Investment On Accounting Information System (iais) Effect On Bank Performance A Case Of Private Commercial Banks In Ethiopia

The main aim of this study is to assess the impact of Investment made on Accounting Information Systemrnand its effect on Banks performance in the case of private commercial Banks in Ethiopia. In order to fulfillrnthe stated objective an exploratory research design with a quantitative panel data was used. To this end,rnthe researcher relied on consecutive ten years Annual Audited Financial Report of selected seven PrivaternCommercial Banks in Ethiopia using a purposive sampling method for the period 2005 – 2014.rnThe study employed a multivariate regression model using Return on Asset (ROA), Return on Equity (ROE)rnand Productivity (PROD) as a dependent variable for measuring the financial performance of the selectedrnBanks and three independent explanatory variables used as a component of Accounting InformationrnSystems; Infrastructure, software and Services.rnThe researcher also controlled for the effects of size (measured by log of total assets). Based on a balancedrnpanel constructed ordinary least squares (OLS) and random effects, the study finds that Investment onrnAIS’s services provided by IT personnel payroll, hiring, training, evaluating and related costs has arnsignificant and positive impact followed by investment on AIS’s software which was consistent with thernresearcher’s expectation. While Investment on AIS’s infrastructure was found to have a negative butrninsignificant impact. The remaining variable, SIZE had positive but insignificant effect on theirrnperformance. The overall results revealed that Investment on AIS have a significant impact on the financialrnperformance of Private commercial Banks in Ethiopia.rnHence, based on the findings of the study the researcher conclude that, performance of infrastructure wasrnnot productive as expected and should have to consistent with the quality of AIS’s service and appropriaternimplementation of AIS’s software.rnFinally, as was indicated in the scope and limitation section this study was only confined to the Privaterncommercial Banks in Ethiopia. Hence, the study could be further enhanced by including the State ownedrnbanks. The study could also developed by including more independent and control variables to thernregression model. Moreover, if further studies should supplemented with qualitative data, the findingsrnwould be more informative.rnKey words: Investment on Accounting Information System, Private Bank Performance, Panel, Ethiopia

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