Accounting Information System and Financial Performance of Financial Institutions in Uganda. A Case Study of Pride Micro Finance Kabalagala Branch in Kampala.

TABLE OF CONTENTS

DECLARATION

APPROVAL

ACKNOWLEDGEMENT

DEDICATION iv

TABLE OF CONTENTS v

ABSTRACT ix

LIST OF ABBREVIATIONS x

CHAPTER ONE

iNTRODUCTION 1

1.0 Introduction 1

1.iBackground of the study

1.1 .1 Historical Background

1.1.2 Theoretical Background 2

1.1.3 Conceptual Background 2

1.1.4 Contextual Background 3

1.2 Problem Statement 4

1.3Objectives of the study 4

1.3.lGeneral Objective 4

1.3.2Speciflc objectives 4

I .4Research questions

1.5 Scope of the study

1,5.1 Subject scope

1.5.2 Geographical scope s

1.5.3 Time scope

1.6 Significance of the study

1.7 The Conceptual Framework 6

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CHAPTER TWO .7

LITERATURE REVIEW 7

2.0 Introduction 7

2.1 Definition of terms 7

2.1 .1 Accounting Information System 7

2.1.2 Financial Performance 7

2.2 Theoretical Framework 7

2.2.1 Meta Theory Model 7

2.3,1 Effects of Data Collection on Return on Assets in Financial Institutions 9

2.3.2 Effects of Data Storage on Efficiency in Financial Institutions 9

2.3.3 Effects of Data Processing on decision making 10

2.4 Financial Performance 11

2.5 Relationship between A1S and financial Performance of financial institutions 12

2.5 Research Gaps 13

CHAPTER THREE 14

RESEARCH METHODOLOGY 14

3.0 Introduction 14

3.1 Research Design 14

3.2 Study Population 14

3.3 Sample Design 14

3.4 Sampling techniques 15

3.5 Data Collection Methods 15

3.5.1 Interviewing 15

3.5.2 Questionnaire Method 15

3.6 Data Collection Instruments 16

3.6.1 Self-Administered Questionnaire 16

3.6.2 Interview Guide 16

3.7 Data Analysis 16

3.8 Measurement of variables 16

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3.9 Data quality control.17

3.9.1 Validity of Data Collection Instruments 17

3.9,2 Reliability of Data Collection Instruments 17

3.10 Research procedure 17

3.11 Limitations ofthe Study 17

CHAPTER FOUR 19

PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS 19

4.0 Introduction 19

4.2 response rate 19

4.1 Demographic characteristics 20

4.1.1 Gender 20

4.1.2 Age bracket 20

4.1.3 Education level 21

4.1.4 Working experience 21

4.2 Accounting information system 22

4.2.1 Data Collection on return on assets at Pride Microfinance limited; Kabalagala branch in

Kampala 22

4.2.2 Effects of data storage on efficiency at Pride Microfinance limited; Kabalagala branch in

Kampala 23

4.6 The relationship between Accounting Information System and financial performance of Pride

Micro-finance limited in Kampala 24

4.7 discussion of findings 25

CHAPTER FIVE 26

DISCUSSION, CONCLUSION AND RECOMMENDATIONS 26

5.1 Introduction 26

5.2 Summary of findings 26

ABSTRACT. The study sought to find out the relationship between accounting information system and financial performance of financial institutions in Uganda; a case study of Pride microfinance limited, Kabalagala branch in Kampala. The study specifically looked at the effect of AIS on return assets, effect ofAIS on Efficiency and the effects ofAIS o decision at Pride microfinance limited in Kampala at Kabalagala branch. A cross-sectional study design for quantitative and qualitative analysis was used on 46 respondents that brought back the questionnaires. Data was collected by use of a self-administered questionnaire, and interview guide. Quantitative data was analysed at univariate level basing on the mean and frequencies, percentages, bivariate level using correlation coefficient with the help of Statistical Package for Social Sciences 17.0 (SPSS). Qualitative data were analysed by content analysis by composing explanations and substantiating them using the respondents open responses. The researcher found out that accounting information system provides information financial performance measuring ratios, provides useful information about the performance of debt in the capital structure that the general manager must try to influence in order to improve and manage the overall organizational performance. The researcher further found out that AIS provides information about assets in an organization which helps to do investment planning within pride microfinance limited. The study also recognized that accounting information system enables the users to make informed judgments. Since every decision involves several alternatives, It assists the user to decide his course of action. Accounting is a process which with the help of accounting records produces financial statements. It also helps management in their important duties of planning, organizing, leading, supervising, controlling and decision making. The researcher concluded that AIS affects the overall financial performance in pride Microfinance limited at Kabalagala where it highly influence decisions made, the nature of communication and efficiency in performance at the financial institution. Therefore the researcher recommended pride microfinance to undertake more awareness programmes to create positive stance towards AIS amongst stakeholders. In other words a lot of sensitization needs to be done to the users and all stakeholders for it to be successful at pride microfinance limited in Kampala especially at Kabalagala branch.