Accounting Information System and Financial Performance of Deposit Money Banks in Nigeria

Abstract

The need for businesses to ensure achievement of set performance objectives and survive the complex, dynamic and highly competitive business environment are among the factors that made Accounting Information System (AIS) relevant in financial performance and business management. Question on the capability of accounting information generated to improve financial performance has been raised in past studies. This study examined the effect of AIS on the financial performance of Deposit Money Banks (DMBs) in Nigeria. The study adopted a survey research design with the employees of all licensed commercial DMBs in Nigeria totaling 100,590 as the study population. The sample size comprised 420 randomly selected staff of 21 commercial DMBs in the operations, information technology, finance and control functions. The data collected through the use of questionnaire were analysed using descriptive and inferential statistics using the ordered logistic regressions. The study established that there was a significant positive effect of AIS on financial performance (β=1.946, 1.815, 2.596 and 4.310;W (402) =5.195, 4.756,12.872 and 26.303; p= 0.023, 0.029, 0.000 and 0.000;R2 = 0.464).The study concluded that accounting information system contributed significantly to financial performance across all DMBs in Nigeria and that AIS practices are similar in DMBs in Nigeria. The study recommended that management of DMBs should consider improvement of AIS an ongoing process and carry out periodic evaluation of investment in technology relating to accounting information. It also recommended that regulators should improve on policy guidelines on the processing of accounting information that will ensure faithfully represented output.