ACCOUNTING INFORMATION AS A TOOL FOR MANAGEMENT DECISION MAKING
ABSTRACT
This research work highlights the result of research carried out to examine the relevance of accounting information to management decision making in First Bank of Nigeria Limited, Abdullahi Fodio Road Branch. A substantial aspect of the study involved collecting data through the instrumentation of questionnaires and interviews. The data collected were classified, analyzed, and the percentages of the findings presented in a table. The hypothesis was then statistically tested with chi-square in which the calculated value of chi-square equals 14.357 and is greater than the critical value of 5.991… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
INTRODUCTION
Background of Study
Accounting is fundamentally a measurement and communication process used to report on the activity of profit and non-profit seeking organizations. In other words, it is concerned with the discipline of summarizing, recording, analyzing and interpreting economic events and other financial activities.
This process is performed by accountants who furnish management with the relevant information needed for effective and efficient decision making as to contribute to the quest for means of surmounting industrial, commercial, governmental and academic problems inherent in a dynamic and volatile socio-economic and political setting.
The chambers 20th-century dictionary defines information as “intelligence given-knowledge”. This is because reliable information is necessary before a sound decision involving the allocation of a scarce resource (land, labour and capital) can be made, that is why the accounting profession is dynamic and there is always the need for an accountant to continually update his/her knowledge of accounting portfolio.
Accounting information is valuable because it can be used to predict the financial consequences of each alternative course of action. An organization needs quantitative information to function or make a decision. Management uses the best available information system to provide management information which is used primarily to accomplish three broad purposes;
(i) To provide a financial statement to the interest of external users,
(ii) To plan the organization activities and operations in both the short and long run, and
(iii) To control the result of its operations.
The American Accounting Association (1966) also defined accounting as “the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information”.
Another definition, which is widely accepted, is by the American Institute of Certified Public Accountants (1970) defined accounting as “the art of recording, classifying and summarizing an event which is in part at least of a financial character and interpreting the result thereof”… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
STATEMENT OF PROBLEM
Management who takes wrong decision always ends up not achieving their set goals and objectives. Many managers who think that they can operate successfully without the use of information provided by their accountants, leads to economic failure such as liquidation of many banks. So, effective decision or management decision cannot be… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
The purpose of this study is to establish the relevancy of accounting information as a tool for management decision-making.
The subsidiary objectives of this study are;
(i) The basic issues of how the accounting information systems are used to perform the generally recognized financial and management function in First Bank Nigeria Limited, Abdullahi Fodio Road Branch, Sokoto… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Research Significance
The study is aimed at establishing whether there is any correlation between the accounting information provided by the account department (accountants) and the decision made thereof by the users of the information, most importantly management of First Bank of Nigeria LimitedAbdullahi Fodio Road Branch, Sokoto… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
A lot of research has been done in recent times on issues relating to accounting information and management decision making in organization. In this chapter of the study, an exploratory attempt is made to review relevant works on variables that concerns the use of accounting information and decision-making in organization. The discussion would be based on overview of accounting information concepts convention principles and statutory stipulation etc.
It is important in this study to recall the historical development of accounting. The earliest attempt to record financial information is backdated to the Assyria of 3500BC. When it was necessary to record the payment made to armies of the kings.
As a former British Colony, Nigeria has always toed the line of its colonial master. Britain the introduction of practices of accounting was engineered by British accountant who comes was engineered by British accountants who come to Nigeria to work in an attempt to protect their financial interest prior to independence (Ojinjime 1981) nevertheless, the progress witnessed that the majority among them were foreigners… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Accounting Convention
This refers to what are accepted in accounting practice, the concepts of accounting have become accepted in the business world and their associations have taken places over many years, it is being interpreted in many ways. These have therefore grown up in accounting. The main conventions are as follows:
- materiality
- Consistency
- Objectivity
- Conservation
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The fifteenth-century witnessed the evaluation of a system of accounts which records completion of all form of transaction and the principles of double-entry which were first published it Italy by Rev. Father Luca Paciali, a well known teacher of mathematic in 1449.
The single system consist of bookkeeping by means of personal account only, the system ignores the use of impersonal check. It is impossible to draw up trading, profit and loss accounts and balance sheet in the single entry system. The double entry principles are now commonly being applied throughout the world… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Users Of Accounting Information
The government keeps records of all financial transactions from various financial statements are prepare in order to provide information for interest user.
Internal Users: These are those who are directly involved in the operation of the government activities. They include:
- the government as an institution i.e. the Federal government as an entity for the planning coordinating and controlling of the economy.
- Members of the executive and their advisers for planning and controlling purposes
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Nature of Accounting Information
Every element of society from the individual to an entire industry of government branch has to make decision on how to allocate its resources. Accounting has been defined as the art of (1) recording (2) classifying (3) reporting and (4) summarizing insufficient manager and in terms of money transaction and event which are in past at least of a financial character and interpreting the result thereafter.
Accounting is the process of identifying measuring and communicating economics information to permit, informed judgment and decision by the users of the information (Mills Channd 1984)… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
RESEARCH METHODOLOGY
Introduction
This chapter deals with the methods and procedures used in the study. A conscious effort is made in highlighting all the elements involved and how they are applied in the study. The chapter is designed under the following section.
i – The Instrument used for data collection
ii – The population and sampling techniques
iii – method of data analysis
Instrument Used For Data Collection
The instrument used was the questionnaire prepared and given to the staff of Firstbank. The research information was attached to the questionnaire to guide the respondents on how to complete the questionnaire. The latter briefly introduced, the person conducting the research on the title and purpose of the study… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
DATA ANALYSIS AND DISCUSSION
Introduction
This chapter deals with the presentation and analysis of data collected from the field by questionnaire. It also includes the discussion of findings and presentation of data using a simple percentage and analysis of the result.
PRESENTATION AND INTERPRETATION OF DATA
A total of 35 structural questionnaires were administered to the respondent of First bank, Abdullahi Fodio Road Branch out of which 34 representing 97% completely filled and returned their questionnaire.
SECTION A
Personal Demographic Data
Percentage Distribution of Respondent by Sex (N=34)
Table 4.1:
| Sex |
No of Respondent |
Percentage |
| Male |
19 |
55.9 |
| Female |
15 |
44.1 |
| Total |
34 |
100 |
Table I above shows the percentage distribution of respondents by sex from the table 55.9% of male filled and returned the questionnaire and 44.1% female implying more male than female filled and returned the questionnaire.
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DISCUSSION OF FINDINGS
The study on the topic: Accounting Information as a tool for management Decision making, conducted in Abdullahi Fodio Road Branch an Firstbank has the objective of determining the necessity of using Accounting Information to enhance effectiveness and efficiency towards realizing set goals.
As a drive to this, three question were set and questionnaire development based on the theme of the questions (research) showed that information from accounting system can be used to control cost especially administrative cost and budget.
The information infact aid in the blocking of loopholes of waste and direct the resources to area of need. Beside, with the elimination of waste staff reposition and motivation can be conveniently made to boost productivity. This however, guaranteed productivity as incentives and fringe benefit boos their morale for more efficiency… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
SUMMARY, RECOMMENDATION AND CONCLUSION
Summary
This study examined accounting information as a key tool for management decision in the organization with case study of Firstbank Abdullahi Fodio Road Branch. The study which access information from both primary and secondary sources discovered that management effectiveness and efficiency in the realization of goal can be fast-track with the available of accounting information.
Accounting information from genuine and efficient source can help check fraud and corruption in the company financial system and also help the management… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Conclusion
One of the objectives of the study was to determine the relevant of accounting information in productivity of the company. The study which basically use questionnaire for data collection and simple percentage for analysis shows that accounting information… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
Recommendation
The following are some of the recommendations from the outcome of the study
- Accounting information should be enhanced by effective updating of account records. The periodic audit of the… (Scroll down for the link to get the Complete Chapter One to Five Project Material)
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