Assessment of the Effectiveness and Efficiency of New Accounting Information System of Guagua Rural Bank (an Sme) Henson St., Angeles City

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This study aims to:

1. Examine if implementing the new AIS positively affect the profitability of GR Bank.

2. Determine if integrating AIS between the operations of management and Accounting department reduces cost regarding banking services.

3. Conclude if the application of this technology based services improve the internal control in banking.

4. Ascertain if AIS provide timely and convenient information.

5. Determine if the use of AIS require technical skills of clients and personnel in using a computer.

6. Determine the influence of software and hardware on the AIS efficiency in GR Bank.

- Significance of the Study

This study is beneficial to the researchers’ knowledge for it attempts to measure the effectiveness and efficiency of Accounting Information System (AIS). Moreover, it contributes to the banks in deciding if they should implement new and advanced AIS whether it is favorable to the internal control and transactions of the industry. This study will add value to the company by providing an understanding about the relationship of the use of AIS and profitability of the bank. This research may also encourage employee retention, allowing the organization to compete in the market for the best employees and good reputation to report more reliable and timely information not only to the organization but also to the clients. Clients also have benefit to this study as they could transact to any other branch The new accounting information system enables the transactions to make it easier to accomplish and the clients would save their time in going to their respective bank branches just for them to transact. This research paper could be beneficial to other stakeholders like investors, creditors and employees because the primary function of AIS of the selected bank will help to analyze the past, present and future economic events and status, and it produces the financial statements particularly income statement, balance sheet, owner’s equity statement and cash flow statement.

- Scope and Limitation of the Study

The study focuses on the Assessment of the Effectiveness and Efficiency of New Accounting Information System. This will determine the possible effects of using the new AIS in making financial reporting faster and easier and how it will affect in making company decisions.

The respondents of the study are limited only to the employees of Guagua Rural Bank Henson St., Angeles City using the system.

Also, this study will limit only on the effectiveness and efficiency of new accounting information system of banks and its advantages and disadvantages of using technology in storing financial data.

- Conceptual Framework

INPUT

Assessment of effectiveness and efficiency of new accounting information system of banks and its advantages and disadvantages of using technology in storing financial data.

PROCESS

Survey among the employees of Guagua Rural Bank Henson St., Angeles City who are using the system and will conduct a direct interview with the Branch head manager.

OUTPUT

The impact of using the new Accounting Information System and its advantages and disadvantages of using technology in storing financial data.

Research Paradigm

The study will use the Input Process Output model. As an input, the researchers will use the New Accounting Information System. To accomplish the study, the researchers will conduct a survey among the employees of Guagua Rural Bank Henson St., Angeles City who are using the system and will conduct a direct interview with the Branch head manager. As a result, the researchers will enable banks to judge the adequacy and effectiveness of thr New Accounting Information System and will able to figure out the advantages and disadvantages of using technology in storing financial data.

CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter covers the review of related literature and studies which are closely related to the present study, both foreign and local, and provided the researchers some background and information in determining the type of approach used for this study.

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 (Sunder 1999). Accounting provides financial information about a business or a not-for-profit organization. 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, analysing and interpreting the results there of (Woode & Sangster, 2008).

Borthick and Clark (1990) believe that accounting exists because it satisfies a need - primarily a need for information. In order to be relevant, accounting data must among others, be quick to respond to users’ (particularly the investors) needs. Generally, investors are not in a situation to directly access the performance of companies in which they intend to invest. They usually depend on financial reports prepared by the management of such organizations. Financial report is one of the best sources of accounting information about a company. Financial reporting is an essential part of disclosure and helps investor to discover investment opportunities. The primary purpose of financial statements is to provide information concerning the financial situation of the company, its operational results, any changes of control in the company and cash flow.

One of the method they used in recording their transactions in banks is what they called the “Manual system”, on where it is consist of a paper