THE IMPOTANCE OF ACCOUNTING INFORMATION IN MANAGEMENT DECISION MAKING PROCESS

CHAPTER ONE

INTRODUCTION 

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study

CHAPETR TWO

2.0   LITERATURE REVIEW

CHAPETR THREE

3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

 

 

Abstract

Information is a life-wire of every business organization. However, it is of various diversities, but accounting information was selected for this study on the grounds that some business organizations do not base their decision on the available accounting information, and therefore lack a controlling power on their incomes and expenditures. It was on this ground that the topic of this study “The Importance of Accounting Information in Management Decision Making Process” was derived and Akwa Ibom Water Company Limited was selected as a study area because of its current need to cover a wider area in Akwa Ibom State. The objectives of the study were to find out the roles of record keeping in decision making. To find out government roles towards the organization’s accounting information. Random sampling technique was used in questionnaire administration. Findings revealed that Akwa Ibom Water Company keeps and maintain accounting information which is the bedrock to which decision are based. The result was analyzed using sample percentage. Conclusion was drawn based on findings of the study.

 

 CHAPTER ONE

INTRODUCTION

• Background of the study

Accounting is the process by which the profitability and solvency of company can be measured. Accounting provides some basis information needed in making business decision. It is clear that a business cannot hope of accomplishing these objectives survival. Operating profitability and staying solvent without the application of accounting concept. Based on the research study, it is purely based on the use of accounting information in making decision in a business. In many cases our analysis will show that accounting is the principles tool in making decision in a company, Hence management should think of the accounting information rather than employing Accounting provides information which is vital for the economic decisions that have to be made by individuals and the companies. Accounting counting is a way of giving management the financial information and control it needs to run a portable business or an efficiency organization. Accounting has been defined in so many ways in different people. According to Onovo (2004) accounting is an act or process by which an economic environment which focuses on dealing with information about the activities under focuses. According to Eneje (2006), accounting is a process of measuring, recording, classifying, summarizing and communicating of financial information that is used in making economic decision to interested persons or parties. It is also process by which profitability and solvency of company can be measured. Accounting provided information needed bin a basis for making business decision that enables management to guide the company in a profitability solvent. Stated simply, managing a business is a matter deciding of what should be done seeing to it that the means are available and setting people employed in the business to do it in this process management is faced with alternative and every decision to do something involves a choice. In most cases, the profitability that a good decision will be made depends on the amount and validity of information that the manager has about the alternative and consequences. Management on the other hand is a process of converting information into action and accounting is the source of mist if the information is used. In this, management and accounting is overlap, extensively, management is highly dependent on accounting for operating facts and on the accountant for the steaching hand he can offer by virtues of his temperament and training. It is not possible for the manager herself to an accountant, he must beat home with accountants. He must know how to make effective use of the information material that the accountant produces in order to accomplish his managerial objectives. Accounting is a way to give management the financial information and control. It needs to run a profitable business or efficient organization. The management of every business must keep foremost in its thinking, two primary objectives and they are: To earn profit and to stay solvent, that is to have in hand sufficient cash to pay debt as they fall due. Profit and solvent are not the only objective of business management. There are many others such as protecting the environment providing jobs for people which is unemployment and providing more goods and services of a lower rate. At this point, business cannot grow without the accomplished of these objectives.

• STATEMENT OF THE PROBLEM

For an organization to be regarded as successful, it must have a good decision making policy. The decision making policy enables management to anticipate future problem and difficulties through the use of accounting information as well as employing corrective measures as early stages. In his our inflationary economy, most companies are finding it difficult to survive, mostly involved are the financial companies others have gone into liquidation while there are some that are growing yet amidst of the turbulent economic condition. Companies have various method of approaching to their decision making hace this research is envisaged to help in determining and highlighting the problems that militate or aid the management for effective implementation of the company’s objectives also to determine the extent financial goals and other organizational goal are achieved.

• OBJECTIVE OF THE STUDY

The objectives of the study are;

1. To evaluate the efficiency and effectiveness of accounting information as a management tool in decision making
2. To identify hour accounting may be used to control expenditure on one hands and assist revenue generation on the other.
3. To evaluate the objective and uses of government accounting information
4. To examine the usage level of accounting information in Akwa Ibom Water Company Ltd
   • RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀:  there are no objectives and uses of government accounting information in an organization

H₁: there are objectives and uses of government accounting information in an organization

H₀²: there is no usage level of accounting information in Akwa Ibom Water Company Ltd

H₂:  there is usage level of accounting information in Akwa Ibom Water Company Ltd

• SIGNIFICANCE OF THE STUDY

The significance of the study can be grouped into two major aspects, practical and academics.

Practical Significance:   Practically, this research wills broad the understanding of the following people:

Management staff: It will enable the management and staff of the institution to make effective use of finding and recommendation in discharging their functions.

ACADEMICALLY: students; the research will enable students who intends to study this course in future to make use of this work both in their academics and research program.

• SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the importance of accounting information in management decision making process. The researcher encounters some constrain which limited the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

 

• DEFINITION OF TERMS

Accounting: This simply means a process by which the profitability and solvency of the company can be measured.

Decision making: this means a choice between alternative courses of action. It also define as a process of making a judgment regarding what we ought to do in a certain situation after having deliberated on some alternative courses of action.

Information: this is a process of information that can be used for decision making.

Management: This can be seen as a guidance or direction of people towards organization and goals or objectives.

 

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

 

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