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 accountants through financial accounting. The study
revealed the information derived from financial statement, the extent to which
these accounting information can be used and also used in management decisions
by business organizations.
In reaching at our conclusion, a literature review was
conducted and ratio analysis was used in analysis financial statements. The
result of the study show that ratios analysed give one an idea of the financial
status of an organization and financial statement are prepared in such a way
that interested parties can interpret and derive the information necessary for
their various needs.
In further of
the research objectives recommendations were made which when implemented, the
researchers hope will be of help to management in making decisions using
financial accounting information. This recommendations were based on research
findings and should be noted that they are not exhaustive.
In conclusion,
the researchers believe that this study has achieved its pre-determined
objective by identifying various ways by which the financial accounting
information can be used in decision making and where there is good analysis and
interpretation of financial accounting information it will lead to sound
decision being made.
TABLE OF CONTENTS
PAGES
TITLE PAGE
APPROVAL PAGE
ABSTRACT
ACKNOWLEDGEMENT
DEDICATION
CHAPTER ONE
INTRODUCTION
1.1
BACK
GROUND OF THE STUDY
1.2
STATEMENT
OF THE PROBLEM
1.3
PURPOSE/OBJECTIVE
OF THE STUDY
1.4
SIGNIFICANCE
OF THE STUDY
1.5
LIMITATIONS
OF THE STUDY
CHAPTER TWO
REVIEW OF RELATED LITERATURE
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY SOURCE
3.1
SOURCES
OF DATA (SECONDARY)
3.2
LOCATION
OF DATA
3.3
METHODS
OF DATA COLLECTION (LITERATURE WORK ONLY)
CHAPTER FOUR
FINDINGS
CHAPTER FIVE
RECOMMENDATION AND CONCLUSION
BIBLIOGRAPHY
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The attainment of this objective
necessarily requires both the identification as well as the disclosure of an
adequate amount of information considered relevant by the users.
Financial
accounting information therefore, is the information derived from the financial
accounting report. The essence of this information is for management and other
users to make decisions. Therefore, the accuracy of decision making depends on
the effective and efficient design of management information system.
The accounting
concerned prepares the financial accounting information in such a way that will
enable users to derive maximum information for their use.
Decision
making itself can be described as the art or science of choosing among possible
managerial actions. The art or science of decision making enable management of
a business to choose from among a range of already analysed and evaluated
alternative.
Two classes of
decision makers can be identified in respect of the use of financial accounting
information. These are the external users and the internal users. Management
represents and the internal users include creditiors, shareholders, government
agencies, trade unions e.t.c. Managers are the major users of financial
accounting information need this information to plan.
The impact of
financial accounting information on the management of any business cannot be
overlooked, though the extent of such..
1.2
STATEMENT OF THE PROBLEM
Managers of certain businesses do not
have sound accounting systems to enable them monitor operating expenses and
revenues. They do not need the warings communicated by financial accounting
information. This ignorance or lack of financial accounting information, may
lead to the non-effective and inefficient accomplishment of the firm’s
objectives.
It is only through accounting
information that managers and external users get a picture of the organization
as a total entity. Managers who fail to realize this do not appreciate an
accountants analysis in respect of financial accounting information generated.
This may lead to poor decisions being taken and it may affect the profitability
and performance of the organization.
Some organizations, due to low
financial layout or lack of adequate planning or ignorance may not employ expert
hands needed and this causes the effect and importance of financial accounting
information on decisions taken not to be noticed or gained by the organization.
The researchers in this study will
seek to show the information management can derive from financial accounting
and their usefulness for decision making in business.
1.3
OBJECTIVE OF THE STUDY
The objectives of study are as follows:
1.
To
ascertain of there is any relationship between effective use of financial
accounting information and the decisions made in an organization.
2.
To
ascertain whether company performance is related to efficient and effective use
of financial accounting information.
3.
To
determine factors that may constrain or promote the effective use of financial
accounting information.
4.
To
make recommendations which may enhance the employment of information provided
by accounting system.
Impact may not be the same for every
business. This study will seek to inquire into how monetary and financial
information arranged in a professional accounting manner will influence
managerial decision.
1.4
SIGNIFICANCE OF THE STUDY
This work would be of immense benefit
to the following groups.
1.
Financial
analysts.
2.
Economic
researchers and students
3.
Investors
and shareholders
4.
Creditors
5.
Labour
unions and the general public.
The major contributions of this work
are:
1.
To
the management of companies as a tool for evaluating their performance and
knowing whether they really take note of financial accounting information.
2.
To
further examination of the use of financial accounting as an information
system.
3.
To
other researchers or research scholars who may wish to carryout further
research on the subject matter or other related topics.
4.
It
will provide insight on how business organizations rely on financial accounting
information for decision making.
1.5
SCOPE AND LIMITATIONS OF STUDY
This work tends to cover the use of
financial accounting information indecision making since it will be voluminous
to research into financial accounting information alone.
Such decision
making shall be to enhance profitability of the firm.
1.6 DEFINITION OF TERMS
Financial Accounting: Financial accounting is concerned with the recording of transactions for a business enterprise or other economic units and the periodic preparation of various reports from such records. Financial accounting then can be said to be a systematic gathering, identifying, summarizing and reporting of business transactions in monetary terms such that it provides information which permits informed judgment by the users of such information.
Information: These can be said to be facts needed or received by a person, or group of persons which is or will be useful to them.
Management: Management can be defined as the rational selection of courses of action to optimize the inter-relationship of a material and money for the survival and growth of the organization. It can also be regarded as the process of getting things done through people.
Decision-Making: Decision making can be defined as identifying alternatives, evaluating such alternatives and choosing from such alternatives. Decision making can be viewed as the very fabric of which organized activity is made.
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