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MAKERERE UNIVERSITY

COMPUTERISED DATA MANAGEMENT SYSTEM AND

FINANCIAL REPORTING IN COMMERCIAL BANKS.

CASE STUDY: DIAMOND TRUST BANK

BY:

NAKUYA JULIAN07/U/12328/EXT.

SUPERVISOR: MR KINTU ISMAIL.

A RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY

SCHOOL OF LONG LIFE LEARNING AND EXTERNAL STUDIES

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF A BACHELORS DEGREE OF

COMMERCE.

MAY 2011

DECLARATION

I Nakuya Julian, declare that this is my own original work and has not been presented to

any university for award of a degree.

Signature………………………………………………..

Date………………………………………………………

APPROVAL

This work entitled computerized data management system and financial reporting has

been submitted for examination with the approval of the university supervisor.

Name………………………………………………………

Signature……………………………………………………

Date………………………………………………………….

DEDICATION

I dedicate this piece of work to my dear parents Major Rogers Mwanjuzi and Miss

Nakate Emilly for their efforts done and also to my brother SSerwada Eddie.

ACKNOWLEDGEMENT

I would like to express my gratitude by acknowledging the unconditional and support

extended to me by my parents, Major Rogers Mwanjuzi and Miss Nakate Emily, Mr.

SSerwadda Eddie, my brothers and sisters and also my aunt Nakaseeta Claire, aunt

Nightingale for moral , material support and guidance extended to me to reach where I

am.

I would like to thank my supervisor Mr. Kintu Ismail for his advices and contributions

morally and academically in a special way towards the accomplishment of my work.

In a special, I thank all my close friends I have been with for these four years like

Nassiwa Janet, Kumbaine Agnes, Kwagala Suzzane, Naigaga Dinah, Busuulwa Joshua,

Patrick, Navis and lastly but not least Ssenyange Paul. May the good lord award you

abundantly.

Finally, thanks also goes to all those who supported me financially, spiritually, morally

during the course.

And above all Glory to God the almighty, may his name be praised forever

TABLE OF CONTENTS.

DECLARATION………………………………………………………………………i

APPROVAL…………………………………………………………………………..ii

DEDICATION………………………………………………………………………..iii

ACKNOWLEDMENT……………………………………………………………….iv

TABLE OF CONTENTS……………………………………………………………v

LIST OF TABLES…………………………………………………………………....vi

LIST OF CRONYMS……………………………………………………………….vii

LIST OF APPENDICIES……………………………………………………………viii

ABSTRACT………………………………………………………………………….x

CHAPTER ONE……………………………………………………………………..1

Introduction……………………………………………………………………….1

1.1 Background to the study…………………………………………………………..1

1.2 Statement of the problem…………………………………………………………3

1.3Purpose of the study……………………………………………………………….3

1.4 Objectives of the study…………………………………………………………...3

1.5 Research Questions………………………………………………………………….4

1.6 Scope of the study………………………………………………………………………4

1.6.1 Geographical scope………………………………………………………………….4

1.6.2 Conceptual scope………………………………………………….……………….4

1.6.3 Time scope…………………………………………………………….…………..4

1.7Significancy of the study………………………………………………….………….5

CHAPTERTWO…………………………………………………..…………………………. 6

1.0Introduction………………………………………………………………………………….6

2.1 Computerized data management system……………………………………………………6

2.1.1 Types of computerized data management systems………………………………………6

2.1.2 Functions of computerized data management systems………………………………….8

2.1.3 Comparison of computerized data management system and manual data management systems………………………………………………………………………………………..9

2.2FinancialReporting………………………………………………………………………...9

2.2.1Statement comprehensive income………………………………………………..10

2.2.2 Statement of financial position………………………………………………….10

2.2.3 Statement of cash flow…………………………………………………………..10

2.2.4 Qualities of financial reports…………………………………………………….11

2.3 The relationship between financial reporting and computerized data management

systems…………………………………………………………………………..13

2.4 Conclusion…………………………………………………………………………13

CHAPTER THREE……………………………………………………………………14

3.0 Introduction…………………………………………………………………………14

3.1 Research Design…………………………………………………………………….14

3.2 Population size……………………………………………………………………...14

3.4 Sources of data……………………………………………………………………...14

3.4.1 Primary Data……………………………………………………………………...14

3.4.2 Secondary data…………………………………………………………………...14

3.5 Data processing…………………………………………………………………….15

3.5.1 Coding…………………………………………………………………………....15

3.5.2 Editing………………………………………………………………………….15

3.6 Data summary and presentation………………………………………………….15

3.7 Data analysis……………………………………………………………………..16

CHAPTER FOUR…………………………………………………………………….17

4.0 Introduction…………………………………………………………………………17

4.1 Findings on general information…………………………………………………….17

4.1.1 Gender of the respondents………………………………………...........................17

4.1.2 Educational back ground………………………………………………........................18

4.1.3 Number of years in service………………………………………………….........19

4.1.4 Preferred system in the organization……………………………………..............19

4.2 The effectiveness of computerized data management systems………….................

20

4.2.1 Existence of manual data management system……………..……………………

20

4.2.2 Soft ware used…………………………………………………………………....

21

4.2.3computerised data management system leads to prudent decision making and thus

achieving organizational

goals………………………………………………………..................... 22

4.3 Financial Reporting……………………………………….………………………..

23

4.3.1Data management standards and financial reports…………………………..........

23

4.3.2 The accuracy, reliability and timeliness of financial reports…………….............

24

4.3.3 Checking updates on data management system. …………………………..........

24

4.3.4. Sources of capturing data. ……………………………………………...............

25

4.4 The relationship between computerized data management system and

Financial reporting…………………………………………………………………..

26

CHAPTER FIVE……………………………………………………………………...

29

5.0 Introduction…………………………………………………………………………

29

5.1 Discussion of the findings…………………………………………………………..

29

5.2 Summary of the findings…………………………………………………………..

30

5.2.2 The effectiveness of computerized data mgt system………………………………

30

5.2.2 Production of financial reports…………………………………………………….

30

5.2.3 The relationship between computerized data mgt and financial reporting………..

31

5.3 Conclusions…………………………………………………………………………..

31

5.3.1 The effectiveness of computerize data mgt systems……………………………….

31

5.3.2 Financial reports prepared in DTB………………………………………………….

31

5.3.3 Relationship between computerized data management system and financial reporting……..

31

5.4Recommendations……………………………………………………………………….

.32

5.5 Areas of further

research………………………………………………………………………..32

REFERENCES…………………………………………………………………………....

33

Appendix 1 : An introductory

letter……………………………………………………….34

Appendix 2: questionnaire.

LIST OF TABLES.

Table; 1 Gender of

respondents………………………………………………………………17

Table2; Educational back

ground……………………………………………………………..18

Table 3; Numbers of worked with

DTB………………………………………………………19

Table 4; system preferred to be used……………………………….

…………………………18

Table 5; manual data management system……………………………………………...….

..20

Table 6; Appropriateness of soft ware used………………………………………………..

..21

Table 7; Data management system and decision making…………………………………..

.21

Table 8; Data management and financial reporting……………………………………….

22

Table 9; The quality of financial reports……………………………………………………

23

Table 10; Data updates………………………………………..…………………………….

24

Table 11; sources of data…………………………………………………………………

24

Table X………………………………………………………………………………….

25

Table Y……………………………………………………………………………………

26

LIST OF ACRONYMS

Diamond Trust Bank (DTB).

Data Base management System (DBMS).

Management (mgt)

Computerized Data management systems(CDMS)

ABSTRACT

The researcher established the relationship between Computerized Data Base

Management System and financial reporting with reference to DTB where an attempt was

made to examine whether the computerized data management system had an impact on

financial reporting.

The objectives of the study were; to evaluate the effectiveness of computerized data

management system in DTB, Examination of financial reports prepared and to establish a

relation between computerized data management system and financial reporting.

The researcher applied both qualitative and quantitative methods to collect data with a

case study of DTB Bank. Both descriptive and analytical research designs were used to

collect data from respondents. And also the cross sectional research design was used to

find a relationship between the two variables.

Both primary and secondary data sources were used in the study. The study revealed that

CDBMS had enhanced the ease of storage retrieve of the information needed.

The researcher found the following findings from the study; computerization of data in

DTB has improved their ease with information storage and retrieval when needed, the

study revealed that DTB applies internal controls in the form of budgets to enhance their

reliability. It also does have an aggressive data management system policy when it comes

to review and change of data management policies, and also the findings show that the

relationship between computerized data management system and financial reporting is

very strong meaning the two variables go hand in hand.

The researcher concluded that the bank adopted an enhancement in their information

needs by computerizing their data management systems and the results showed that the

preparation of financial reports 99% depends on the existence of computerized data

management system, therefore the system should be kept in a good working condition to

get good reports.

The researcher recommends the bank to always update its computerized data

management systems regularly so as to get financial reports which are accurate, reliable

and timely. And also focus on other factors in the preparation of financial reports.

CHAPTER ONE.

1.0 INTRODUCTION.

It demonstrates the back ground to the study, the problem under investigation, the

purpose of the study, the research objectives and questions used, the scope and the

significance of the study.

1.1 BACKGROUND.

Computerized Data Management system in banks (DTB) entails the use of computers to

handle large volumes of data with speed, accuracy and efficiency aimed reducing the

manual data management systems to produce qualitative reports which are useful in

planning, controlling, and making decisions at large.

Data management system is a set of computer programs that controls the creation,

maintenance, and the use of a database. A Data Base Management System is a system

software package that helps the use of integrated collection of data records and files

known as databases. It allows different user application programs to easily access the

same database. (Addison Wesley, 2003).

Financial reports are very essential resources in communicating information to the

management. It is therefore, important that these reports are handled carefully to ensure

quality in them (Susan lavier, 1998). Quality financial reports can effectively and

efficiently be produced by a computerized data management system and this makes it a

sole reason as to why banks (DTB) have adopted the use of computers in order to fasten

their work.

This is so because the traditional /manual data mgt system was found to be tiresome,

stressing, tedious and too slow when dealing with too many customers and also the

accuracy with such information availed was found to be insufficient.

Computerized data management system should be beneficial to the institution. This can

be possible if the mgt introduces the idea computer literacy in employees from the

operation level up to the strategic level where decisions are carried out. All records

should be in the data base with restrictions to retrieve it only to authorized users.

Financial reporting is presenting financial data of a company's position, operating

performance, and funds flow for an accounting period. Financial statements along with

related information may be contained in various forms for external party use such as in

the annual report and prospectus.

Although DBT is almost fully computerized, implying that financial reporting is expected

to be accurate and on time, there are still irregularities with computerized data

management systems therefore this study will reveal if the computerized data

management systems have affected the organization’s financial reporting depending on

the circumstances or issues on the ground.

1.2 PROBLEM STATEMENT.

Despite the introduction of computerized data management system in DTB banks, the

bank is unable to collect, process, and report quality financial and management

information to the interested users which is accurate, reliable and timely. And also others

where the system is effective, the systems are forced to commit fraud. On this note, one

wonders how such fraud occurs in an organization of nation repute with well established

computerized data management system such as operational data base, analytical database,

and distributed database among others which are put in place.

1.3 PURPOSE OF THE STUDY

The purpose of the study was to establish a relationship between computerized data

management system and financial reporting in DTB.

1.4 OBJECTIVES OF THE STUDY.

To evaluate the effectiveness of computerized data management system in DTB.

To measure the effectiveness of financial reports prepared in DTB.

To establish a relationship between computerized data management system and

financial reporting in DTB.

1.5 RESEARCH QUESTIONS

How effective are computerized data management system in DTB?

Are financial reports prepared in DTB according the standards?

Is there a relationship between computerized data management system and

financial reporting in DTB?

1.6 SCOPE

1.61 Geographical scope; The study was carried out in DTB (Wandegeya Branch).

1.62 Conceptual scope; The independent variable involved in the study is computerized

data management systems.

The dependent variable is financial reporting which was based on historical explanations

or documents from past activities.

The dimensions used in the measurement of the independent variables were; degree of

accuracy of reports, accessibility, reduction on information handling and fraud

prevention.

The reports examined included, the statement of financial position, statement of

comprehensive income, cash flow statements among others.

1.63 Time scope: The research covered a period of 3 years, from 2008 to 2010.

1.7 SIGNIFICANCY.

The research contributed towards my partial fulfillment of the award of a

bachelor’s degree in commerce.

The research has guided DTB and other commercial banks in analyzing the

impact of computerization in the provision of reliable, accurate and timely

information to the users, customers and also to management to make timely

decisions.

It has acted as a starting point for other researchers to carry out research on

similar problem.

CHAPTER TWO

LITERATURE REVIEW.

2.0 Introduction.

This chapter provides the review of issues obtained from different sources including

textbooks, journals, and articles, among others that relate to the major variables.

2.1 Computerized data management systems.

Computerization of data management system involves the use of computers to handle

voluminous data with accuracy and speed and also efficiency aimed at overcoming the

physical limitation of manual data management so that qualitative reports can be

produced.

2.1.1 Types of computerized data management systems

Operational database

These databases store detailed data about the operations of an organization. They are

typically organized by subject matter, process relatively high volumes of updates using

transactions. Essentially every major organization on earth uses such databases.

Examples include customer data base that record contact, credit, and demographic

information about a business' customers, personnel databases that hold information such

as salary, benefits, skill data about employees, Enterprise resource planning that record

details about product components, parts inventory, and financial databases that keep track

of the organization's money, accounting and financial dealings.(O’Brien. & Marakas G,

2008)

Data warehouse

Data ware house archive modern data from operational databases and often from external

sources such as market research firms. The warehouse becomes the central source of data

for use by managers and other end-users who may not have access to operational data.

Some basic and essential components of data warehousing include retrieving and

analyzing data transforming, loading and managing data so as to make it available for

further use. Operations in a data warehouse are typically concerned with bilk data

Manipulation. (O’Brien & Marakas G, 2008).

Analytical database

Analysts may do their work directly against a data warehouse or create a separate analytic

database for on line analytical processing. For example, a company might extract sales

records for analyzing the effectiveness of advertising and other sales promotions at an

aggregate level. It’s a read only system that stores historical Data on business metrics.

(C.J Date, 2003).

Distributed database

These are databases of local work-groups and departments at regional offices, branch

offices, manufacturing plants and other work sites. Is a soft ware for managing data bases

stored on multiple computers in a network. These databases can include segments of

both common operational and common user data base. (M.T.Ozsu &P. Valduriez, 1999).

End-user database

These databases consist of data developed by individual end-users. Examples of these are

collections of documents in spreadsheets, word processing and downloaded files, even

managing their personal baseball card collection.

2.1.2 Functions of computerized data management systems.

Data management system helps management to get an in depth and clear view of the

organization due to the fact that information is a resource of all human activity. Its links

important information systems so as to attain the required organization goals. (Famisa,

1998)

The ability to update and retrieve data. This is a fundamental component of a DBMS and

essential to database management. Without the ability to view or manipulate data, there

would be no point to using a database. (Leigh Goessel).

Recovery of Data. In the event a catastrophe occurs, DBMS must provide ways to

recover a database so that data is not permanently lost. There are times computers may

crash, a fire or other natural disaster may occur, or a user may enter incorrect information

invalidating or making records inconsistent.

2.1.3 Comparison of computerized data and manual data management system.

Manual data management involved processing of information accomplished by people

using various kinds of paper work, documents journals, ledgers, and work sheets. The

processing steps are laid down in sets of clerical procedures as illustrated below;

Receiving or receipts from customers, post to books of original entry, posting to

subsidiary ledgers, draw up trial balance, preparation of final account.

A computerized data management system does accomplish these tasks accurately and

timely with better financial controls and management reports that involve fewer

personnel and low costs than the manual management system (Sabiiti, 2000)

2.2 Financial Reporting

Financial reporting refers to the means of providing information about the reporting

entity’s financial position and performance that is necessary for assessing the stewardship

of the entity’s management and for making economic decision (Lynch, 2000).

It could also be defined as the idea of publishing financial statements at least to members

for decision making purposes (Nkundabanyanga, 2004).

The provision of information on financial report involves first identification of users such

as shareholders, customers, management among others of which financial reports are a

summary of all transactions recorded in the data management system (Warren, Reeve &

Fees 2000).

Financial reports act as a tool which helps management to evaluate the business financial

conditions and profit making performance. The two common financial statements are; the

statement of financial position, the statement of comprehensive income and the cash flow

statement and these are collectives referred to as final accounts. (Frank Wood and Allan

Sangster, 1998)

2.2.1 The statement of comprehensive income

This shows a list of both incomes and expenditures for the management period in order to

come up with a net profit /loss figure of the period. The statement must be presented at

least annually and should be clearly identified with the following; name of the entity, and

if it is an individual entity or group of enterprises (ACCA study kit 2001).

2.2.2 The statement of final position

This shows the financial conditions/position of the business that is assets owned its

liabilities and the amount of owners/stakeholders equity .The balance of assets, liabilities

and equity accounts on the data required will be listed in this report.

A balance sheet should also be clearly identified with the following; reporting currency

and the level of precision. (ACCA study kit, 1997)

2.2.3 Statement of cash flows.

It is also known as funds flow statement, is a financial statement that shows how changes

in statement of financial position accounts and income affect cash and cash equivalents,

and breaks the analysis down to operating, investing, and financing activities. Essentially,

the cash flow statement is concerned with the flow of cash in and cash out of the

business. The statement captures both the current operating results and the accompanying

changes in the balance sheet. As an analytical tool, the statement of cash flows is useful

in determining the short-term viability of a company, particularly its ability to pay bills.

(Hefert, Enrich A, 2001).

2.2.4 Qualities of financial reports.

Data management standards argue that the financial reports are relevant for decision

making because they must form and revise an expectation as the main objective and

qualities of financial reports. It’s generally agreed that a good financial reports should

have the following qualities.

Relevance

The financial reports should as possible try to strive to assist the users in decision

making. Data which has no bearing on decision making is irrelevant, it is a waste of time

and resources and this most important characteristic that financial reports should posses.

(Nkundabanyanga, 2004)

Reliability.

The financial reports presented ought to be accepted by the users as being credible the

users should have confidence in them. (Nkundabanyanga, 2004)

Understandability.

For financial reports to be useful, they should be understandable .They should not be do

detailed as to confuse the users. They should be as simple as possible. (Hilton, R.W.,

2000)

Objectivity.

Financial reports should be unbiased for this may weaken the organization. The reports

should not be disclosed to favor some other particular user groups financial information

should be reported regularly and soon after the stipulated period usually one year.

(Prentice Hall, 2001)

Completeness.

Financial reports should be complete that is to say they should include all the relevant

information concerning the entity.

Quantifiability

Quantifiable data usually conveys more information than qualitative data but the later

should not be completely ignored as items also prove useful information.

(Nkundabanyanga, 2004)

Verifiability

Data which is verifiable is more dependable and reliable. Verifiability happens when

qualified individual s working independently develops similar measures on conclusions

from the examination of the same evidence. (Nkundabanyanga, 2004)

2.3 The relationship between financial reporting and computerized data

management system.

In order for financial reports to be more accurate, reliable and efficient data management

systems have to be adopted. When data management system is adopted, it means that the

bank will have all it’s important information intact in one program or in one data base,

for instance, for the management to know about the different financial dealings in the

bank they have to go the operational data base to provide them with such information and

since they know where to find that information, it makes it easier and much more faster

to prepare financial reports when required.

2.4 Conclusion.

Data management systems in banks must be effective and strong because the accuracy,

efficiency and credibility of financial reports id based on the system in place. The

analysis of data available show that there is a strong relationship between computerized

data management system and financial reporting.

Quality financial reports can effectively and efficiently be produced by computerized

data management systems and therefore reports must be handled carefully for proper

financial reports. (Susan Lavier, 1988).

CHAPTER THREE.

METHODOLOGY

3.0 Introduction.

This chapter provides description of how the study was conducted .It describes the

research design, study population, Sampling design, sample size, data sources and

collection methods, limitation to the study and solution to the challenges.

3.1 Research design.

The researcher applied both qualitative and quantitative methods to collect data with a

case study of DTB Bank. Both descriptive and analytical research designs were used to

collect data from respondents. And also the cross sectional research design was used to

find a relationship between the two variables.

3.2 population size.

The researcher used a population size of 25 respondents and all the population will used

to collect information.

3.4 Sources of data.

The researcher used both primary and secondary sources.

3.4.1 Primary

Its data which is collected for the first time and is original in character. Data was

developed by use of questionnaires and through interviews especially to those people

who had less time.

3.4.2 Secondary data

It refers to data that is already collected and analyzed by other people. Data was obtained

from journals, textbooks, prospectus, and management reports.

3.5 Data processing

The research used the following methods when collecting data so as to get clear, clean

and modeled information to accomplish the research.

3.5.1 Coding

For open ended questions in the questionnaires the researcher used the coding method to

bring a clear meaning to the answers. This was because some respondents use different

words to explain the same point.

3.5.2 Editing.

The researcher used this method to ensure that the irrelevant data was removed .This was

because some respondents gave information that was irrelevant to the study perhaps

because they miss understood the questions.

3.6 Data summary and presentation

The researcher analyzed data using tables, percentages, frequencies and presented it using

micro soft word and excel so as to ensure accuracy, completeness and legibility of the

research.

3.7 Data analysis.

The researcher analyzed data using the following tools like, excel, spearman’s coefficient

correlation with the goal of highlighting useful information, suggesting conclusions, and

supporting decision making.

CHAPTER FOUR

PRESENTATION AND INTERPRETATION OF FINDINDS FROM THE STUDY.

4.0 INTRODUCTION.

This chapter presents findings and interpretation of the results of the study from the field.

The questionnaire were used to obtain information regarding computerized data

management system in DTB and the extent to which it has effectively contributed to the

quality of financial reporting and make recommendations on how to improve it.

4.1 Findings on general information.

4.1.1 Gender of the respondents.

The respondents were requested to state their gender with the intention to check on how it

impacts on the computerized data management system and financial reporting and their

responses are summarized in the table below.

Table 1 Gender of respondents

GENDER FREQUENCY PERCENTAGE

Male 11 44

Female 14 56

TOTAL 25 100

Source; Primary Data.

Out of the 25 respondents , the female have a higher percentage of 56% compared to the

male with 44%.The female respondents participated more than the male in the study. The

implication is that both the female and male employees of DTB were represented and

influence the effects of CDMS on financial reporting though women are more likely to

influence it more than men.

4.1.2 Educational back ground.

Respondents were requested to give their level of education and responses are

summarized below as follows.

Table2 educational back ground.

GENDER FREQUENCY PERCENTAGE

Diploma 6 24

First degree 18 72

Mater degree 1 4

Doctorate - -

others - -

Total 25 100

Source. Primary Data

From the table above 24% of the respondents were diploma holders, 72% of the

respondents had first degree and only 4% had a master’s degree. In the researcher’s

opinion, this implies that respondents were educated since the majority at least had a first

degree and with 1 masters and therefore the information given in the study is

reliable .This can be justified by the assertion that reliability of financial reports depends

on the level of competence the accounts staff posses.(Salovan’s 2001).

4.1.3 Number of years in service.

Respondents were required to give the number of years which they have been in the bank.

The working experience is summarized as follows.

Table 3; Numbers of worked with DTB

RESPONSE FREQUENCY PERCENTAGE

1-5 22 88

6-10 3 12

11-15 - -

16-20 - -

Over 20 - -

TOTAL 25 100

Source; Primary data.

From the table above, respondents who had worked between 1-5 years were 88% and

between 6-10 were 12% .This implies that the employees of DTB (wandegeya branch)

are still new in the system(fresh recruits) and they are still getting experience in the

banking sector.

4.1.4 Preferred system in the organization.

Respondents were required to the system they would prefer to be used in DTB and also

suggest a reason as to why they prefer that. The preferred system is summarized in the

table as follows.

Table 4 system preferred to be used.

RESPONSE FREQUENCY PERCENTAGE

Manual - -

Computerized 8 32

A combination of the two 17 68

TOTAL 25 100

Source; Primary data

In the table above, 32% preferred computerized system, manual were nil and those who

preferred a combination of the two were 68%.And the reason they gave is that, it is

convenient and flexible. In the researcher view is that the majority of the employees

preferred a combination because the two systems can be used concurrently that is to say

is computerized system is off, they can easily switch to manual and work flows on well

without inconveniences.

4.2 The effectiveness of computerized data management systems

An inquiry was made on whether computerized data management system is used in DTB.

This was done with the intention to establish whether computerized data management

system has improved on the accuracy, time saving in the preparation of reports.

4.2.1 Existence of manual data management system.

Respondents were required to show if manual data management system still existed to

check if the bank went electronically or still uses file for storing information. The

responses are summarized as follows

Table 5. Manual Data Management System.

RESPONSES FREQUENCY PERCENTAGE

Strongly agree 3 12

Agree 21 84

Not sure - -

Disagree 1 4

Strongly disagree - -

TOTAL 25 100


From the table above, respondents who strongly agree were 12%, those who agree 84%,

disagree were 4% and the rest were nil. This implies that manual data management

system I still existing in DTB with accompaniment of the computerized data management

system.

4.2.2 Soft ware used.

Here respondents were requested to comment on the software used in the bank if it’s of

standard.

Their responses are summarized below.

Table 6: Appropriateness of soft ware used


Strongly agree 3 12

Agree 19 76

Not sure 1 4

Disagree 2 8

Strongly disagree - -

TOTAL 25 100


From the table above, those whose who strongly agree were 12%, 76% agreed, 4% not

sure and 8% disagreed and nil strongly disagreed. This implies that the software used in

this bank is appropriate and convenient for them since the majority agreed.

4.2.3 Computerised Data Management System Leads to Prudent Decision Making

and thus Achieving Organizational Goals.

Table 7: Data Management System and Decision Making.


Strongly agree 8 32

Agree 14 56

Not sure 1 4

Disagree 2 8

Strongly dis agree - -

TOTAL 25 100

Source: Primary data.

From the table above, 32% strongly agreed,56% agreed ,4% were not sure,8% dis agreed

and nil strongly disagreed. It implies that computerized data management system at a

small extent has helps the bank to make prudent decisions and thus achieve their goals.

4.3 Financial Reporting.

An inquiry on financial reports was carried out with the intention to examine their

quality and also whether DTB has an independent data management system.

4.3.1Data management standards and financial reports

The respondents were requested to give a view if data management standards or systems

are used and applied in drawing up financial reports. The responses are summarized

below

Table 8: Data management and financial reporting


Strongly agree 3 12

Agree 22 88

Not sure - -

Disagree - -


TOTAL 25 100

Source. Primary data

From the table above, 12% of the respondents strongly agree and 88% agree while the

other responses were nil. This implies that the data management standards are applied in

drawing up the financial reports.

4.3.2 The accuracy, reliability and timeliness of financial reports

Table 9; The quality of financial reports.


Strongly agree 10 40

Agree 14 56

Not sure - -

Disagree 1 4


TOTAL 25 100

Source; primary data.

From the above, the percentage of the respondents who strongly agree is 40%,those who

agreed were 56% and those whose who disagreed were 4% while those who were not

sure and strongly disagreed were nil. This implies that the financial reports are accurate

although not 100%, reliable and timely.

4.3.3 Checking updates on data management system.

This was intended to find out after how long the bank updates its system. It’s done either

to install new programs or check on the check on the old ones and up date them.

Responses from the respondents are summarized below

Table 10 Data updates


Within 1 month 20 80

Between 1-3 5 20

Between 3-4 - -

Between 3-4 - -

Between 3-6 - -

TOTAL 25 100

Source: Primary Data.

From the table above, out of 25 respondents 80%said that the system is up dated within 1

month, 20% said between 1-3 months, while the rest were nil. This implies that DTB

always updates its system monthly.

4.3.4. Sources of capturing data.

This question was intended to find out which source does DTB use when capturing

information for the preparation of financial reports.

Table 11 sources of data


Computerized 8 32

Manual - -

Both 17 68

TOTAL 25 100

Source: Primary Data.

Information captured through computerization was 32%, manual nil and both had

68%.This means that the bank uses the manual and computerizes data management

systems when getting information for the preparation of financial reports.

4.4 The relationship between computerized data management system and financial

reporting.

The researcher analyzed this section using the spearman rank correlation to find whether

the relation between the variables is significant.

Response on whether computerized data management systems have enhanced financial

information accuracy and quality of work will be the independent variable and

represented by Table X

Table X


Strongly agree 12 48

Agree 12 48

Not sure - -

Disagree 1 4


TOTAL 25 100


Responses on if financial reports are independent on computerized data management

system will be the dependent variable and represented by table Y.

Table Y


Strongly agree 2 8

Agree 10 40

Not sure 1 4

Disagree 10 40

Strongly dis agree 2 8

TOTAL 25 100


x y Rx Ry D(x-y) D2

12 2 1.5 3.5 -2 4

12 10 1.5 1.5 0 0

1 4.5 5 -0.5 0.25

1 10 3 1.5 1.5 2.25

2 4.5 3.5 1 1

25 25 7.5

Using the spearman correlation coefficient

r=1-6(D^2)

n^2(n-1)

r=1-6*7.5

25^2(25-1)

R = 0.997.

R^2=0.994

Therefore r^2=99%

The relationship is very strong and it’s a positive significant, it means that there is a

strong relationship between computerized data management system and financial

reporting in DTB.

The coefficient of correlation r^2 is very high (99%) meaning that the financial reports

prepared in DTB bank depend on the existence of computerized data management

systems and the 1% are the other factors that influence the preparation of financial reports

in the bank.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION.

5.0 INTRODUCTION.

The chapter presents the summary of the findings from the field .conclusion,

recommendations and areas of further research.

5.1 Discussion of the findings

The researcher discovered that computerized data management system and financial

reporting go hand in hand in DTB. The preparation of financial reports is enhanced by the

existence of computerized data management system. The updates and easy retrieve of

data helps the bank to prepare financial reports easily. This was cited by Leigh Goessel as

one of the functions of the functions of computerized data management systems.

The reason as to why data management system is dominating in DTB is that it has helped

the bank to keep track of its relevant information. Information is not permanently lost as

the case of manual data management system, it is fast, accurate, less personal

involvement, and less costs, the researcher is in agreement with Sabitii 2000 who said “a

computerized data management system does accomplish many tasks accurately and

timely with better financial controls and management reports that involve fewer

personnel and low costs than the manual management system”

5.2 Summary of Findings.

The study examined the impact of computerized data management system on financial

reporting. An attempt was made to analytically determine whether computerized data

management system had an impact on financial reporting. Both primary and secondary

data methods were used in the study. The study was guided by the three objectives that

included the evaluation of the effectiveness of computerized data management system,

the examination of financial reports prepared in DTB, and establish a relationship

between computerized data management system and financial reporting in DTB. The

summary of the study is as follows.

5.2.1 The Effectiveness of Computerized Data Management Systems.

The computerization of data in DTB has improved their ease with information storage

and retrieval when needed which is an enhancement to the traditional data management

system. It has also helped the bank that information is kept safely accessed by only

authorized people with permission there by keeping their virtual information secret.

5.2.2 Production of Financial reports.

The study revealed that DTB applies internal controls in the form of budgets to enhance

their reliability. It also does have an aggressive data management system policy when it

comes to review and change of data management policies. It follows data management

standards in the preparation of reports. However, the researcher discovered that financial

reporting is carried out by accountants with little involvement of other functions.

5.2.3 Relationship Between Computerized Data Management System and Financial

Reporting.

There is a strong and positive relationship between the two variable (r=0.997) and r^2

=99% meaning that the existence of computerized data management system has a great

significance on the financial reporting in DTB and the others factors that influence the

preparation of financial reports only have 1%.

5.3 Conclusions.

5.3.1 Effectiveness of computerized data management system in DTB

The findings from the research led the researcher to conclude that though the bank

adopted an enhancement in their information needs by computerizing their data

management systems, it had not fully developed to meet since manual data systems still

exists in the bank.

5.3.2 Financial reports prepared in DTB

From the examination made, the researcher concluded that the management regularly

updates it’s data management system that’s why the reports are always timely, accurate,

and reliable.

5.3.3 Relationship Between Computerized Data Management System and Financial

Reporting,

The findings showed that CDMS had improved business conditions and performance

particularly in the preparation of financial reports and quick decision making.

5.4 Recommendations.

The researcher recommends that banks should regularly update their computerized

system may be monthly since it is very virtual in the preparation of financial reports and

their preparation (reports) requires one to have current information/updates.

Manual computerized data management should not be completely abolished. Some of the

work or documents should be kept on hard copies such that in case some thing goes

wrong with the computerized data management the bank has some where to refer to.

5.5 Areas of further research.

Having identified some gaps in the literature review and limitation of the study that the

researcher could not fulfill, the researcher recommends that other researcher in the same

field should expand on the sample size and incorporate new variables that had been held

constant so as to feign the results of the study, hence reducing on the margin of errors and

move towards accuracy of the findings.

The researcher also recommends further research on other organizations besides the bank

such as the non financial institutions based on the focal point in order to generalize the

findings.

REFERENCES

ACCA study kit (2001), Information Analysis United Kingdom, London: BPP publishers.

Accounting Hand book Vol I (2001), Policy Statements & Standards of Accounting Concepts, Prentice Hall

C.J Date (2003), An Introduction to Data Base System. 8th Ed. Addison Wesley.

Frank wood & Allan Sangster (1998), Business Data Management, London: Pitman Publishers.

Foulks Lynch ltd ACCA paper 2.5 (2000). Financial Reporting, FTC Foulks Ltd

Helfert , Erich A. (2001). "The Nature of Financial Statements: The Cash Flow Statement". Financial Analysis - Tools and Techniques - A Guide for Managers

Hilton, R.W.,2000 Managerial Accounting, 4th ed. Irwin/McGraw-Hill

M.T.Ozsu & P.Valduriez (1999) Principles of Distributed Data Base System 2nd Ed, Prentice-Hall.

Nkundabanyanga k. Stephen (2004) Advanced Accounting. Practical Approach 1st Ed, Kampala Makerere University Business School.

O’Brien, J & Marakas G (2008) Management Information Systems, Computer Software. New York: McGraw-Hill

Sabiiti. J. (2000) Financial Reporting and Internal Control.

http://en.wikipedia.org/w/index.php?title=Erich_A._Helfert&action=edit&redlink=1

Seltzer, M. (2008, July). Communications of the ACM, 51(7), 52-58. Retrieved July 6, 2009, from Business Source Complete database.

Makerere University

Faculty of Economics and management

Dear Respondent,This questionnaire is aimed at carrying out research work on computerized Data Management Systems and Financial Reporting in banks.You have been chosen to participate in this study; therefore, you are kindly requested to assist by honestly answering questions contained in this questionnaire. The information provided is strictly to enable the researcher accomplish his academic research and will be treated with utmost confidentially.Your name and signature will not be needed. Please feel free to give the most appropriate responses by ticking the appropriate answers

(A) Personal information

(Please tick the appropriate answer)

1. Indicate your sex.

Male Female

2. Highest level of academic qualifications attained.

Diploma First Degree Masters Degree

Doctorate others, specify………………………………

3. What post do you hold in the company?

Manager Human Resource Manager Accountant Cashier

4. For how long have you been working in this organization?

1-5 years 6-10 years 11-15 years

16-20 years over 21 years

5. Which of the following would you prefer to be used in the organization?

Manual computerized a combination of the two

Give reasons for you answer……………………………………………

(B) Effectiveness of Computerized Data Management systems


1. Manual data management systems still exist in this organization.

Strongly Agree Agree Not Sure Disagree Strongly

Disagree

2. The software used is appropriate.


Disagree

3. Computerized data management systems have improved the speed, accuracy and

reliability of financial information.


Disagree

4. Computerized data management systems have linked important information

systems to achieve the required organization goals.


Disagree

5. Prudent decision making has been achieved by use of computerized data

management systems to process data and information.


Disagree

6. Computerized data management systems are regularly upgraded as well as

maintaining the traditional manual systems.


Disagree

(C) Financial Reporting

The following statements are intended to examine the financial reports prepared in

banks. (Please tick the appropriate answer)

1. Financial reports are often drafted.


Disagree

2. Data management standards are applied in drawing up financial reports.


Disagree

3. Financial reports produced are accurate, reliable and timely.


Disagree

4. After how long is the data management function checked for updates?

Within 1 month between 1-3 months between 3-6 months

Between 3-4 months between 6-12 months

None of the above, please specify ………………………………………………..

5. What sources are used in capturing business information?

Computerized Manual Both None of the two

, please specify …………………………………………………

6. How often are the financial reports draw-up?

Weekly quarterly monthly Not sure

(D) Computerized Data Management systems and Financial Reporting.


1. Computerized data management systems have enhanced financial information

accuracy and quality of work.


Disagree

2. Computerized data management systems have improved financial reports timeliness

and decision making.

Strongly Agree Agree Not Sure Disagree

Strongly Disagree

3. Conformity in reporting has been followed since the establishment of computerized

data management systems.


Strongly disagree

4. Verifiability of financial reports is always done independently by qualified

individuals.


Strongly Disagree

5. Financial reports in this organization are independent on the computerized data

management systems.


Strongly Disagree

THANK YOU VERY MUCH FOR YOUR ASSISTANCE!

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