Study: Computerized Accounting and Financial Reporting at Bank Sohar

This report investigates the impact of computerized accounting systems on financial reporting and fraud prevention within Bank Sohar, a rapidly growing bank in Oman. The study assesses how computerized accounting affects financial reporting, fraud prevention, and risk minimization within the bank, focusing on two branches and utilizing performance data from 2012-2017. It explores the benefits of adopting computerized accounting, including improved financial reporting, enhanced fraud detection, and better risk management, while also addressing potential challenges. The research questions include how computerized accounting aids financial reporting, minimizes fraud and risk, and identifies associated challenges. The rationale highlights the evolution from manual to computerized systems in response to increased fraud and technological advancements. The study provides insights into the advantages of implementing computerized accounting, aiming to help firms understand the benefits and integrate such systems to improve their corporate financial reporting, and also aims to contribute in filling the gap identified through the study of existing literature.

Title: A study on the impact of computerized
Accounting on Financial Reporting and Fraud
Prevention in Bank Sohar
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Section 1: Introduction
1.1 Introduction
In the current world, technology plays a significant role in meeting accounting operations of an
entity. First and foremost aim of accounting is to process financial information by preparing
financial statements at the end of the financial year. Keeping track of the financial information
enclosed in a financial statement is considered as an integral business practice of an entity.
Previously, manual accounting system followed by the firm where transactions are recorded with
the help of journals, ledgers. Manual recoding of transactions is complex task for an individual
as this requires more time and energy which makes financial reporting very tedious and
complicated process. Due to the modern touch in a business, the growth of the firm is reflecting
in its sales and in attracting clients towards its firm. Emergence of the business is observed due
by watching growth of the business when their customers get increases with the passage of time.
Technological advancements in the existing market increases the potential of the business entity
as motive of an entity is change according to the technological changes to provide latest output to
its customers. With the technical change in the banking industry the increasing number of
banking companies is using the technology in the form of data base management system and
Enterprise resource planning for maintaining and managing their accounting, inventory and
additional records.
The entire volume of transactions takes places in a bank increases along with the risks associated
with the banking due to sudden transformation of the overall banking sector. The manual process
of accounting used by banking industry will, in turn,, increases all the risks attached with the
system as checking of the transactions in manual require higher attention otherwise it leads to
fraud in the banking industry as data can be manipulated easily by its employees.
All these can be resolved by adopting an appropriate system of accounting in the form of
Enterprise resource planning to get rid of all the confidentiality issues currently facing by an
entity nowadays due to the manual system of transactions recorded in the business. The
inventories available in a firm can be tracked with the help of ERP system to know the position
of the business through tracking reports of the inventories. All these issues incurred in an entity
indicates that there is need for adopting the computerized accounting system in the form of ERP
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to store and process the monetary data in providing speed and higher efficiency. The
development of accounting software packages is due to the increasing risks in a banking sector
and complexity in the managing all the financial records through the manual accounting systems.
Enterprise resource planning is a customized accounting software application that records and
processes all the transactions related to different financial aspects such as accounts payable,
accounts receivable, payroll and trail balance.
According to (Bhasin, 2015), suggest that the reason behind using the customized accounting
software is to stream line the lengthy business processes by automating all the business functions
by applying this software. The computerized Accounting System helps in recording all the
information related to the accounting field as this system is programmed according to the needs
and the expectations of all its users whether internal as well as its external users. ERP system
uses by an entity has a backup feature which will at the same time store the confidential
information feeds into the system in backup as it includes a database-oriented application where
the transaction data is stored well in an organized database (Oliver, 2014). Financial Reporting Is
a system which is a procedure of presenting the financial data judging the performance of an
entity by stating its financial position, operating performance and cash flow of funds (Gupta and
Gill, 2012). This shows the combination of accounting through computer results in the positive
results for the firm reflects in the higher performance of the company aids in preparation of
better financial reporting so that users can make those decisions effectively.
One of the features of Enterprise resource planning is that an entity can keep track on the
existing performance of the company in the terms of inventories, receivables and payables report
of the company depicts the exact picture about the company’s performance. ERP helps in
generating growth reports of the company whose benefits gained by an entity by using this
system. The success of this system inspired various companies as nowadays many companies
replaced the manual-based accounting by providing quick access of information to all the
internal stakeholders of the firm such as accountants, mangers, employees through the
computerized system.
This system helps in producing authentic and reliable financial reports for the management and
its external users. In the international market, it is essential for the existing accounting firm to
deal with severe issues as negligence of an individual will directly affects the overall share of the
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company. This will emphasizes in ensuring efficiency, accuracy, speed of daily entry of
transactions and better financial reporting.
Background of the Bank Sohar: Bank Sohar is the one of the fastest growing banks in
Sultanate of Oman. Bank Sohar provides commercial, investment and Islamic banking services
within Oman. It operates through whole sale banking, retail banking, government and project
finance as well as investment and treasury finance segments. Bank Sohar also recently launched
their net banking services along with SMS Banking, mobile banking services and remittance and
fund transfer’s services. Their aim is to help small and medium enterprises by providing the loan
facilities for raising capital and being financial advisor to these enterprises. They have
implemented new technologies to create a sustainable organization. By investing in people and
training staff regularly Bank Sohar aims to spread knowledge with advanced technology and add
value to their business.
1.2 Objectives
 To assess the impact of Computerized Accounting System on Financial Reporting system
of Bank Sohar.
 To evaluate the effect of Computerized Accounting System on fraud prevention within
Bank Sohar.
 To evaluate the impact of Computerized Accounting system on the risk minimization
within Bank Sohar
 To address any possible challenges associated with computerized Accounting System in
Bank Sohar.
1.3 Research Question
 How does Computerized Accounting System aid in financial reporting within Bank
Sohar?
 Does the Computerized Accounting System help in fraud minimization or prevention in
Bank Sohar?
 How the does Computerized Accounting System aid in risk minimization within Bank
Sohar?
 What are the challenges associated with the computerized Accounting system?
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1.4 Rationale:
Fraud is one of the most serious economic crises impacting the banking industry from a long
time. To combat the increasing fraud and the increasing role of information technology in
enhancing the banking operations, the manual banking process have evolved into the
computerized accounting systems. This is the reason why the researcher intends to conduct this
study to highlight the impact of computerized accounting system in Bank Sohar and thereby
contribute in filling in the gap as identified through the study of the existing literature. The
researcher further intends to illustrate the benefits of adopting the computerized accounting
within Bank Sohar and its contribution in enhancing the financial reporting, fraud and risk
minimization and improving the bank’s performance. Additionally, the factors which prevent
management to adapt to the new computerized accounting system will always be looked upon.
With increasing complexity of transactions and emergence of new technology, the researcher
intends to determine how well Bank Sohar is using information technology to improve its
financial reporting.
1.5: Significance of study
The significance of this study is to provide necessary information on the effect of Computerized
Accounting System in financial reporting and fraud prevention within Bank Sohar. The study
will also explore the greater influence and effects of Computerized Accounting System to
employees and users of Bank Sohar. Accordingly, also the factors will be considered which force
a company to adopt Computerized Accounting System in better their Corporate Financial
Reporting. This Research will be useful for those firms who have not yet adopted Computerized
Accounting System to understand the benefits and adopt it within their organization and use it to
their own advantage.
1.6: Scope of study
The Research focuses on evaluating the effect of Computerized Accounting System in 2
branches of Bank Sohar. Ruwi and Qurum branch will be considered for the Research. The study
will be based on last 5 years performance (2012-2017) in determining the changes takes places in
the financial performance of Sohar Bank to make changes in the Computerized accounting
system to overcome the financial issues.
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Section 2: Literature Review
2.1 Introduction
A changes takes place in the technology has captured the interest of business towards this as this
has transformed the accounting systems. In the past people used to store their data physically
with the help of paper back files where lots of risk is there for the confidentiality as the data
stored in files can be manipulated by anyone. But this problem has overcome with the
introduction of ERP system of accounting which additionally included the cloud computing
system. The system of cloud computing is useful in storing large volumes of data and
transactions easier to process and manage and thus produce timely and accurate reports. Users of
the business who takes decisions in an entity such as users, owners, managers, investors can
access accounting information through this system which saves their time and energy which will
utilized in other important matters. Amveko (2011) stated that the field of Accounting is
segregated into aspects such as manual accounting and computerized accounting.
It is a computer based system which collaborate all the accounting principles and practical
accounting concepts to keeping all the information for the purpose of recording, processing,
analyzing. The generated information will further help in making important financial decisions in
assessing the overall performance of the company. (Fleming and Hermanson 2016). (Soudani,
2013), observed that accounting system that accomplishes the needs of business user whether an
entity or a sole proprietor who intends to record all the expenses and income to know the amount
of profit generated by them in a particular period. This will justify the purpose of operating its
business which is fully surrounded by competition. It is a system in which users can input
information and process that raw information to generate financial reports. The difficulties of
keeping manual records will get resolved by adopting automated system which saves the time of
an individual in creating manual paper files which is fully unsecured method of recording of the
transactions. The opinions of both authors is different but they discuss on a similar topic of
explaining the importance of Computerized accounting system in meeting the earlier difficulties
faces b an entity using the manual recording system. ERP is used for the purpose of recording,
analyzing and producing better financial reports and discussing the usefulness of maintaining
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digital transactions stored and input all data on computers instead of relying on manual book
keeping ways.
Acher and Ryan (2016) highlights the unique feature of the modernized accounting system in the
form of ERP is that it quickly generate different kinds of accounting reports used by a business
management for their budget and variance analysis. In preparing budgets and the variance
analysis an entity uses standard costing approach for the data processing which produces
accurate and faster data to accomplish the managers needs to submit the same within a stipulated
time for taking strong business decisions.
Similarly, Mohapatra, & Popova, (2013) stated that with the help of custom built system of
accounting the speed of the same has increases in generating the final output in a shorter span of
time which helps in retrieving the relevant balance sheets, income statements and passing
automatic accounting entries. The mechanism of this system will in turn, helps in preparing
financial reports by considering the existing financial position of the company to present its
image in front of all its buyers appropriately. Due to increasing competitions in the market, an
entity need to keep stress on its current business polices by upgrading its business functions
according to the expectations of an enterprise to provide quality of services to satisfy all their
users. In creating its place in the market, the increasing speed of the accounting system it allows
senior managers in searching problematic areas in the corporate environment and also act as a
arbitrator in resolving all the issues of the workplace. The managers can thus make better
investment decisions to improve its liquidity position by knowing the reason behind the decline
in its current position as by knowing the reason they can take decisions appropriately (Cheng
2012).
Villiani and Rosa, (2016), investigated that improvement of the business performance has
noticed by implementing the accounting system in an entity. Performance of the organization
was improved due to highly integrated application which transformed the business processes due
to the features like inventory control, reporting process. It helps the employees in providing
information on managing the same in a better manner to pay off all it’s their debtors on time and
ensure timely payment to their suppliers and customers. This is effective approach in building
effective communication in making decisions for the betterment of the business.
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(Gunawardana,2015) notices the dissatisfaction of managers as they are able to meet the
international financial reporting standards such as profit and loss statements, income statements
and balance sheets without using Computerized Accounting System. This aids in auditing
examination of the company in getting full access of the required information such as codes of
cheque, transactions and payments which helps to provided on time in improving the
documentation procedure for better auditing.
(Jing, 2013) stated the disadvantages of using the modernized version of computerized
accounting system as it is essential to know both the pros and cons of the system to improve the
overall company’s performance. Loopholes of the accounting software will, in turn, affect the
performance of an entity as a computer virus spreads through the accounting software will spoils
the stored information on the desktop of a user. This is the risks involved in using this system
requires skepticism of an individual before any confidential information on the server without
taking the back of the same. The adverse affect of such risk can be loss of valuable information
such as previous accounting reports, information pertaining loans etc.
The model of accounting system shows a different component which is required in developing
efficient system of financial reporting in a business. It starts with the input process, where the
data is collected and processed by information system such as the relevant sales order or
purchase order. Collected data in the initial stage is further processed using reliable information
and organized in a systematic manner. Then the data is stored in the central repository server
where the permanent data can be maintained over extended time ( Akesinro, Abayomi 2016).In
the final stage, the output is produced with the help of system for generating accounting reports.
After execution of the system, the feedback of all the users who uses this system on the output
and the quality on the reports generated. This feedback tends to serve as a source of control
measure in the information system.
Indeed, Kranacher and Riley (2016) have argued collected information from different sources are
prioritized according to the different groups created by an entity to present the same in front of
its clients. Manual accounting system reduces the final report by taking lots of time which
decreases its reliability as this will not provide real time benefit to its external users by providing
the final solutions within a week as this takes a long span of 3 months by making use of
computerized accounting ensures the reports are generated efficiently and effectively with better
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information to be able to manage the resources. Companies that adopt computerized accounting
are able to obtain a competitive edge as they are able to better manage their resources.
2.2 Components of Computerized Accounting System
For ensuring the effectiveness of the system it requires to implement proper Accounting software
in an entity which fulfills all the requirements of the business in a lesser period of time. This is
based on the database management approach that allows the firm to prepare, record and store the
transactions related to accounts payable, accounts receivables, Payroll, inventory. Budgeting cost
volume profit analysis and general ledger (Mahesh (2015).
The following are the components of computerized accounting system which are mention as
given below:
1) Preparation of accounting documents- This aids in the preparation of Accounting documents
like cash memos, bills, invoices and accounting vouchers to beautifully present the financial
report for the sake of an enterprise (Ahmad 2013). Computerized accounting system in the form
of ERP have in built featuring of providing templates which ensures the accuracy of the
documents are generated through this system.
2) Recording of Transactions- Daily routine transactions of business are recorded with the help
of accounting system which ensures a uniqueness of the same as it generates unique transaction
ID and account number for all the recorded input into the system. This is act as a way of
controlling the transactions by keeping watch ion the reliability of the information feeds in the
system where unique code for different groups of accounts transactions in general, accounts
payable and accounts receivable ensures everything is recorded and simplified with greater ease.
(Jing, 2013) argued that computerized packages helps in minimizing the arithmetical errors of
feeding wrong transactions in wrong account, wrong figure human recording different
transactions in reports and lead to better financial reporting. Thus, recording of transactions is
made simple with the help of computerized accounting system.
3) Preparation of trail balance and financial statements- After the preparation of journal entries,
the data is transferred into the ledger accounts automatically by the computer which leads to
spontaneous generation of results. The convenient preparations of trial balances are prepared by
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the computer with the appropriate debit and credit entries leads to greater accuracy of records
(Unnikrishnan, 2012). The computer also is programmed to prepare the financial statements and
statement of income statements and ensure better financial reporting to management and users.
2.3 Importance of computerized Accounting
Use of computers reflects the modernized version of the accounting system in which the mode
has changed from manual recording of the business transactions to the automating feeding of the
overall information of an entity. It is a process which consists of recording, classifying and
summarizing the monetary data has become more accurate and quicker with the computerized
accounting system. It focuses on the four basic principles of accounting helpful recording
transactions such as historical cost principle, revenue recognition principle, matching and full
disclosure embedded within the computerized system. This principle helps in ensuring the
conceptual accounting guidelines for system followed by Sohar Bank. Feature of double entry of
accounting is that where every transaction has dual effect in the financial statements as the
transactions posted in the ledger is based on this particular system of accounting.
Acher and Ryan (2016) suggest that the out of the two system of accounting cash basis of
accounting is a system where revenue is recognized and recorded only as when the cash is
received. The cash basis of accounting methods is also used in the Computerized accounting
system where transactions is only consider at the time of the receipt of the same rather than
considering the transaction gets due in a business. As accrual basis of accounting is used in the
book keeping system where transaction is recorded when it gets due.
John (2010) says that in accrual cost accounting system; costs are compared against revenues to
ensure the timely recognition of the same. There are various advantages of the automatic
accounting systems are mention as below:
1) Time and Cost Efficient- Enterprise resource planning is a type of computerized accounting
system saves time and money for organizations by helping them prepare better financial reports
and keep the business organized. The use of such an accounting system will helps in feeding the
raw information into the system in a convenient manner to generate the final outcomes in shorter
span of time. Time plays an integral role in decreasing market competition as an entity will
provide services to its clients in lesser time than its rivals as this system helps in reducing staff
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time and prepares accounting reports on time while also reducing audit expenses. It also helps in
maintaining the records up to data and accurate.
2) Accuracy and systematic organization-It enables the business to stay organized and be
accurate by meeting difficulties of the banking sector in order to curb the existing competition by
helping employees in inputting the information easily. Employees can look up the financial
information whenever needed and it make less room for errors as the accounting entries for each
transactions are needed each time rather than that of a manual system. Thus, better accuracy is
achieved as the accounting records are automatically updated so account balances are up to date.
3) Storage and Speed-Accounting system is vital for business as it helps the organizations to
store precious information as and when they are entered. Bank sohar can take backup of all its
banking information as they contain the sensitive information of all its accountholders f different
kinds of investment such as savings bank account, current accounting, fixed deposit, recurrent
deposit and most importantly details of the Central bank. The computerized accounting system
provides the ability to see the real time financial statements and positions which increases the
speed when compared to manual accounting systems used earlier.
4) Distribution- The system of computerized accounting allows banking firm to segmenting the
overall financial statements by creating groups to prioritize between the overall monetary data in
a spontaneous manner. Financial statements are generated directly from the system and
distributed to external users and internal staff to those needing such information (Villiani and
Rose 2016).It makes is very convenient as the reports are produced and can be monitored better
which can help in better performance for business. For example, if there are outstanding
liabilities or creditors due to be paid, the trail balance and profit and loss accounting will provide
information and help in better controlling such activities on time. Different kinds of frauds can
be identified with the help of this system which helps in minimizing due to effect of
computerized accounting system which enables better accuracy of financial reports to be
presented to meet the relevance and faithful representation of the financial statements.
2.4 Functions of Computerized Accounting System
Before implementing any accounting software package, firstly an entity will search for the
business function and its various set of contracts from various participants, employees,
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shareholders, customers, creditors, auditors. It is essential that each party in the contract agrees to
contribute resources. For example, employees and managers contribute skills, shareholders and
creditors contribute capital, suppliers provide raw materials, customers provide cash and auditors
check the financial statements and internal audit system. (Cheng, 2012) But for organization to
succeed, adopting technology such as advanced Computerized Accounting system ensures that
necessary information is assembled, implemented, enforced and modified.
First and foremost function of the customized accounting software is that it devises a system for
measuring the contributions made by each agent. Another function this computerized accounting
system is that is measures, records and controls the outflow of resources from the organization.
Payroll and other benefits for employees can be easily monitored using computerized accounting
system, accounts payable and tax accounts can also be monitored easily to know the outflow of
resources. The third function of the Computerized accounting system is that it compares the data
of resource inflow and outflow and aids the preparation of reports according to accounting
policies (Porter, 2012).
Comparison reports is generated through enterprise resource planning where comparative reports
to track the inflows and outflows of resources of very individual transactions and entries which
helps to evaluate the financial statements in a proper manner. Finally, the accounting system
helps assemble and maintain the financial statements for various users in labor market such as
labors managers, customers, investors etc. All the people participating within the firm get to
know their best interests and prepare budget plans, a business plan which helps to assess the
costs and benefits and reduces the chances of breakdown by providing minimal information with
primary disclosure (Norton, 2012).
2.5 Impact of Computerized Accounting System on Financial Reporting
This literature is focuses on showing the impact of the accounting system on the monetary as
well as non-monetary performance of an entity. Financial reporting is a process of presenting
financial information or data about company's financial position, operating performance and cash
flow of funds during the accounting period (Gill, 2012). Standard set of the financial statements
such as statement of financial position, statement of comprehensive income, statement of cash
flows and also to provide useful information to users for making decisions. The implication of
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financial reporting is that the financial information helps in timely evaluation of amounts and
uncertain the source of funds. In a case study conducted by (Lim, 2013) focused on the use of
Computerized Accounting System in financial reporting in private banks in UK. The study
revealed Computerized Accounting System helped them gain a competitive advantage by being
able to generate relevant and useful reports through efficient processing of accounting data.
Thus, there are numerous benefits of Computerized Accounting System as it aids in useful
financial reporting and decision making by users.
According to Unnikrishnan (2012), understanding the quality of financial reporting enables the
users to perceive the significance of financial information. SAP accounting package is that
system which meets the daily accounting along with the legislator requirements of an entity with
the help of financial reporting standards of an international level. International accounting
standards adds that the information to users must not be excluded or make it difficult for users to
understand. It provides a basis to evaluate the firm performance during the period by discharging
responsibility to owners of the firm. The influence of Computerized Accounting System aids the
financial reporting process by linking the benefits of applying computer systems while
generating financial reports.
Execution of computerized Accounting System, the presentation of reports can easily simplify
and prepared at regular intervals with ease (Chan, 2012). With the unique feature of updating of
the system as according to the changes takes places in the market as the financial reports will be
generated quickly with the help of Computerized Accounting System and can also be updated
any time on a timely basis. On the contrast, due to business expansion and globalization, there
will be a substantial number of increases in real time transactions and maintenance of
Computerized Accounting System is thus essential to financial reporting process. Computerized
Accounting System can achieve better quality of financial reporting (Weil, 2013).Computerizing
ledger, payroll and other accounting tasks can increase efficiency. Amveko, A. (2011) stated that
computerized accounting saves time on transaction leading to better quality of financial
reporting. Thus the general ledger, payroll and other accounting tasks are increasingly becoming
more efficient .The high end user satisfaction due to the better quality in financial reporting
results in better shareholders investments and satisfaction.
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However, Kranacher, and Riley (2016) stated that the quality of accounting information and
performance of accounting systems is often a major concern for management. By employing
Computerized Accounting System ensures that the delivery system of accounting information
can be reliable to users, protecting the risks which were raised earlier due traditional manual
system of accounting.
2.6 Role of Computerized accounting system in Fraud Prevention
According to Association of Chartered Accountancy and Institute of Public Finance, Fraud is
defined as intentional mistake committed by an individual with a motive to hurt another parts is
considered as a crime as in the case of this study the intentional distortion of financial statements
for gain or other harmful purposes. The chances of occurring risks is higher in the manual
accounting system as the link of occurring the fraud in an entity is un-identifiable by an
individual as everyone can manipulate with the system. It is due to irregularity or illegal internal
control system of managing manual records due to manipulation, falsification and alteration of
documents or figures.
Acher and Ryan S. (2016) stated that this system helps an organization by employing better
internal control systems to avoid such fraudulent activities. Thus, computerized accounting
system ensures less fraud risks as everything is managed online and reports are stored on the
server. Custodian of responsibilities is adopted by the banking industry where the daily changing
of the responsibilities of all the workers in a bank to check the work of a previous employee by
new employee to know the frauds or errors in the system made by earlier employee. In this way,
bank will keep track on its current business practices to get rid of all the working difficulties. The
level of safety increases due to such computerized accounting system which tracks all the
information and detects frauds. Employees within the organization can temper with the computer
system in place and leak confidential information which can be greater fraud of the misleading
accounting information (Warren 2015). Thus a proper internal control system is required to
ensure the accounting entries are properly entered and not omitted as a result of employee’s
manipulation of accounting entries. Thus, human intervention in a computerized accounting
system needs proper internal and auditing to ensure errors are reduced and fraud is reduced.
Similarly, Researchers such as (Francis, 2013) stated that Computerized Accounting system
prevents accounting errors by providing internal and external users truthful information.
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Bank will uses separate cell of customer to deal with all the queries of its customers by offering
personal advice on the selection of various banking products according to the investment
portfolio of the firm. The computer networking of different branches of a bank improves the
customer service as all the data is managed and extracted to maintain the accounting operation in
particular point of time. It is also evident from the Research that apart from the role of
computerized Accounting system in fraud prevention have strong internal control systems to
prevent any unnecessary frauds and monitor the online transactions. Through computerized
accounting replaces manual processing with automation which helps to reduce any fraudulent
activities made by staff. Computerized accounting systems enable better control and integration
of data as well as automated verification (Ahmad, 2013)
2.7 Role of Computerized accounting system in risk minimization and Bank’s performance
Ware (2015) suggest that the aim of this study is to identify the participation of the computerized
system of accounting in eliminating all the existing and the potential risks faces by bank sohar in
the banking industry. This examines the role of accounting systems in judging the effectiveness
of keeping of the accounting records to conclude the end results of using this system. It also
helps in gaining inherent advantage while minimizing the risk involving the daily banking
operations. Furthermore, by the bank abiding by the market trends and banking guidelines can
further help in minimization of the risk encountered during the daily banking activities. Oyanda
(2016) argues that today in the banking industry, the issue at the moment is not about evading or
minimizing the business or financial losses but it is about dealing with the prospects.
As stated by Byrnes, 2015, advised that the computerized accounting system will helps in
improving the overall performance of an entity in generating financial reports of the Banking
industry. The development and adoption of the computerized accounting systems led to more
refined and systematic auditing approaches aims to ensure that the accounting system of the
organization is generating the better reports. This is also helpful in protecting itself from the loss
incurred in an entity. It is critical for the organization to protect itself from loses and risks by
relying on effective risk management systems that help in identification, measurement and
evaluation of the potential sources of losses. Furthermore, it has been noted that accounting
systems not only speed up the process of recording of the transactions, they also minimize the
risk of recording the transactions into the wrong accounts.
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According to the study of Ige (2015) advancements takes places in technological area affected
the overall performance of the banks in terms of networking, service delivery, profitability and
the degree of customer responses. It has been argued that technological innovation like
computerized accounting systems have the potential of significantly improving the
Organizational performance, enhance its process as well as improve the overall accounting
systems in the banks. Ige (2015) further adds that with the increasing competitive nature of the
banking industry, the banks are forced to examine their performance for survival and its reliance
on the overall efficiency of its operations.
(Cooper and Palmer, 2013) proposes that the simplicity and usefulness of the system would be
the main reasons for the banks to adopt the innovative technologies like computerized
accounting systems. The author as concluded that positive performance of the company is the
final output behind the adoption of computerized accounting systems as it positively impacted
the banking operations in terms of enhancing its speed and efficiency of the workers.
Computerized accounting systems have been able to positively transform the traditional banking
practices by adding the benefits of technology and contributing to the improved performance of
the bank.
2.8 Variables identified in the study
Dependent Variable Independent Variables
Computerised Accounting System
Quality financial reporting
Risk Reduction
Fraud Prevention
Bank Performance
Section 3: Research Methodology
3.1 Introduction
This chapter will discuss the Research design, Methodology, sample size and sampling technique
used for data collection and the various instruments employed within this Research on topic
impact of computerized accounting on financial reporting and fraud prevention in Bank Sohar.
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This chapter will give a holistic view on how the research will be conducted. Data will then be
analyzed based on the findings and suggestions will be made to the management.
3.2 Data collection Method
The data collection Method which will be used for this Research will be based on primary data
collection methods which will include first hand information which will be collected with the use
of self administered questionnaires survey method within Bank Sohar. Moreover, even
secondary Research will be used for this research from previous financial reports, annual reports,
company profiles, and other publications on the internet about Bank Sohar to know more about
the use of the computerized accounting system and its impact of financial reporting and fraud
prevention.It will help to test the dependent variable which is Computerized Accounting in
relation to its independent variables such as Financial reporting, Frauds prevention and Bank
Performance.
3.3Sample Size and Sampling Technique
The sample size of this Research will be 100 respondents which will be targeted based on the
two branches of Ruwi and Qurum. Thus 50 employees will be selected from Ruwi branch and 50
from Qurum branch and all the employees will be distinguished based on type of the employees
working in bank Sohar whether expert of technology or not to know the efficiency of the
computerized system of accounting in the performance of the bank. Random sampling method is
adopted in conducting this research for collecting information about the usage of computerized
accounting system and their views on the same. This method will provide an equal chance for
each employee to be selected including the general managers in Bank Sohar working in the
respective branches.
3.4 Data Analysis
The questionnaires will be distributed to employees of Bank Sohar working in two branches in
Ruwi and Qurum. Employees working in Bank Sohar will help provide useful information on the
application of computerized accounting on their corporate banking performance and financial
reporting .The questionnaire will test and see the responses on the effective working and use of
computerized accounting system and how it is helping the employees in preparing and presenting
17

better quality of financial reporting, and understand the main benefits of computerized
accounting while also taking into consideration the risk factors of existing computerized
accounting system and their relation with reducing bank frauds with Bank Sohar. The questions
is asked to the accounts departments who handles all the accounting work in the banks to give its
consent about the effectiveness of the accounting system appropriately. Both open ended and
close ended questions will be employed within the questionnaire to understand and gather proper
data from the respondents regarding the effect of computerized accounting system on financial
reporting and fraud prevention
3.5Research Instrument
The scaling technique which is used in this report is of 3 types which are Nominal, Ordinal and
interval scale.
Section 4: Data Analysis
This chapter discusses the interpretation and presents the findings. The purpose of this study was
to analyze the effect of computerized accounting systems on financial reporting within Bank
Sohar.The researcher made use of frequency of tables and figures to present the data. The
descriptive results obtained for this study were based on distribution of questionnaires and
respondents profiles based on age, gender and experience with the bank. The dependent variable
which was computerized accounting was used to compare with other variables such financial
reporting, profitability, fraud detection and prevention and possible challenges of the same. The
primary data which was collected from the questionnaires given to respondents will be evaluated
to give the research a proper data analysis. The presentations tools used for the research were pie
charts, bar diagrams to display the findings properly. Finally recommendations have been
suggested based on the findings to improve any drawbacks related to computerized accounting
system.
4.1 The demographic data of the respondents
4.1 Ages and the gender of employees working in Bank Sohar
18

Age Male Female Number Percentage
21 years - 25years 9 6 15 15%
26 years – 35years 22 14 36 36%
36 years – 50years 18 24 43 42%
Above 50years 4 3 7 7%
Total 53 47 100 100%
Table (1):Age and genders of represents in Bank Sohar.
21years - 25years 26 years – 35years 36 years – 50 years Above 50 years
0
5
10
15
20
25
30
Male
Female
Figure 1 Bar chart showing Age and genders of respondents working in Bank Sohar.
The bar chart above reveals the ages and gender of people working in Bank Sohar. The results
revealed that 15% respondents working in Bank Sohar were between the age of 21-25 years who
took part in this research regarding the impact of computerized accounting on financial reporting
and fraud prevention. While, there were 36% respondents between the age of 26-35 years
working in Bank Sohar. Similarly, 42% respondents were between the age of 36-50 years old
19

which consisted the highest as they were the most senior people working in Bank Sohar who
took part in this study, while only a 7% respondent were 50 years and above of which few were
senior managers of different departments within Bank Sohar.
4.2 Respondents from Different departments in Bank Sohar
Type of Departments Frequency Percentage
Accounts 6 6%
Human Resources 4 4%
Finance 28 28%
Operations 20 20%
Marketing 6 6%
Information Technology 12 12%
Treasury management 15 15%
Risk Management 8 8%
Total 100 100%
Table 4.2 Employee designations in Bank Sohar
20

Finance
Accounts
Human resource
Marketing and Sales
Operations
IT
0 5 10 15 20 25 30 35
Types of Departments
Number
Figure 4.2 Employee Designations in Bank Sohar
The results from the Pie chart show that majority of respondents for this study are from
accounts, operations and finance department as they are the ones who constantly deal with the
computerized accounting system .The results also indicate that 28% respondents are from
finance department , 20% from both operations and accounts and 12% from IT department.
Similarly, only a few respondents were selected from marketing and human resource department
due to the limited use of computerized accounting system in these respective departments. A
different kind of employee’s participation in bank Sohar reflects the usage of the computerized
accounting system in comparison with the designations of all the employees.
4.3 Years of Employee service within Bank Sohar
Employee
service duration
21-25 26-35 36-50 Above 50 Percentage
Less than 2 years 12 6 4 0 22%
3-5 years 3 18 16 0 37%
More than 5 years 0 12 22 7 41%
21

Total 15 36 42 7 100%
Table 4.3– Age and genders with service duration of employees in Bank Sohar.
Less than 2 years 3-5 years More than 5 years
0
5
10
15
20
25
21-25
26-35
36-50
50 and above
Figure 4.3 Bar chart showing the service duration of employees according to genders in
Bank Sohar.
The bar chart shows the experience of employees with Bank Sohar Experience of an employee in
bank sohar shows the involvement of all the employees and also reflects its experience of
working with the different business practices. Senior employee has higher experience than newly
enrolled candidate so the implementations of the computerized accounting system in an entity
will target all the senior employees to get comfortable with the business practices. The results
indicate that about 22% respondents currently working with Bank Sohar have less than 2 years of
experience while 37% respondents indicated that they have 3-5 years of service duration with
Bank Sohar of which majority were between the age group of 26-35 yrs and 36-50 years.
Whereas, on the other hand, there were 41% respondents who have more than 5 years of
experience with Bank Sohar of which majority were between the age group of 36-50 years,
whereas there were only a few 7% respondents who were above 50 years with more than 5 years
of experience working with Bank Sohar.
4.4 Impact of Computerized Accounting on Financial reporting in Bank Sohar
22

In your opinion does Computerized
Accounting improve the quality of
financial reporting within Bank Sohar?
Responses
Yes 76%
No 24%
%55
%45
Impact of Computerized accounting on financial
reporting
yes
no
Figure 4.4 Employee responses towards effect of CAS on financial reporting in Bank Sohar
This is one of the important finings that helps in considering the computerized accounting system
by knowing the opinions about all the individuals working in an entity before executing the
same. This pie chart indicates that 76% of respondents working in Bank Sohar stated that
computerized accounting had a significant impact on the quality of their financial reporting while
the remaining 24% also stated they were not satisfied with the existing computerized accounting
system in place within Bank Sohar. Thus overall, majority of employees were satisfied with the
existing computerized accounting system in place in Bank Sohar as it allowed them to prepare
and present better financial reports, income statements and trail balance.
23

4.5 Importance of Adopting Computerized Accounting within Bank Sohar
Importance of
Computerized
Accounting in Bank
Sohar
Male Female Total Percentage
Accurate and timely report 19 23 42 42%
Large number of
transactions and
voluminous activities
12 6 18 18%
Efficiency and
effectiveness
18 14 32 32%
Cost 6 2 8 8%
Total 53 47 100 100%
24

Accurate and
Timley report Large number
of transactions efficiency and
effectiveness Cost
0
5
10
15
20
25
Male
Female
Figure 4.5 bar chart showing importance of CAS
Depicting different features of the computerized accounting system helps in reflecting the
significance of this system by comparing its usage by gender of the employees. The analysis says
that the accuracy and timely completion of the report is higher among female employees than
male employees as they are more determined towards their work than male members. On another
hand, patience level of male employees are higher as compared to the female employees as they
can handle large number of transactions feeds into the system as woman focuses on the a
accuracy level so they require time to feed the system. Overall efficiency of the male members in
Bank sohar is greater than the female employees as they can lead the large number of team,
feeding higher volume of transactions, able to do field work which reflects its overall
effectiveness. In terms of costs male employees increases the costs of the business as against the
female which needs to be improved before implementing the computerized accounting system.
The bar chart shows the importance of computerized accounting system within Bank Sohar and
according to the data, it shows that 42% of respondents of which 19 % were males and 23%
males stated that Bank Sohar is able to produce accurate and timely report with computerized
accounting system. Similarly, 32% respondents of which 18% males and 14% females also
stated that computerized accounting helps in Efficiency and effectiveness , while 18% of total
respondents stated it helps to record large number of transactions and voluminous activities.
25

However, only a few 8% respondents stated that computerized accounting is associated with cost
benefits.
4.6 Responses showing the Effect of Computerized accounting on financial reporting
# Statements Agree Disagree Neutral
1 Financial reports are
always generated at the
right time
82 14 4
2 It is easier to compare
financial reports of
different periods using
CAS
85 10 5
3 Financial reports generated
are very reliable and free
from errors mostly.
64 36 0
4 Computerized accounting
aids in better preparation
and presentation of
financial reports which
leads to better decision
making by investors
86 14 0
5 Accounting records are
maintained safely 92 8 0
Table 4.6 Respondents opinion on the effect of computerized accounting
26

Financial
reports are
generated
timley
Easier to
compare
financial
reports using
CAS
Error free
financial
reports
Better
presentataion
and quality of
reports
Accounting
records are
maintained
safely
0
10
20
30
40
50
60
70
80
90
100
Male
Female
Figure 4.6 Opinions of respondents on effect of CAS on financial reporting
The bar chart shows the effect of computerized accounting on financial reporting and according
to the data, 82% respondents stated that financial reports are always generated at the right time
using computerized accounting while 14% disagreed with the same .By showing the reviews of
employees working in Bank sohar about the effectiveness of the computerized accounting system
will help a researcher in making recommendations to the management to improve its existing
performance. Similarly, 85% respondents stated that it is easier to compare financial reports
using CAS while 10% disagreed with the same, while 5% were unsure. On the other hand,64%
respondents stated that Financial reports generated are very reliable and free from errors mostly,
while 3^ disagree with the same.Moreover,86% respondents also stated that Computerized
accounting aids in better preparation and presentation of financial reports which leads to better
decision making by investors while 14% disagreed with the same. Lastly we have 92%
respondents who agreed that Accounting records are maintained safely with the help of CAS
while 8% respondents disagreed with the same.
4.7 Responses showing the financial statements (Reports) generated by computerized
accounting system
27

Reports Frequencies Percentage
Statement of
comprehensive income
20 20%
Statement of financial
position
27 27%
Statement of cash flows 18 18%
Income statement 35 35%
Total 100 100%
Income statement
statement of cash flow
statement of financial position
statement of comprehensive
income
0 5 10 15 20 25 30 35 40
Responses
Figure 4.7 Bar chart showing the types of reports generated using CAS in Bank Sohar
According to the bar chart, a response shows that the types of financial reports mainly used by
employees and users with the aid of computerized accounting. The report generation will depicts
the efficiency or the deficiency of this system in reflecting the growth or declination of the bank
28

sohar from one period to another. According to the data, 35% respondents stated that Income
statement was the most used financial report produced using computerized accounting system,
while 27% respondents also stated that statement of financial position was the most generated
financial statement report deployed with the aid of computerized accounting system. Similarly,
on the other hand, 18% respondents revealed that statement of cash flows was the most common
financial report generated with the help of computerized accounting while 20% also claimed that
statement of comprehensive income was the most used financial report generated financial
report. Thus we can say that computerized accounting has been used in the generation of all the
above mentioned financial reports but some reports required complex tasks which were made
easier and efficient with computerized accounting system for simpler data entry, processing and
reporting of reports within Bank Sohar.
4.8 Analysis of the Impact of Computerized Accounting on Net Profit Ratio
Years Net Profit Revenue Net Profit
Ratio of
Bank
Sohar
2012-2013 17,745 74,369 23%
2013-2014 20,407 76,341 26%
2014-2015 28,453 78,580 36%
2015-2016 34,765 84,478 41%
2016-2017 35,789 85,786 42%
Table 4.8–Table showing Net profit Ratio of Bank Sohar of last 5 years
29

2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
0
5
10
15
20
25
30
35
40
45
Net Profit ratio
Figure 4.8 -Bar Chart showing Net profit Ratio of Bank Sohar of 5 years
Net Profit Ratio =Profit after Tax/Revenue x 100
Net Profit Ratio is a key profitability ratio that shows the amount left over each sale after
all expenses have been paid.
The results from the data reveal that that during the year 2012-2013,The Net profit ratio for Bank
Sohar was 23% and during the year 2013-2014 the net profit was 26%.These ratios were before
the introduction of computerized accounting are much lower compared to the current ratios that
are being achieved by Bank Sohar. The bar data also shows that during the year 2014-2015 the
net profit ratio is 36% which is significantly higher compared to last year’s ratios due to the
effective and efficient usage of computerized accounting which has reduced costs and human
errors and have increase the sales as well as net profit resulting in a higher net profit ratio.
Similarly the data also increased from the year 2015-2016 to a further 41% again due to the
significant spending and training on human resources to collectively make use of the new and
improvised computerized accounting software which has improved the entry of data, verification
of data as well as generating good quality financial reports.
30

By knowing the profitability of the bank sohar, a researcher will able to comment on the current
performance of the company with the help of computerized accounting system.
4.9 Return on Equity and Computerized Accounting
Years Net
Income
Shareholders’
Equity
Return on
equity of
Bank
Sohar
2012-2013 84,093 978,719 8.5%
2013-2014 89,558 1203,321 7.44%
2014-2015 98,851 635,789 15.5%
2015-2016 115,226 666,260 17%
2016-2017 127,351 467,954 27%
Table 4.9–Table showing Return on Equity of Bank Sohar of last 5 years
31

2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
0
5
10
15
20
25
30
Return on Equity
Figure 4.9 -Bar Chart showing Return on Equity of Bank Sohar of 5 years
Return on Equity=Net Income/Shareholders Equity
Return on Equity is a measure of profitability that indicates the amount of profit Bank Sohar is
able to generate with the money invested by shareholders. The cost incurred by an entity using
the computerized accounting system will require enough returns generated by applying this
system soothe return on equity measure is applied to test the caliber of the firm in comparison
with the external tools.
4.10 Role of Computerized Accounting On Coordination and Quality Financial
Performance
Has Computerized Accounting improved
the Coordination and financial reporting
within Bank Sohar?
Responses
Yes 82%
No 18%
32

Table 4.10-Role of computerized accounting on Coordination and Quality performance
Role of
computerized
accounting on
Coordination and
Quality
performance
82
18
0
Yes No
Figure 4.10 Role of computerized accounting on Coordination of activities and quality
performance at Bank Sohar
According to the bar chart, 82% respondents stated that computerized accounting helps to
improve the coordination of all the accounting activities involving from recording the data,
storing and analyzing financial information. Whereas On the other hand, 18% also said they
disagreed with the same. Overall majority of respondents have agreed that computerized
accounting has been efficient to record, store and generate financial reports which has been
useful for employees and shareholders of Bank Sohar.
4.11 Impact of Computerized Accounting on Employees of Bank Sohar
Impact of computerized accounting
on employees at Bank Sohar
Male Female Number Percentage
1.The system has enabled 12 8 20 20%
33

employees to complete trail of
transactions, minimize instant
errors of omission
2. System has been useful in
recording, presenting and
compiling reports and record
journal entries accurately
24 36 60 60%
3.The CAS has helped employees
to show a true reflection of the last
years revenue recognition as well as
the current years financial
statements
37 18 55 55%
4.It has helped users to follow the
accounting principles according to
IFRS guidelines
7 5 12 12%
5.Computerized accounting has
aided in correct calculations and
proper reminders of annual
quarterly payments from customers
20 12 32 32%
34

Complete trail of
transactions,
minimize instant
errors
recording,
presenting and
compiling reports
and record journal
entries accurately
Helps in comparing
current and past
financial
statements
IFRS Guidelines Cas helps in correct
calucations
reminders of
annual quarterly
payments
12
24
37
7
20
5
18
5
12
Male Female
Figure 4.11 Bar chart Rating on the effect of CAS on users and employees at Bank Sohar
The above bar chart shows the impact of computerized accounting on employees of Bank Sohar
and according to the data about 20% of respondents comprising of 12% males and 8% females
stated that computerized accounting system enabled employees to complete trail of transactions,
minimize instant errors of omission. Similarly, on the other hand, 60% respondents stated that
CAS has been useful in recording, presenting and compiling reports and record journal entries
accurately. Moreover, on the other hand, 55% respondents also stated that CAS has helped
employees to show a true reflection of the last year’s revenue recognition as well as the current
years financial statements while 32% also stated that it has allowed employees to in correct
calculations and proper reminders of annual quarterly payments from customers. Thus
computerized accounting has been very useful to employees and users within Bank Sohar to
present their reports in a better manner.
4.12 Impact of Computerized Accounting on Prevention of Frauds in Bank Sohar
Are the number of frauds
reduced due to computerized
accounting in Bank Sohar?
Male Female Percentage
35

Strongly Agree 28 13 41%
Agreed 14 19 33%
Disagree 10 12 22%
Strongly Disagree 1 3 4%
Total 53 47 100
Male Female
28
13
10
10
12
1
3
Strongly Agree Agree Disagree Highly disagreee
Figure 4.12 Bar chart showing the Impact of Computerized Accounting on Prevention of
Frauds
The results revealed that 41% respondents comprising of both males and females strongly agreed
that the number of frauds had reduced due to computerized accounting, while 33% respondents
also agreed to the same. Thus majority of respondents have agreed that computerized accounting
has reduced their number of errors. Computerized accounting has allowed employees to generate
better financial reports and make better decisions as the system highlights any errors and informs
the user which makes them get reliable results during data entry and analyzing the reports. On
the contrast, there are also 22% respondents who have disagreed that the numbers of frauds have
36

reduced due to computerized accounting and 4% have strongly disagreed to the same. Thus
based on the response, the accounting errors have mostly been resolved due to computerized
accounting but the human errors still exist which lead to frauds.
4.13 Types of Frauds occurring in Bank Sohar due to Computerized Accounting
Which Types of Frauds
frequently occur? Strongly
Agree Agree Disagree Strongly Disagree
Error of Omission 13 6 76 4
Accidental entry of data 65 32 3 0
Misapplication of
accounting Policies 7 12 35 44
Manipulation of records 54 26 11 9
Password sharing
integrity 16 28 45 11
Private information
leaked by employee 12 23 52 13
Table 4.13 Opinion of respondents on types of frauds most occurring in Bank Sohar
37

13
65
7
54
16 12
10 12
26 28 23
76
3
35
11
45 52
4 0
44
9 11 13
Strongly Agree Agree Disagree Highly disagreee
Figure 4.13 Bar chart showing most commonly occurring frauds over the past years
The data shows that the most commonly occurring Types of Frauds in Bank Sohar due to
Computerized Accounting over the past years According to the bar data,76% respondents
disagreed that errors of omission type of fraud occurs due to computerized accounting system in
place, while 13% strongly agree and 6% agree to the same.Simlarly,65% respondents have
strongly agreed that accidental entry of data is one of the major types of frauds happening due to
computerized accounting system in place while 32% also agreed to the same while only a few
disagreed.Moreover,44% respondents have also strongly disagreed that Misapplication of
accounting Policies led to frauds in computerized accounting system, while 35% respondents
also disagreed to the same. On the other contrast, there were more number of frauds happening in
previous years due to Manipulation of records with about 54% respondents stating that
manipulation of records have happened more during the year 2015 especially by those
accountants who were looking to manipulate the results to gain more bonus which led to false
quality of financial reporting. On the other hand,28% respondents have agreed that Password
sharing by employees in past has led to identify theft issues as a illegal things have been carried
out by other fellow employees during work hours, while 16% also strongly agreeing this being a
major fraud and 45% disagreeing with the same.Lastly,12% respondents have stated that private
information leaked by employees moving on from Bank Sohar to other banks have resulted in
38

significant frauds over the past years, while 23% also agreeing to the same and 52% respondents
disagreeing that frauds related to private financial information leaked have occurred less due to
computerized accounting but more due to employee unhappy with their designation or salary
issues resulting in such frauds while 13% also strongly disagreed to the same.
4.14 Measures for preventing Frauds Related to Computerized accounting in Bank Sohar
Measures taken to reduce
frauds Strongly
agree Agree Disagree Strongly disagree
Implementing better internal
controls 36 45 13 6
Educating and training
employees. 48 32 15 5
Assessing fraud risks on
regular basis 67 20 8 5
Conducting surprise Internal
Audits 8 7 28 58
Total respondents 100
Total percentage 100%
39

Implementing
better internal
controls
Educating and
training
employees.
Assessing fraud
risks on regular
basis
Conducting
surprise Internal
Audits
36
48
67
8
10
20
7
13 15
8
28
6 5 5
58
Strongly Agree Agree Disagree Highly disagreee Column1
Figure 4.14 Measures to Preventing frauds related to computerized accounting in Bank
Sohar
The data reveals the Measures for preventing Frauds related to computerized accounting in Bank
Sohar. The results revealed that 36% respondents strongly agreed that implementing better
internal controls was one of the best ways to prevent frauds happening in Bank Sohar with
computerized accounting system in place, while 45% also agreed to the same and 13%
respondents disagreed and 6% respondents strongly disagreed to the same.Moreover,48%
respondents also stated that educating and training them on the new computerized accounting
system helped them to reduce errors while entering, recording information as well as
summarizing and evaluating the data, while 32% also agreed to the same and 15% respondents
disagreed to the same and 5% respondents strongly disagreed. On the contrast,67% respondents
clearly stated that Assessing fraud risks on regular basis helped them to prevent frauds related to
computerized accounting, while 20% also agreed with the same while only a few respondents
disagreed with the same.Lastly,58% respondents strongly disagreed also stating that conducting
regular surprise internal audits will put more pressure on their work as they will have to be more
alert to reduce unnecessary errors and 28% also disagreed with the same. Thus, we can say that
implementing better internal control system and assessing fraud risk parameters on a regular
basis; Bank Sohar can reduce the number of frauds taking place and minimize the same.
40

4.15 Challenges faced by Computerized accounting system in Bank Sohar
# Challenges faced with
CAS Strongly
Agree Agree Neither
agree nor
disagree
Disagree Strongly
Disagree
1 Costs such as training
and software updates 46 16 7 18 13
2 Virus or malware 67 32 0 1 0
3 Accidental entry of
wrong data 28 37 10 19 6
4 Errors in software 13 7 0 47 33
41

Strongly Agree Agree Disagree Strongly Disagree
46
16 18
13
67
32
1 0
28
37
19
6
13
7
47
33
High Training ad Software Costs
Virus/malware
Accidental entry of wrong data
Lack of segregation betwePrivacy of confidential informationen duties
Errors in software
Figure 4.15– Challenges with Computerized accounting system in Bank Sohar
The bar chart shows the major challenges faced by computerized accounting system within Bank
Sohar with 46% respondents stating that the costs related to training and software updates pose a
major challenge to Bank Sohar as they have to constantly train and educate their employees on
changes happening in the computerized accounting system, 16% respondents agreeing with the
same while 7% were neutral and remaining disagreed with the same. Along with the opinions of
all the employees working in an entity by using the computerized accounting system’s technical
reviews by the entire technical expert to get to know the effectiveness of the system.
Section 5: Summary and Conclusion
5.1 Summary of findings
42

This chapter presents the summary of findings arising from data analysis to understand the
impact of computerized accounting on financial reporting and Fraud prevention within Bank
Sohar. The findings will also include the opinion of employees and users on computerized
accounting and understand the effect of it on bank performance and banking operations. The
types of challenges and frauds will also be evaluated and recommendations for effective
implementation of better management of computerized accounting will be suggested.
The summary of the above research says that an opinion of all the internal and the external
parties associated with the bank sohar is important to conclude this particular research. The
efficiency and the effectiveness of the computerized accounting system reflect the performance
of an entity. Increasing or decreasing performance of an entity is depicted with the framework of
the system.
2018
Mean 489.9894
Standard Error 164.7078
Median 16.17
43

Mode 0
Standard Deviation 960.4032
44

Sample Variance 922374.3
Kurtosis 1.662429
Skewness 1.820149
Range 2926.56
Minimum -2.48
45

Maximum 2924.08
Sum 16659.64
Count 34
Confidence Level (95.0%) 335.1005
2017
Mean 401.8583
Standard Error 137.3475
Median 0
46

Mode 0
Standard Deviation 868.6618
47

Sample Variance 754573.3
Kurtosis 2.876076
Skewness 2.105902
Range 2843.48
Minimum -0.66
48

Maximum 2842.82
Sum 16074.33
Count 40
Confidence Level (95.0%) 277.8115
Above mention statistical table helps in determining the efficiency of the Bank Sohar by using
the computerized accounting system. The measure of central tendency and dispersion is used to
assess the effectiveness of this tool in generating higher results for the bank. The mean value of
the profitability of an entity is increasing from 2017 to 2018 shows the actual condition of the
firm that Bank Sohar’s profitability gets affected by utilizing CAS tool which proves as an
integral measure in boosting its overall performance.
5.2 Recommendations
1.)It is recommended that in order to improve the computerized accounting system an entity
require Unique Log in Id and passwords given to all the employees related to the accounts
department to get rid of any viruses or malwares thereby reducing the number of frauds which
might happen due to such computing errors in the accounting process. This should be done so
that the computerized accounting system can operate on the expectation of the management and
other users.
2.) It is also suggested that to introduce online virtual classroom training sessions to improve the
overall productivity of all its employees and off the job workshops to improve the staff
49

performance so that they can handle all the transactions and improve on the accuracy and be
more reliable in their financial reporting.
3.) Robotics system will implement in the organization where each and every transactions feeds
into the system is checked further by these machine robots to avoid any problems and frauds.
4.) Standard limit of payment is set by the bank as by reaching that limit of payment, the initials
of the authorized authority will require to approve the payment to know the frauds occurring in
the business. To ensure the safety of the information, Sohar bank will uses cloud computing is
used along with the cryptography to get rid of all the confidentiality the back of the information
issues. Through cloud computing an entity can take back up of all their resources with the help of
internet to avoid the stealing of the same and also uses cryptography in which private key is used
to use the information only by the authorized persons.
5.3Conclusion
Thus concluding this report, the findings revealed that it is evident that computerized accounting
system contributes effectively towards financial reporting in Bank Sohar as they are able to
record, store and analyze the financial report in time. It was also evident that the financial reports
generated were of greater quality, reliable, accurate as well as very efficient due to computerized
accounting system. In Bank Sohar which improved their bank performance which was indicated
by the increase in both net profits and return on equity. But there was still an element of human
errors which were caused in computerized accounting system and led to minor frauds. The
number of frauds and accounting errors were reduced as a result of computerized accounting
system in Bank Sohar. The frauds which were more frequently taking place in Bank Sohar were
accidental entry of data and Manipulation of records by users which impacted the quality of
financial reports and net profit and overall revenue .Also confidential financial information was
leaked which resulted in again a greater risks while dealing with computerized accounting
system. The findings also revealed that the major issues involved within computerized
accounting
The major issues involved with computerized accounting system are major costs involved in
training and software updates as well risks of getting virus, malwares and accidental entry of data
50

.To tackle the challenges it was recommended to provide training to employees working in Bank
Sohar as they need to improve their knowledge and skills while working as well as enhance the
level of security by backing up data and using Antivirus software to protect the financial reports.
The challenges encountered with adoption of computerized accounting is less when compared to
efficiency it brings to the overall banking operations in Bank Sohar and expedites service
delivery and providing greater flexibility. The researcher also aids the research and sides with the
findings of the study to conclude that computerized accounting has led to improvement in
financial reporting due to the advantage it offers to the bank.
WORD COUNT: 10148
Appendix: Research Questionnaire
This questionnaire is designed for academic purpose and to gain more understanding on the
impact om the study being undertaken on the influence of computerized accounting on Financial
Reporting and fraud prevention. The questionnaire is divided in four sections making a total of
35 questions. The researcher will keep your responses confidential so you can rest assured about
its safety. The researcher thanks you for being part of this survey and necessary support for
answering the questionnaires to the best of your knowledge. Please kindly answer the questions
by placing a tick to your responses. Thank you for being part of this survey.
Section A: Demographical information of respondents (Please tick where appropriate).
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1.) Gender a) Male ( ) b) Female ( )
2.) Age a) 21 – 25 ( ) b) 26 – 35 ( ) c) 36 – 50( ) d) Above 50 ( )
3.)How long have you been in service with Bank Sohar?
a) Less than 2 years
b) 3-5 years
c) More than 5 years
4.) In which department do you currently work at Bank Sohar?
a.) Operations
b.) Accounts/Audit
c.) Administration
d.) Marketing
e.) Operations
f.) Finance
Section B:Impact of Computerized Accounting on Quality of Financial Reporting
5 .) In your opinion does Computerized Accounting improve the quality of financial
reporting within Bank Sohar?
a) Yes
b) No
6 .)Which of the following factors have informed the Bank’s decision to adopt a
computerized accounting system?.
a.) Accurate and timely report
b.) Large number of transactions and voluminous activities
c.) Efficiency and effectiveness
d.) Cost
7.)If yes, then how does computerized accounting improve financial reporting to Bank
Sohar ?
# Statements Agree Disagree Neutral
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1 Financial reports are always generated at the right
time
2 It is easier to compare financial reports of different
periods using CAS
3 Financial reports generated are very reliable and
free from errors mostly.
4 Computerized accounting aids in better preparation
and presentation of financial reports which leads to
better decision making by investors
5 Accounting records are maintained safely
6 Improves business performance
8) What kind of Accounting system is used within Bank Sohar?
a.) Cash basis
b.)Accrual basis
9) Which of the following factors affect Audit effectiveness in computerized accounting
system within Bank Sohar? To what extent do you agree that the following factors affect
audit and financial reporting effectiveness?
Audit and financial
reporting
effectiveness in
CAS
Strongly
Agree
Disagree Neutral Agree Strongly
Agree
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Knowledge of
computerized
accounting system
The risk assessment
Quality of Audit
planning judgements
10.) Does the use of computerized Accounting improve coordination and quality
performance among banking operations within Bank Sohar?
a.) Agree
b.)Disagree
11.) What is the level of efficiency achieved between the year 2012-2017 in terms of
reliability of financial statements within Bank Sohar?
a.)Reliable
b.)Not reliable
c.)Moderate
Q12.)How has the use of computerized accounting affected the users and employees of
Bank Sohar ?
a.)The system has enabled employees to complete trail of transactions, minimize instant
errors of omission
b.)System has been useful in recording, presenting and compiling reports and record journal
entries accurately
c.)The CAS has helped employees to show a true reflection of the last years revenue
recognition as well as the current years financial statements .
d.) It has helped users to follow the accounting principles according to IFRS guidelines
e.)Computerized accounting has aided in correct calculations and proper reminders of annual
quarterly payments from customers.
Section C: Effect of Computerized Accounting on fraud prevention
13.) Which of the following reports does your computerized accounting system provide?
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a) Statement of Financial Position( )
b) Cash flow statement ( )
c) Income statement( )
d.)Balance sheet ( )
e.) Vat Returns ( )
f.)Payroll Analysis ( )
14.) Are the number of frauds reduced with better computerized accounting system in
place within Bank Sohar’s banking operations?
a.)Agree
b.)Strongly Agree
c.)Disagree
d.)Strongly disagree
15.) Are training programs organized for staff to get trained on operating the software
packages ?
a) Yes ( )
b) No ( )
16.) Have the number of frauds reduced from the year 2012-2017 after the adoption of
computerized accounting system?
a) Yes ( )
b) No ( )
17.)What are the kind of frauds which have taken place within Bank Sohar recently and in
previous years while working on computerized accounting system?
a.)Error of Omission
b.)Accidental entry of data
c.)Misapplication of accounting Policies
d.)Manipulation of records
c.)Password sharing
d.)Private information leaked by employee
18.) What kind of measures are put in place for preventing frauds within Bank Sohar?
a.)Implementing better internal controls
b.)Educating and training employees
c.) Assessing fraud risks on regular basis
d.)Conducting surprise Internal Audits
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Section D: Challenges Faced by Computerized Accounting System
19)What problems does Bank Sohar face in terms of computerized accounting system ?
# Challenges faced with
CAS Strongly
Agree Agree Neither
agree nor
disagree
Disagree Strongly
Disagree
1 Costs such as training
and software updates
2 Virus or malware
3 Accidental entry of
wrong data
4 Lack of segregation
between duties
5 Privacy of confidential
information
6 Errors in software
20.)What other problems does Bank Sohar face in regards with the use of computerized
accounting system within the departments?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
21.)What is the level of security in computerized accounting within Bank Sohar?
a.)Very low
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b.)high
c.)Very low
d.)very high
e.)Moderate
22.) Lastly, how has computerized accounting helped in reducing risks over the past years?
a.)Helped in reducing risks as Computerized accounting system has been effective
b.)increased the risks by relying heavily on Computerized accounting system
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BASED INTERNAL AUDITING IN HOMA BAY COUNTY GOVERNMENT, KENYA.
MASTER OF BUSINESS ADMINISTRATION. SCHOOL OF BUSINESS
UNIVERSITY OF NAIROBI.
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