Computerized Accounting Systems And The Financial Performance Of Financial Institutions In Uganda A Case Study Of Centinary Rural Development Bank Uganda Limited

ABSTRACT

The research established the relationship between computerized accounting systems

and the financial performance of financial institutions in Uganda. The study was guided

by the following objectives: 1) To establish the level of adoption of computerized

accounting system; 2) To establish level of financial performance among financial

institutions and 3) To establish whether there is a significant relationship between

computerized accounting systems and the financial performance of financial institutions.

This study employed a case study because the researcher was more interested in a

deeper understanding of the problem rather than generalizing the findings across the

entire population. For the purpose of obtaining the objectives of the study, various

designs were used as follows; the research used qualitative and descriptive research

design to conduct the study because the findings of the study were non-numerical. A

sample size of 50 respondents was got using Cronbach's formula. Both questionnaires

and interviews were used to solicit for data from respondents who were randomly

selected to participate in the study and the data collected was organized and analyzed

to generate information which was treated with utmost confidentiality and strictly for

academic purpose. Content validity index (CVI) method was used to establish the

validity of all the designed questionnaires. The study made the following findings; age

distribution had 71.43% of the respondents between 25-46 years. Education level had

degree holders as the majority with 40% of the total respondents; the research also

found out that the bank uses mostly computerized accounting to perform its operations

since 88.7% of the total respondents agreed that the bank uses computerized

accounting, this implied that the bank was a relevant case study with regards to the

topic of study. On performance, 85% of the customers had their expectations met by

the bank, this was interpreted as satisfactory. The study strongly recommends that

financial institutions in Uganda that are yet to adopt computerized accounting systems

should do a more thorough cost benefit analysis before venturing into this business of

computerization in order to be aware of the benefit beforehand. This will help them to

know whether it will be profitable to go into it or maintain the existing manual banking

system. In order to avoid loss of data and information, there should also be standby

computers and other related facilities as well as other software backups that can be

used in times of an urgent need for such replacement. It is also recommended that

financial institutions hire highly trained experts in the field of information technology to

manage any unforeseen contingencies that can disrupt the smooth flow of the banking

activities. Such future eventualities can be frequent power failure, which can create

software problems. The research also recommends that further research should be

done to find out the extent to which rural financial institutions in Uganda are linked to

the Inter banking payment system amongst both the rural and the commercial banks at

large. Other studies can focus on how the emergence of Internet and mobile banking in the country is helping the customers.