FINANCIAL ACCOUNTING INFORMATION AS AN AID TO MANAGERIAL DECISION MAKING

ABSTRACT

Decision making can be viewed as the very fabric of which organized activities are made. This partly depends on the amount of information supplied to management. This study is aimed at finding out information supplied by the accountant, through financial accounting and this brought about the need to put across the potentialities of the use of financial accounting information in the management of business through a research. The study also revealed the information derived from financial accounting statement, the extent of which these financial accounting information can be used in managerial decision by the business organization.

CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND OF THE STUDY

The accounting profession essentially involves the supplying of information to decision makes hence it is no surprise that accounting has always been involved in many information related problem. The need for this involvement is understood by the avowed aim of accounting which according to the America accounting association committee is to prepare a statement of basis accounting theory (ASOBAT 1961). The attainment of this objective requires both the identification as well as the disclosure of an adequate amount of information considered relevant to the users. Financial accounting covers those activities related to the preparation of certain reports which are known as financial statement. These statement report the financial status of the firm at a particular times, the firms activities, resulting profit and the flow of resources occurring within the firm during the same period.  Financial accounting information therefore it the information derived from the financial accounting books, journals and report. The essence of this information is for the management and other users to makes decision and the accuracy of this decision making depends on the effectiveness and efficient application of the financial information, the design  of management information system (M.I.S). Decision making, itself can be described as science of choosing among possible management action. In other words, the art / science of decision making or a combination of these enable management of a business to choose from among a range of already anal used and evaluated alternative.

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