The Project File Details
Accounting generally involves the process of identifying, measuring, and communicating economic information to permit informed judgements and decisions of users of the information.
In other words, accounting is concerned with providing information, which will help decision makers to make decisions. To enhance creditability and utility of the information, the decision making process, established concepts, principles, standard and legal requirements are strictly followed in order to translate physical facts into money values and ensures that all types of report are integrated and prepared on consistent basis.
The information provided by financial statement, cash flow, variance analysis, managerial costing in planning, organizing decision-making and control are invaluable to achieve objectives of the various interest groups. In spite of all the arrays of accounting tools at our disposal, organizations still wobble, trouble down the drain.
It is against the background that the researchers delved into the study of the impact of accounting information on decision taking process of organizations. To this end, the relevance, time liners, accuracy, conciseness, and clarity of the information and modes of presentations of the users were examined.
It is the objective of the researcher to highlight more vividly the invaluable importance of all these accounting tools and techniques in the decision-making process organization to better equip users of the job ahead. These researchers believe would help significantly in reviewing our economy.
However, during the course of the research, the researcher discovered that proper and enough accounting information were being generated and applied substantially in organization studied such as ANAMMCO, point industry etc. also apply accounting information in decision making.
Hence, it was concluded that the problems of the economy lies elsewhere other than insufficient generation and application of accounting information in decision making process in organizations.
Based on the findings and conclusions the researcher recommended for further research into the other variables that might be contributing to our economy disorder. Therefore, the project was broken down into first chapter as indicated in the table of contents.
Title page ii
Approval page iii
Table of contents viii
2.5 Uses of accounting information 23
2.6 Kinds of accounting information and tools
for decision making. 27
2.7 Summary of the related literature review. 48
Data Presentation 54
Summary of Finding Conclusion and Recommendations 79
References / bibliography 91
1.1 BACKGROUND OF THE STUDY
At independence, Nigeria joined the committee of nations with the hope for a better tomorrow. We were able to feed ourselves and were of course almost self-sufficient. Subsequently, our hopes seem unattainable. We seem to be going deeper and deeper into the woods. The consensus is that it has been bad for Nigerian.
Due to the adverse economic conditions prevailing in the country, many businesses have chased shops and even financial institutions are being declared distressed at alarming rate. Business that are yet to be submerged or that want to stay afloat, employ all kinds of strategies. Some increase prices, adopt promotional tools, engage in aggressive marketing etc. whereas, others go for an odd combinations of activities and even subterranean one to survive.
Any business or individual that want to survive must make the right decisions. The era of mile of thumb is gone; employing it is a sure way to fail absurdly.
The price of any conceivable item from garri and bread to radio and book not to mention petrol has been soaring in geometric progression over the years. The economy is truly in dire straits. These compounds and complicates intricately, are the problems of organizations vis-a vis-effective planning and decision making processes other factors such as stagflation, taxation, economic and political in research study. It is the intention of the researcher to concentrate more on financial accounting, cost accounting as well as management accounting. Nonetheless, recourse should be made to the other branches if accounting whenever there is need to do so. ‘Financial accounting is the part of accounting which covers the classification and recording of actual transactions of an entity in monetary terms in accordance with established concepts, principles, accounting standards and legal requirements. It presents as accurate view as possible of the effect of those transactions over a period of time and at the end of time.” Overtime, it evolved and metamorphosed into a very complex web of integrated financial information system which modern organizations cannot do without.
It presents a broader, more overall view of the organization with primary emphasis upon classification according to type of transactions rather than cost and management accounting emphasis on functions, activities, products and processes and internal planning and control.
Cost accounting and management accounting are very much intrinsically interwoven that the difference between the two is superficial, as that definition of management accounting will substitute the other. Management Accounting is the provision of information required by management for such purposes as:
The above involve participation in management to ensure that there is effective: –
Cost accounting as a subset of management accounting is aptly buttressed by Lucey T. in his book “costing” where he defined cost accounting as that part of management accounting which establishes budget and standard cost and actual cost operations, processes, department or products and the analysis of variance, profitability or social use of fund.
Nigeria is in very distinct economic year. Some aspect of our economy are experiencing unprecedented hyper inflation where as other aspects are worst till by devastating depression, for years now, the emphasis is on the restructuring of our economy. The international monetary fund (IMF) prescribed some better-internal restructural measures (without regards to our socio economic (background) which were applied. The cream of our economists who can dictate economy is still running heedlessly into the words culminating in failure of business and pauperization of a great majority of Nigerians. Under the present economic dispensation very different to stop a float vis-à-vis those that are yet to be submerged.
In times like this, judicious use of relevant information and techniques in decision-making processes of organizations, individuals and corporate entities are without questions. Application of accounting information makes the difference between failed banks, enterprise, corporate bodies etc. and successful ones. In all cases, the accountants have collected, analyzed interpreted, presented and communicated the information for the use of interested parties. It remains the adoption, application and implementation of that information for the benefit of the organization. If these were being done as and when due, then the faultifarons failures in the business sector and domestic even government would not have been. So the problem is, are interested users actually aware of these various accounting in formations and they apply them in their production or investment decision making process; can decision based on accounting information actually raise efficiency level via cost minimization and wealth maximization?
In summary, the problems encountered in course of this research are:-
Gross inefficiency and non-application of sound professional principles have been known to be a serious factor contributing to the failure of businesses.
Business and economic investors are no more Father Christmas. They will invest it and only if they are connected or convinced that their return on anticipated investment are high, guaranteed and out weight all risks including financial costs. The only way t o assure them of this is through efficient production via cost minimization by plugging leakages thereby maximizing the efficiency of operations.
Apart from technical know-how and capital, efficient management of information is paramount if the organization is to achieve its objectives.
THE OBJECTIVES OF THE STUDY ARE THEREFORE:
This research study cannot possibly treat the aspect and kinds of accounting information because the field is imply too wide. So only those relevant to the research study where dealt with as per need-ratio analysis, cost-volume-profit analysis, absorption and margin, costing, the contribution margin; standard costing and variance analysis, linear programming.
The availability of correct and update data is not easy. Even when available, one still encounters wholly unnecessary bottlenecks due to our socio-cultural background vis-à-vis disclosure of information and bureaucracy. So this constituted an impediment to the research work.
Financial and time constraints were seriously encountered by the researcher.
Computational procedures of the various accounting information or fools are outside the scope of the work. However, those deemed necessary might be treated.
It is impossible to cover all the companies, firms, and other business outfits in Nigeria as a sample of two companies in Enugu state were studied and inferences trade from these.
They are as follows: –
HI: Alternative Hypothesis
Ho: The accounting information generated in manufacturing firms is not utilized effectively in production decisions.
HI: The accounting information in manufacturing firms fulfills the basic roles of proper resources allocation cost minimization and production efficiency in production decision making.
High interest rates, massive depreciation of the local currency (Naira), non-utilization of installed capacity of manufacturing plants, of inevitable funds occasioned by low capital formation, political instability, stupendous-financial irresponsibility, devastating inflation, incredible deflation, high cost of living, high unemployment rate, and inappropriate taxation policy are factors that impinge adversely on the operations f manufacturing organization on the entire economy.
This research study will help to maximize the beneficial impact of accounting information in the decision-making processes of an organization. This boosts the profitability of the organization as well as ensuring it’s continuity as a business entity. It will help in the efficient allocation of scares resources that have alternative uses as well as increase productivity thereby up lifting the standard of living.
In fact all interested group like shareholders, employee, investors, creditors, government etc will benefit immensely.
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