CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

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 commonest 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 organization. The historical

development of computer started with Hollerith punched card of

1880Goerge Alken calculator and Charles Babbage’ creation of

the difference engine.

The computer can be defined as a tool or device which is

able to accept facts (data) and figure in a prescribed form apply

prescribed processes to data and supply result of the processes

in a specified format as a meaningful information. There are also

different types of information depending on the make or type of

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their functions. The revolution in technology to the computer

complements or in the other hand substitute for ten elements

which are: - paper personal memos charts reports calculators

terminals letter.

Hartzell (2006) defines computer as an electronic machine

for processing information automatically and very quickly. The

important of computers is the ability to handle vast amount of

information and to do other processes with accuracy and speed

which cannot be manually undertaken have been recognized and

appreciated by financial institutions hence the trend in the

computerized of banking operations.

Tanembaum (2010) sees computer as a machine that can

solve problems for people by carrying out instructions given to it.

The American Accounting Association defines accounting as the

process of identifying measuring and communicating economic

information to permit informed judgement and decision by users

of the information. Accounting is also the establishment

maintenance collection and analysis of financial position of an

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organization and any changes that have occurred or may occur

overtime.

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.

Accounting system is also defined as a consistent way of

organizing recording summarizing and reporting financial

transactions.

Computerization is the installation of computers as a part of a

process of automation.

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Banking in Nigeria has witness impressive development in

recent time particularly within the last decade in time with growth

in economic activities and complexities banking service have

expanded significantly in size and variety due to increased by

computerization of banks.

1.2 STATEMENT OF THE PROBLEM

In spite of the benefit of computer to banking industry and

business generally some problem are still left unsolved and new

ones have been credited by the use of computer itself problems

like;

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.

1.3 OBJECTIVES OF THE STUDY.

The objectives of this study are:-

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 To determine he relationship between the application of the

manual accounting system and the computerized accounting

system in the banking system.

 To find out whether the effect of computerized accounting

system enhances higher turnover (volume of operation) and

profitability in banks.

 To examine the impact of using computer to keep

accounting records.

1.4 RESEARCH QUESTIONS.

To be able to achieve the above purposes some questions

would be asked which help the researcher to gather the

necessary information needed they are:

 Are there any relationship between the manual accounting system

and the computerised accounting system in the banking industry?

 Also can computerized accounting system enhance high turnover

and profitability in banks?

 Finally What are the effects of using computers to keep

accounting records?

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1.5 HYPOTHESES OF THE STUDY

In order to ensure the verification and validation of the

primary data gathered through administration of questionnaires. A

research hypothesis is formed comprising the null hypothesis (Ho)

and the alternative hypothesis (Hi).

Hypothesis One

Ho: - There is no relationship between the application of the

Computer and manual system in the accounting system of

banking industry

Hi: - There is a relationship between the application of the

Computer and manual system in the accounting system of

the banking industry.

Hypothesis Two

Ho:- The impact of computerized accounting system does not

enhance higher turnover and profitability in banks.

Hi:- The impact of computerized accounting system enhances

higher turnover and profitability in banks.

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Hypothesis Three

Ho:- There is no effect of using computer to keep accounting

records.

Hi:- There is an effect of using computer to keep accounting

records.

1.6 SIGNIFICANCE OF THE STUDY.

Most banks have growth and continuity as part of their

objective and such objectives are best realized by an efficient

management as well as effective computerized accounting

system. This has made it possible for banks to gain inherent

advantage while minimizing risks involved in their daily

operations.

This research project will therefore be of immense

advantage or benefit to the management of banks computers and

other business organization using computerized accounting

system. Hence the theories and concept contained therein can

be infused into their management system.

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This research will also contribute to enhance efficiency in

the following ways;

a) Speedy and accurate decision making through the use of

computerized accounting system.

b) Improvement in the delivery and quality service.

c) The banks profitability will be improve.

Firstly in the realm of academic the project will be very

useful to wide audience as it applies to courses in accountancy

banking and finance as well as executive development courses

management seminars and supervisory workshop conducted in

colleges and universities.

1.7 SCOPE AND LIMITATIONS OF THE STUDY.

The scope of the study is restricted to examining the effect

of computerized accounting system on the performance of

banking industries such as Diamond bank plc Eco bank plc and

First bank plc all in Enugu metropolics of Enugu state.

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1.8 DEFINITION OF TERMS

AUDIT TRIAL:- a technique that made it possible to retrace

processing of data in all other to charge add or delete records in

a file.

BLOCKING:- the storage of more than one term in a record.

COMPLIER:- a programming system applied by a manufacturer

to convert a programme written in an automatic language into

machine language.

EXPERT SYSTEM:- A computer system which embodies some of

the experienced and specialized knowledge of an expert. it

enables a non-expert to achieve comparable performance to an

extent in the field.

PPLICATION PACKAGES:- These are computer programmes

written for the purpose of carrying out specific task for individuals

or organizations with similar or related needs.

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