Abstract:
Financial performance is a critical turning point for prosperity of any financial
institution. Many Accounting Information system (AIS) have been adopted and used to
ensure effectiveness on financial performance. Currently, most organizations continue
to increase spending on information system and their budgets continue to rise.
Accounting Information system (AIS) provides financial institutions like SACCOs an
orderly, efficient scheme for providing accurate financial information and controls.
This normally has effects on the financial performance of an institution, either
positively or negatively. This research work sought to examine the effects of accounting
information system, on financial performance of SACCOs in Nyeri County.
Specifically, the research sought to: establish the effect of financial reporting systems
on financial performance of Saccos in Nyeri County; determine the effect of inventory
management systems on financial performance of the Saccos in Nyeri County; and find
out the effect of budgetary control systems on the financial performance of Saccos, in
Nyeri County. The research findings provided knowledge on the financial performance
of the SACCOs based on the AIS integration, since AIS effects have not been
extensively assessed, the concept of AIS being one of the latest innovations. The
research was of key importance to the Saccos as well as other financial institutions in
terms of determining the benefits accruing due to the integration of accounting
information systems in their operations. A pilot test was conducted to ensure the tool’s
validity and reliability. Statistical Packages for the Social Sciences version 24 was used
to analyze data using descriptive analysis and inferential statistics. Ethics were followed
before, during and after the study was completed. Descriptive research design was used
in this research whose target population was the over 180 employees of the six (6)
SACCOs identified in Nyeri County, where a sample size of 9 employees was sampled
per SACCO using stratified random sampling. Data was collected using both
secondary and primary data collection methods. Primary data collection tools were
self-administered questionnaires, while journals, text books, and internet were used
to collect secondary data. Data analyzed was presented using frequency tables, bar
charts and graphs. The study concluded that a strong significant relationship exists
between financial reporting systems and financial performance of saccos in Nyeri
County, Kenya. The study also concluded that there was a strong significant
relationship between inventory management systems and financial performance of
saccos in Nyeri County, Kenya. The study went further to conclude that a strong
significant relationship exists between budgetary control systems and financial
performance in Nyeri County, Kenya. As a result of the clear relationships established
between variables the study was able to conclude that a clear relationship exists between
accounting information systems and financial performance of saccos in Nyeri County,
Kenya. The study recommends the Government to develop policies and guidelines that
will encourage Saccos to adopt accounting information systems, as well as Institute of
Certified Public Accountants of Kenya to offer consultation services to saccos on
choosing appropriate accounting systems, financial management and reporting