounting Systems and financial reporting. It will also take into
account the history and financial reporting requirement of rural bank

Accounting
Accounting is not only the oldest but also the most stable of the management disciplines. In spite of its
stability and continuity, accounting has seen major changes during the past century. It would be surprising
if a century from now, accounting is the same as today. Although we cannot look so far ahead, we can
analyze the current conditions for clues about what to expect in the next decade or two (Sunder1999).
Accounting provides financial information about a business or a not-for-profit organisation. Owners,
managers, investors and other interested parties need financial information for decision making. Financial
accounting is the art of systematically identifying, measuring, recording, classifying and summarizing in a
significant manner and in terms of money, transactions and events which are, in part at least, of financial
nature, and communicating, analyzing and interpreting the results there of (Woode & Sangster, 2008).

Role/Functions of Accounting
According to Sunder (1997)a business organization can be seen as a set of contracts among
various participants: employees, shareholders, customers, vendors, managers, creditors, auditors,
government, among others. Each party in the contract agrees to contribute resources. For
example, employees and managers contribute skills, shareholders and creditors contribute
capital, vendors provide machinery and materials, and customers provide cash. Each participant
demands an inducement at least as large as the opportunity value of his contribution to the
organization. For an organization to succeed, its production technology and set of contracts must
satisfy each one of its participants. If he can get more elsewhere, he will quit the organization. If
enough people quit, the organization collapses. They therefore argued that, accounting is
necessary to assemble, implement, enforce, modify, and maintain the contract set of
organization. Accounting therefore plays five main functions in an organization. The first
requirement of control is to devise a system of measuring the contributions made by each agent.
It should also determine the amount of incentive due them, and monitor the distribution of
inducements so that each agent receives his due, no more and no less. In addition, accounting
helps compare the contributions made and the incentives received by each participant and
distributing this information. Furthermore, accounting distributes information to various factor

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markets to keep them liquid and find replacements for participants who leave. Finally,
accounting makes some information available in the form of common knowledge or public
disclosure to help reduce conflict among participants at the time they re-negotiate their contracts
(Sunder1997). In its second function, the accounting system measures, records, and controls the
outflow of resources from the organization. Payroll and benefit accounts for employees, shipping
to customers, accounts payable to suppliers, and tax accounts measure the out flow of resources
to the government (Sunder1997). In its third function, the accounting system compares the data
on resource inflows and outflows to determine who has fulfilled his contract and to what degree.
The accounting system prepares comparative reports on resource inflows and outflows related to
various individuals in the organization. These statements are used to evaluate and adjust the
contracts of these individuals (Sunder1997). In a fourth function, accounting helps assemble and
maintain the contract set by finding the appropriate participants in the factor markets for labour,
managers, customers, suppliers, and investors among others. All these people must be convinced
that participating in such an enterprise is in their own best interests. Proforma financial
statements, business plans, and budgets prepared by the organization before the enterprise starts
functioning help agents assess the costs and benefits of participating in the proposed enterprise in
various roles. When contractual slots fall vacant, they must be filled from the factor markets
(Sunder1997). Finally, when contract terms expire, they are often re-negotiated under changed
circumstances. Agents are tempted to issue threats, to quit their position in the organization if
their terms were not revised in their favour. Such bluff sand threats sometimes lead to deadlock
in negotiations, strikes, and therefore dead weight losses to society. Accounting performs its fifth
function by sharing at least a minimal set of information among the negotiating parties to make it
common knowledge, and help reduce the chances of breakdown. This is the primary purpose of
public disclosure in larger organizations (Sunder 1997). Conclusively, an organization can be
seen as a set of contracts or alliances among many people who join them with the expectation of
gain. Accounting, therefore, is the mechanism that defines implements, enforces, modifies, and
maintains this system of contract.

What is Accounting System?

Hussey (2005) defines accounting system as the system designed to record the accounting
transaction and events of a business and account for them in a way that complies with its policies
and procedures. Hartzell (2006) says that accounting system is a consistent way of organizing,
recording, summarizing and reporting financial transactions. The minimum requirements for an
accounting system include the following; It must provide financial information for management
to make policy decisions, prepare budgets and grant proposals and provide other. Useful
financial reports, also, similar transitions must receive consistent accounting treatment. Ama
(2004) defines the accounting system as “a formal system for identifying, measuring,
accumulating, analyzing, preparing, interpreting and communicating accounting information
about a particular entity to a particular group”. By formal system, we mean that the accounting
system carries out its functions with laid down rules, regulations, methods, procedures and

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techniques. It is also a routine and an automatic system. An accounting system as opined by Ama
(2001) is a formal mechanism for gathering, organizing and communicating information about
an organization‟s activities. An accounting system can also be defined as mechanism for
gathering and communicating data for the ends of assisting and co-ordinating collective decision
in view of the overall objective of a firm or an organization. Accounting system by definition is a
financial information system which includes accounting terms, records instruction manuals flow
charts programs, and reports to fit the particular needs of the business. Accounting system is a set
of records, procedures and equipment that routinely deals with the events affecting the financial
performance and position of the organization. Finally, according to business online dictionary, a
system is an organized set of manual and computerized accounting methods procedures and
control established together, record, classify, analyze, summarized interpret and present accurate
and timely financial data for management decisions.

Methods for Computerization in Accounting

The two main method of computerization in accounting which dictate how the company‟s
transactions are recorded in the company‟s financial books are cash basic accounting and accrual
basis accounting.

Cash – Basis Accounting

Ama (2003), states that cash basis of accounting revenue is recognized and recorded only when
the cash is received. Expenses are recognized in the period when payment is made. Recording of
revenue and expenses during an accounting period is based on an inflow and outflow of cash. A
matching of cash receipts and cash disbursement is done to determine operating results during
the period. This method is simple in application. Rao (2006) defines cash basis as a basis of
accounting by which a transaction is recognized only if cash is received or paid. Cash basis of
accounting is suitable for such business organizations which operate for a short-term duration.

Accrual – Basis Accounting

The accrual basis of accounting is based on the principle that all revenue earned during a period
and the related incurred expenses of earnings that revenue assignable to the period must be
determined. These then are matched against each other to determine net income or net loss.
Revenue is recognized at a time of sales of services or merchandise and expenses are usually
recognized at the time the service are received and used in the production of revenue. Rao (2006)
defines accrual basis as a system of classifying and summarizing transactions into assets,
liabilities, capital, cost and resources and recording thereof. A transaction is recognized when
either a liability or asset is created or impaired. Whether payment is made or received is
immaterial in accrued basis accounting. The following are the essential features of accrual basis:

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 1.Revenue is recognized as it is earned.

2.Costs are matched either against revenues so recognized or against the relevantime period
to determine periodic income.

Costs which are not charged to income are carried forward and are kept under continuous review.
Any cost that appears to have lost its utility or its power to generate future revenue is written off
as a loss.

Types of Accounting System

Generally, there are two major types of Accounting System;

1. Manual Accounting system and

2. Computerized Accounting System

Manual Accounting system

According to Ama (2004), this is a system, which uses special journals to stream line the
journalizing

and posting procedures. To handle a large volume of transaction rapidly and effectively, it is
helpful

to group the transactions into classes and to use a specialized journal for each. Recording and
posting

are made for these journals using the double entry record keeping.

Also according to free online Marrian, manual system is a system in which the accountant or the

book-keeper is required to post business transactions to the general journal, general ledger and

worksheet by hand. This process can be computed by either using actual paper journal and ledger

sheets or by creating these sheets in a computer program such as excel it is considered manual

because each transactions is entered into the systems individually

Computerised Accounting System

Ama (2004) defines this system as a system that uses specialized machines called calculators and
computer in gathering information. It is technically known as Electronic Data Processing (EDP)
Accounting System. A computer – based accounting system processes data in basically the same
manner as does a manual system. Transactions are initially recorded manually on sources
documents, the data from these source documents are then key – punched into punched cards,
which can be read by the computer. The computer process the information and performs such

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routine tasks as printing journals, posting to ledger accounts, determining account balances and
printing financial statements and other reports. A computerized accounting system according free
online Merriam is system which allows the user to enter the transaction into the program once
and all accounts are updates as necessary.

Principles of Computerized Accounting Systems

In the course of recording, classifying and summarizing financial data, there may arise cases
where the exercise of discretion becomes very essential. Some practical principles have been
developed to help accountants in the exercise of such judgments, the four basic principles of
accounting are important because they provide the conceptual guidelines for application of the
basic accounting system. Also they give the measurement, recording and reporting phases of the
accounting information processing cycle. They include: i. Historical Cost Principles ii. Revenue
Recognition Principles iii.Matching principles iv. Full-disclosure principles

Historical Cost principles

According to GAAP, this principle requires companies to account and report based on
acquisition cost rather than fair market value for most assets and liabilities. This principles
provides information that is reliable (removing opportunity biased market values) but not very
relevant. According to Bhorkar (2005), states that historical cost principle in account usually past
happenings is recorded. This is based on assumption of realizations. Accounting involves
recording of business transactions which have taken place. The business transactions are
recorded as and when they take place i.e date – wise. This lead to the preparation of the historical
records of all transactions. Ama (2004) states that the principle defines the conceptual basis for
measuring the assets, liabilities and owner‟s equity (including revenues and expenses) of a
business, the cost principle states that the cash equivalent cost should be used for recognizing
(i.e, recording) all financial statement elements. Cost is measured as the cash paid plus the
current value of all non-cash consideration.

Revenue Recognition Principles

Ama (2004) states that the revenue principle relates to the income statement model (Revenue minus –
Expenses = Income). This principle specifies when revenue should be recognized (ie recorded) and how it
should be measured. Revenue should be recognized when there is an inflow of net assets from the sale of
goods or services. Revenue is measured as the cash received plus the current Naira value of all non-cash
considerations received. This principle requires companies to record when revenue is: i. realized or
realizable and ii. earned not when cash is received This way of accounting is called accrual basis
accounting.

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Matching Principles

In this principle, expenses have to be matched with revenues as long as it is reasonable to do so.
Expenses are recognized not when the work is performed or when a product actually makes its
contribution to revenue.

According to Bhorkar (2005), states that matching principles explains that we have to match the income
of a certain period with expenses of that period only. The term matching refers to close relationship that
exists between certain expired cost and revenues realized as result of incurring those costs.

Ama (2004) states that this principle relates directly to the income statement (Revenue – Expenses =
income). Resources that are used to earn revenues are called expenses. The matching principle holds that
when the accounting period revenues are properly recognized in conformity with the revenue principle,
all of the expenses incurred in earning those revenues must be matched with the revenue of that period.

Full-Disclosure Principles

Bhorkar (2005) states that entries are made in such a way so that they provide honestly all information
relating to the activities of the business, the records should not conceal anything from outsides this
implies that accounts must be honestly prepared and all material information must be disclosed there in.
Information disclosed should also be enough to make a judgment while keeping costs reasonable. Ama
(2004) states that the periodic financial statements of a business must clearly report (ie. disclose) every
relevant information about the economic affairs of a business. This principle requires (a) Complete
Financial Statement. (b) Notes on the financial statements to elaborate on the “numbers”.

What is Computer and Computer Trends?

Computer

Tanenbaum (2010) defines computer as an electronic device for storing and processing data, typically in
binary form, according to instruments given to it in a variable program. According to O‟Leary (2001)
computers are electronic devices that can follow instructions to accept input, process that input, and
produce information. Vermant and Shelly (2011) define computer as electronic device, operating under
the control of instructions stored in its own memory, that can accept data, process the data according to
specified rules, produce results and store the results for future use. Computers process data into
information. Data is a collection of unprocessed items, which can include text, numbers, images, audios
and videos. Information conveys meaning and is useful to people.

Computer Trends

According to Wikipedia, the free encyclopedia, computer trends are changes or evaluations in
the ways that computer are used which becomes widespread and integrated into popular thought
with regard to these system. These movements often begin with one or two companies adopting
or promoting a new technology which grabs the attention of others and becomes popular. Both
hardware and software can be part of computer trends such as the developments and proliferation
of mobile devices including smart phones and tablets changes in the internet, the developments

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of new websites, and the expansion of the cloud. Computing models are likely to be similar
software trends throughout the early part of the 21st century. Much like changing fashions in
clothing, computer trends indicate the types of technology or concepts that are popular at a given
time. This can occur in a number of ways including a company introducing new technology to a
market and computers finding that they can use certain products more effectively than others. As
changes happen computer trends typically evolve and grow over time, so that popular technology
one year may be considered out-dated the next. Identifying the next major trend and finding a
way to get in on it ahead of time can be substantially profitable for companies that work with
technology. Developments in interest coding and viewing continue to make its growth a major
trend in the computer industry.

Types and Why We Use Computer Systems

Types of Computers

Computers have revolutionized all types of industries they proved to be a boon to main kind. A
computer is one of the most brilliant inventions of main kind. Thanks for computers technology, we
were able to achieve strong and processing of huge amounts of data we could rest on basis by
employing computers memory capacities for storage of information.

According to the Wikipedia, the free encyclopedia states the different types of computers and are
categorized based on their operational, style of functioning based on the operational principle of
computers, they are categorized as analog, digital and hybrid computers. The classification of computer
based on their style of functioning following is a classification of the different types of computers based
on their sizes and processing powers.

1.Mainframe

2.Micro Computers

Some personal computers are: Desktop, Servers, Laptop, Super Computers, Notebook, Wearable
Computers, Minicomputers, Tablet, PDA.

Analog Computers

These are almost extinct today. These are different form of a digital computer because an analog
computer can perform several mathematical operations simultaneously. It uses continuous various for
mathematical operations and utilize mathematical or electrical energy.

Digital Computers

They use digital circuits and are designed to operate on two states namely bits 0 and 1. They are
analogous to states ON and OFF. Data on these computers are suitable for complex computation and
have higher processing speeds. They are programmable and either general or special purpose

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computers. Such as digital cameras. A digital camera is a device that allows users to take pictures and
stores the photographed images digitally, instead of on traditional film.

Hybrid Computers

These computers are a combination of both digital and analog computers. In this type of computer the
digital segments perform process control by conversion of analog signals to digital ones.

Mainframe Computers

According to Vermaat and Shelly (2011), a mainframe is a large, expensive powerful computer
that can handle hundreds or thousands of connected users simultaneously. Mainframes store
tremendous amounts of data, instructions and information. Most major corporations use
mainframe for business activities. With mainframes, enterprises are able to bill millions of
customers, prepare payroll for thousands of employees, and manage thousands of items in
inventory. One study reported that mainframe process more than 83 percent of transactions
around the world. According to O‟Leary (2011), mainframe computers occupy specially wired
air-conditioned rooms. Although not nearly as powerful as supercomputers mainframe
computers are capable of great processing speeds and data storage. For example, insurance
companies use mainframes to process information about millions of policy holders.

Micro Computers

Microcomputers are the least powerful, yet the most widely used and fastest growing type of

computer. They do not occupy space as much as mainframes do. When supplemented with a
keyboard

and mouse, microcomputers can also be called personal computers. A monitor, a keyboard and
other

similar input and output device, computer memory in the form of RAM and a power supply unit
come

packaged in a microcomputer. These can be fixed on desk or tables and prove to be the best
choice for

single – user‟s tasks. These are six types of micro computers; desktop, net book, notebook,
handheld,

tablet PC and media center computers.

Desktop Computers

According to O‟Leary (2011) are small enough to fit on top of or alongside a desk yet are too big
to

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carry around. A desktop is intended to be used on a single location. The space parts of a desktop

computer are readily available at relatively lower costs. Power consumption is not as critical as
that in

laptops. Desktops are widely popular for daily use in the work place and household.

Laptop / Notebook Computers

Also portable, light weight and fit into most briefcases. Laptops are similar in operation to
desktops,

laptops computers are miniaturized and optimized for mobile use. Laptops run on a single
buttery or

an external adapter that charges the computer battery. They are enabled with an in built keyboard

touch pad acting as a mouse and a liquid crystal display.

Net Books are smaller lighter and less expensive than notebook computers. They had a smaller

features set and lesser capacities in comparism to regular laptops at the time they came into the

market.

Handheld Computers

They are the smallest and are designed to fit into the palm of one hand. These systems contain an

entire computer system, including the electronic components secondary storage and input
and output

devices. Personal Digital Assistants (PDAs) and Smart phones are the most widely used
handheld

computers.

Personal Digital Assistance

According free online Marniam is a handheld computers and popularly known as a palmtop. It
has a

touch screen and a memory card for storage of data. PDAs can also be used as potable audio
players,

web browsers and smart phones.

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Media Centers blur the line between desktop computers and dedicated entertainment devices.
O‟Leary

(2011).

Mini Computers

O‟ Leary (2011) states that minicomputers are also known as midrange computers are
refrigerator –

sized machines. Medium – sized companies or departments of large companies typically use
them for

specific purpose. For example, product departments use minicomputers to monitor certain

manufacturing processes and assemble – line operations.

Servers

They are computers designed to provide services to client machines in a computer network. They

have larger storage capacities and powerful processors. Running on them are programmes that
serve

client request and locate resources, like memory and time to client machine usually they are very
large

in size to be fail safe & resistant to crash.

Tanenbaum (2010) states that beefed – up personal computers or workstations are often used as

network servers, both for local areas networks (typically within a single company), and for the

internet. Theses come in single – processor and multiple – processor configurations have
gigabytes of

memory, hundreds of gigabytes of hard disk space and high – speed networking capability. Some
of

them can handle thousands of transactions per second. Architecturally, however a single –
processor

server is not really very different from a single – processor personal computer. It is just faster
bigger,

has more disk space and possibly a faster network connection.

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Supercomputers are the most powerful type of computer. Theses machines are special high –
capacity

computers used by very large organizations. IBM‟s Blue Gene is one of the fastest computers in
the

world. The highly calculations intensive task can be effectively performed by means of

supercomputers, Quantum physics, mechanics, Weather forecasting, Molecular theory are bests

studied by means of supercomputers.

Wearable Computer

A record setting step in the evolution of computers was the creation of wearable computers. They
can

be worn in the body and are often used in the study of behaviour modeling and human health.
Military

and health professionals have incorporated wearable computers into their daily routine as a past
of

such studies.

Uses of Computers

According to Wikipedia the free encyclopedia, computers are now being used extensively in
office

administration to perform the routine clerical work. Today, most large and medium sized

organizations are almost totally dependent on their computers. Routine uses of computers are
given

below:

i. Accounting, billing, inventory control system with MIS, CRM.

ii. Computers are extensively used in accounting and there are multitude of computer software
for

accounting MIS, CRM, HITECH financial accounting is one such software which has been

customized for users in many segments in business and services.

Study of computerized sytem at corporate banking Page 19

iii. Payroll and Personnel records: Payroll according was the first commercial area to become
widely

computerized. The calculation of wages or salaries involves a number of variables which relates

to the personal details of each employee such as gross pay or rate for the job, individual

deductions tax liabilities of the employees and so on.

iv. Stock control: The computer helps to exercise the type of stock control needed by the

organization. It up to dates the sales and purchases records determines optimum reorder levels
for

different items and prints out stock list when desired.

v. Sales Accounts Records: Programming can be done for any sales accounting system. The

computer will pin point defaulting debtors, determines the right limit for each debtors and

maintain stores ledger.

vi. Costing and Budgetary Control: Costing and Budgetary control can be affected through the

computer, the computer will pin point out the variations from the planned performance.

vii. Production Control: The computers also help greatly in planning and control. It is possible
that

scheduling of the work may become necessary due to break downs etc a new critical path may

have to be worked out. The computer helps the lay down this new critical path.

Accounting Packages

According to free Marriam online, accounting software programmes have greatly increased the

productivity of back offices for the past several decades. The type of accounting software
packages

used in businesses depends on the size of company operations, members of users and different

segments or departments in a company. Several options are available and may be customized for

business depending on how much they are willing to spend on the accounting software. Some of
the

accounting packages are:

Study of computerized sytem at corporate banking Page 20

1. Quicks Book:

Small businesses and sole proprietorship may use simple accounting software programs like
Quick

Books or basic computers programs like Microsoft word or Excel. These programs are in

expensive and often basis solutions for billing, paying vendors and recording sales.

Quick Books is an easy – To – use load – and – click style of software that allows individuals to

quickly set up their business by answering of few, ledgers and invoicing modules are provided
for

business owners to use in their daily operations.

2. Peach tree Accounting sage‟s software packages)

Mid-size software programs of more functionality for multiple users of business software.

Companies can select different models based on business size and the number of uses accessing

the software. While they are more expensive, the customization options help limit purchasing

unnecessary modules. Sage‟s software packages can be server – or – web – based allowing users
to

access company information from multiple locations.

3. ERPs (Enterprise Resources Systems)

Large companies with several operational department or multiple locations may use ERPs as
their

preferred accounting software packages ERPs, are fully. Customizable packages that can take

several weeks to fully implement in a company oracle, people soft, sage and SAP AG are the
most

common ERPs vendors.

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Application of Computer in Accounting System
According to Wikipedia the free encyclopedia, some applications of computer in accounting
system

are:

1. Word processor: Word processing is a software used in the preparation of types scripts, using

computing facilities for the storage and manipulation of text for e.g word processor has ability to

merge names and addresses with standard text so as to give impression that the letter is

personalized even in case of circular letter.

2. Data Base: It is simple collections of information (data) on a particular subject. Data base file

allows you to manipulate the data in desired form. So database allows us to work on facts and

figures to store and manipulates data in any desired way for e.g from the same basic information

trial balance is prepared, trading and profit and loss accounts may be prepared; list of debtors

creditors may be prepared, purchase and sales forecast may be made etc.

3. Spread sheet: This is one of the software programs which have increased the utility of
computers

for accounting purposes. Spreadsheet programs help you to draw vertical as well as horizontal

columns on a large sized paper. Each column‟s length and breadth can be adjusted according to

suitability.

Merits and Demerit of Computerized Accounting System and its Differences

with Manual Accounting System

Merits and Demerits of Computerized Accounting System

According to Vertmaat and Shelly (2011), society has reaped many benefits from using
computers. Both business and home users can make well – informed decisions because they have
instant access to information from anywhere in the world. Students another type of users, have
more tools to assist them in the learning process. Benefits from using computers are possible
because computers have the advantages of speed, reliability, consistency, storage and
communication.

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Speed: When data, instructions, and information flow along electronic circuits in a computer,
they travel at incredibly fast speeds. Many computers process millions or trillions of operations
in a single second. Processing involves computing (e.g., adding, subtracting), sorting (e.g,
alphabetizing) or gaining, displaying images, recording audio, playing music, and showing a
movie or video.

Reliability: The electronic components in modern computers are dependable and reliable they
rarely break of fail.

Consistency: Given the same input and processes, a computer will produce the same results –
consistently. A computing phrase – known as garbage in, garbage out – points out that the
accuracy of a computer‟s output depends on the accuracy of the input. For example, if you do
not use the flash on a digital camera when indoors, the resulting pictures that are displayed on the
computer screen may be unable because they are to dark.

Storage: A computer can transfer data quickly from storage to memory, process it, and then
store it

again for future use. Many computers store enormous amounts of data and make this data
available

for processing anytime it is needed.

Communications: most computers today can communicate with other computers, often
wirelessly.

Computers with this capability can share any of the few information processing cycle operations
–

input, process, output, and storage – with another computer or a use.

Demerits of Computerized Accounting System

Vermaat and Shelly (2011) states that some disadvantages of computers relates to health risks,
the

violation of privacy, public safety, the impact on the labor force, and the impact on the
environment.

Health Risks: Prolonged or improper computer use can lead to injuries or disorders of the hands,

wrists, elbows, eyes, neck and back. Computers users can protect themselves from these health
risks

through proper workplace design, good posture while at the computer, and appropriately spaced
work

Study of computerized sytem at corporate banking Page 23

breaks. Two behavioral health risks are computers addition occurs when someone becomes
obsessed

with using computers. Individuals suffering from technology overload fell distressed when
deprived

of computers and mobile devices.

Violation of Privacy: Nearly every life event is stored in a computer somewhere --- in medical

records credit reports, tax records, etc. In many instances, where personal and confidential
records

were not protected properly individuals have found their privacy violated and identities stolen.

Public Safety: Adults, teens and children around the world are using computers to share publicly

their photos, videos, journals, music and other personal information. Some of these unsuspecting,

innocent computer users have fallen victim to crimes committed by dangerous storage protect
yourself

and your dependents from these criminals by being cautious in e-mail messages and on wed –
sites for

example, do not share information that would allow others to identify or locate you and do not

disclose identification numbers, passwords or other personal security details.

Impact in Labor Force: Although computers have improved productivity in many ways and
created

an entire industry with hundreds of thousands of new job, the skills of millions of employees
have

been replaced by computers. Thus, it is crucial that workers keep their education up-to-date. A

separate impact on the labor force is that some companies are outsourcing jobs to foreign
countries

instead of keeping their homeland labor force employed.

Impact on Environment: Computer manufacturing processes and computer waste are depleting

materiel resources and polluting the environment. When computers are discarded in landfills,
they can

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release toxic materials and potentially dangerous levels of lead, mercury and flame retardants.

Difference between Computerized and Manual Accounting System

According to the free online Marriam, it has the following differences.

Speed: The main difference between manual and computerized system is speed. Accounting
software

processes data and creates reports much faster than manual system. Calculations are done

automatically in software programs, minimizing errors and increasing efficiency. Once data is
input

you can create reports literally by pressing a button in a computerized system.

Cost: Another difference between manual and computerized system is cost. Manual accounting
with

paper and pencil is much cheaper than a computerized system, which requires a machine and
software

include training and program maintenance. Expenses can add up fast with cost for printers,
paper, ink

and other suppliers.

Back-up: A third difference between manual and computerized system is the easy of backup of a

computerized system. All transactions can be saved and backed up in case of fire or other
mishap.

You cannot do this with paper records, unless you make copies of all pages – long and inefficient

process.

Problems and Controls of Computerised Accounting System

According to free online Marrian, the problems of computerized accounting system comes with
its

own set of problems such as the need to protect against data loss through power failure or views
and the danger of hackers stealing data. Computer fraud is also a concern for who has access to
the information particularly customer information. If there a security breach and data is stolen

Study of computerized sytem at corporate banking Page 25

management can be held personally liable for the loss of data has been correctly entered into the

system as a mistake in data entry can throw off a whole set of data.

Green computing involves reducing the electricity consumed and environmental waste generated

when using a computer. Strategies that support green computing include recycling, regulating

manufacturing process, extending the life of computers, and immediately donating or properly

disposing of replaced computers.

The Effect of Computerized Accounting System on the Performance of Banking Industry in

Ghana

Tanenbaum (2010) states that manual processing of accounting data is too slow, and labour
intensive

in the banking industry. The speed at which computers can get according data processed cannot
be

matched. Computerized accounting system provides a means for those firms to record, very high

volume of transaction with great speed and financial and prepare a wide range of detailed
financial

reports. Computerized accounting system affects strongly on the accounting work and on the

performance of banking industry the computers can handle the recording process able to spend
more

time analyzing, planning and controlling financial operations for management, this can provide a

greater amount of analytical information for use in decision making. Pandey (2007) adds that

management is also in a better position to monitor the financial performance of all segments of
the

organization because a computerized accounting system can produce a broad range of detailed
reports

at short interval.

This is highly important for the selected branches of the Ga Rural Bank used as a population in
this

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research because of their separate location. Thus, computerized systems avoid the time lost in

correcting common errors. Computerized accounting system provides management with current

accounting balance information since balance is posted as the transaction occur. This
computerized

accounting system provides management with current information to support decision making.

Organisational Profile of Ga Rural Bank

The mission of the Ga Rural bank is to mobilize idle funds and channel such funds through
provision

of loans and Overdrafts to finance the economic activities of Rural dwellers within their
catchment

area thereby improving the standard of living in the Rural area. Also, to deliver innovative
banking

solutions to meet the needs and aspirations thus empowering economically rural dwellers within
their

catchment area.

This idea was mooted by Messrs Archibald Amponsa and Mr. Robert Larmiayi Golightly both of
the

then Examinations Department, now Banking supervision Department of the Bank of Ghana in
the

early 1980's.

The bank believes in the following philosophies:

i. Quality and prompt service to small scale farmers, rural entrepreneurs and salaried workers.

ii. Promoting economic and infrastructural development of its area of operation.

iii. Development of professional skills and attitudes of its staff through training, seminars and

exposures to modern trends of banking.

The vision of the bank is to work with the Local Rural Community to become a first class rural
bank

Study of computerized sytem at corporate banking Page 27

in Ghana. The Bank operates both personal and corporate account. Their products includes:
Apex

link, Ga Fidespo, Treasure Bills, Fixed Deposits, Current Account, Savings Account, Loans and

Overdrafts, Microfinance Group Loans and Money Transfer (Western Union and MoneyGram).

The bank controls a customer base of over 300,000 with six (6) branches in Accra with its head
office

located at Amasaman.

METHODOLOGY
Introduction

The methodology of research is a conceptual field work on which the whole /conduct of research
is

based. Ozo and Odo (2007) define research as the systematic and scientific method of finding
solutions to

a problem. Research is a planned and systematic process of collecting, presenting, analyzing and

interpreting data for purpose of arriving at dependable solution to human problem. The

methodology for users on the various method and technique employed by the research in the
course

of collecting and analyzing data with the view of obtaining solutions to the problems.

This chapter seeks to discuss the population and sample size, the techniques used for sampling
and

data collection methods, the various data collection instruments as well as the procedures used in

measuring and analyzing the data. This chapter therefore seeks to describe how the whole
research

was conducted

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Research Design

Saunders and Philip (2012) states that research design is general plan of how you will go about

answering your research questions it will contain clear objectives derived from your research

questions specify the sources from which you intend to collect data, how you propose to collect
and

analyze them.

Ani and Ugwu (2007) adds that research design composes of series of prior decisions that take

together provide a master plan for executing a research project. They continues that it is the

specification of procedures for collecting and analyzing the data necessary to help solve the

problem at hand the researcher used survey research design for the study, which was employed

because of the research topic for this study.

The survey research design was adopted. It allows the collection of data about subjects that are

exclusively internal to the participant, such as attitudes, opinions, expectations and intentions,
and

data on these areas are important for the study. Furthermore, it is often obtained by using

questionnaires. These data are standardized allowing easy comparison.

Population

Ozo (2007) states that population is the totality of people or object being considered. For the

purpose of this study, the population size will be restricted to the staff of three selected branches
of

the Ga Rural Bank. The selected branches are:-

1. Achimota Branch

2. Kwabenya Branch

3. Taifa Branch

The population of the study was first divided into sub-population based on sections which
comprises

of;

Study of computerized sytem at corporate banking Page 29

i. Accounting / Audit

ii. Marketing

iii. Administrative

iv. Operation

After which the researcher systematically selected some staff in each sections depending on the

position of such staff in their department. The total number of staff was 70 (seventy) and they
form

the population size.

RESULTS AND DISCUSSIONS

Data Presentation and Analysis

Data presentation means the various ways of carrying the different forms of data obtained
through

various data collecting techniques to enable the researcher perform analysis and extract new
meaning

from it. This research is targeted at understanding in a comparative analysis the effect of

computerized accounting system on the performance of banking industry, data analyzed and
derived

by way of questionnaire administration are presented and analyze and so is done by statistical

calculations / computations as tool for hypothesis is analysis of variance (ANOVA) and

percentages.

At the end inferences and conclusions are arrived at based on the statistical calculations.

Presentation of Data

The study is the effect of computerized accounting system on the performance of banking
industry

with primary focus on selected branches of the Ga Rural Bank.

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