TABLE
OF CONTENTS
Title
page I
Certification II
Dedication III
Acknowledgement IV
Table
of Contents V
CHAPTER ONE: INTRODUCTION
1.1
Background of the study 2
1.2
Statement of the problem 4
1.3
Research Question 6
1.4
Objective of the study 6
1.5
Research hypothesis 7
1.6
Significance of the study 7
1.7
Scope of the study 8
1.8
Limitation of the study 8
1.9
Operational definition of terms 9
CHAPTER TWO: LITERATURE REVIEW
2.1
Preamble/ Preview/ Introduction 12
2.2 Conceptual
Issues/ Framework 13
2.3 Theoretical
Framework 16
2.4
Empirical Review 17
CHAPTER THREE: METHODOLOGY
3.1
Area of study/ Introduction/ Preamble 22
3.2
Research design 22
3.3
Sources of data 22
3.4
Population of the study 24
3.5
Sample size and sampling techniques 24
3.6
Research instrument 25
3.7
Method of data analysis 26
3.8
Model specification 27
CHAPTER FOUR: DATA ANALYSIS AND
DISCUSSION
4.1
Preamble / Introduction and Preview 29
4.2
Demographic characteristics of respondent 29
4.3
Statistical result 34
4.4
Test of hypothesis 35
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATION
5.1
Summary 43
5.2
Conclusion 43
5.3
Recommendation 44
References 46
Biblography 49
Appendix 50
CHAPTER ONE
INTRODUCTION
In recent years the advancement in
information system modules all over the world has made business organizations
to exert resources in this area if they are to compete favourably among their
local and foreign counterparts. Gone were the days when business organizations
were simply required to make profit, survive and provide a fair return to
investors’ on their interest. The modern business organizations find itself in
the atmosphere of global uncertainties, cut throat competition locally and
internationally and unprecedented change in the economy. Hence, a great demand
is often placed on the managers of these organizations to make pragmatic and informed
decisions if the organization is to move forward as the success or otherwise of
any
organization is often a function of the
sum of the decisions taken in the past. However, the quality of decisions taken
by managers rests upon the substance and accuracy of information provided by systems
available to them. An accounting system is one of the most effective decision
making tools of management as it provides an orderly method of gathering and
organizing information about the various business transactions so that it may
be used as an aid to management in operating the business (Copeland and
Dascher, 1978). Accounting information
also may help managers understand their
tasks more clearly and reduce uncertainty before making their decisions (Chong,
1996). Thus, Accounting Information system is vital to all organizations and
perhaps, every organization either profit or non- profit oriented need to
maintain an Accounting Information System as no organization is exempted from
decision making in their operations. Accounting system, in recent times, has
tended to be a system of information that does not stop at limits of data and
financial information, but also it includes data and descriptive and
quantitative information which is useful in decision making for users distinct
with plurality and diversity. Such users include current and potential
investors, lenders, suppliers, creditors, customers, governments and the public
in addition to the administration, which is its responsibility to prepare the
accounting programs and displaying it, that information must be
capable of achieving the goal that it has
been prepared for. Hence the role of Accounting Information System for
effective decision making cannot be over emphasized. It is noteworthy to say
here that Accounting Information System derives its source from accounting
data.
Accounting Information Systems produce
results which enhances decision making. Hence, it can safely be concluded that
Accounting Information System is not an end in itself but a means to an end
i.e. decision making to improve corporate performance. Accounting Information
System produces detailed and comprehensible accounting information which are
invaluable basis for decision making.
1.1 BACKGROUND OF THE STUDY
At independence, Nigeria joined the committee
of nation with the hope for a better tomorrow. We were able to feed ourselves
and were of course almost self-sufficient. Subsequently our hopes seemed
unattainable. We seem to be going deeper and deeper into the woods. The
consensus is that it has been bad for Nigeria.
Due to the adverse economic condition prevailing in the country many
businesses have closed, shops and even financial institutions are being
declared distressed at alarming rate. Businesses that are yet to be submerged
or that want to stay afloat employ all kind of strategies. Some increase price,
adopt promotional tools, engage in aggressive marketing etc. whereas others
goes for an odd combination of activities and even undergo different kind of
small business to survive. Any business
or individual that wants to survive must make the right decision. 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 proportions over the year. The
economy is truly in distress. These compounds and complicates intricate are the
problem of the organization vis-à-vis effective planning and decision making
processes. Other factors such as stagflation, taxation, economic and political
problem are the major problem which affects information and decision making.
The future orientation is what most company and bank get from making accounting
decision .the computation and interpretation of analytical ratios from
financial statement enable bank to determine their operation trends and provide
a basis for management decision making. Other users of financial analysis are
used in making financial decision and achieving the goal of sustainability
determines compliance with regulatory requirements. Financial analysis is an
investment that has positive return in the future on how decision will be made,
how to manage the finances to achieve the strategic goals of the institution
through decision making.
Many people
think that accounting as a highly technical field which can be understood only
by professional accountants actually nearly everyone practices accounting in
one form or the other. In modern times, management require a wide variety of
information to successfully accomplish its aim and objectives. This information
is mainly determined by the element of uncertainty about the future and lack of
knowledge about the present. Some of these decisions are of strategic
importance having a large impact on the business, others are routine operating
decision. Therefore accounting information is based on laws and regulations
governing the handling of accounting report contained in the financial reports
of organisation.
Making the right decision depends on the
possession of appropriate, accurate and up to date information provided and
presented in a meaningful way. This study set out to examine the contribution
of sound accounting system in providing the management with financial and other
information basis for dealing with decision problems that arises from their
organizational operations.
1.2 STATEMENT OF THE PROBLEM
Basically,
the nature of manufacturing business compels it to carry out a great deal of
book-keeping records based on accounting principles and information provided
with the perpetual increase in the number of consumer of manufacturedproducts,
it has become necessary to devise a systematic mean in handling the resultant
book-keeping and accounting activities.
A lot criticism has always been made about the service of the
organisation, consumers complain of low quality product while employers
complain of lack of promotion inadequate salaries, lack of training etc. Furthermore, the major challenge facing every
financial institution\ business, organisation of today is market relevance.
On-going fundament at changes in the global politics, economy and emerging
competitions particularly challenges proper and adequate contemporal accounting
information for management decision making. The company itself tries to
coordinate all these challenge effectively and efficiently so as to minimize
any anticipated and unanticipated pitfalls. If a sound and effective accounting
system is applied property by the manufacturing organisation, the difference
will be clear.
Improper attention to the accounting system
and handling of accounting information has given birth to the under mentioned
problems.
1.
Poor
planning
2.
Result
to poor decision making
3.
Poor
organization and control of business activities and unsatisfactory service to
its customers.
4.
Poor
decision making in administrative activities of the organization
1.3 RESEARCH QUESTIONS
1.
Are
there problem in generating and utilizing accounting information necessary for
management decision making process?
2.
To what extent does accounting information generated by accounts department
contributed in decision in making process?
3.
To what extent does accounting information has improved effectively performed
or fulfil the basic roles of cost minimization, proper allocation of scare
resource and improvement in the production?
1.4
OBJECTIVE OF THE STUDY
The purpose of our paper is to find out
which accounting tools are used in Wexiödisk and to
inform the reader about how those affects
the decisions made by the company. In order to contribute to the attainment of
the purpose the paper will pursue the following structure. As a start, the
methodology will provide the reader with an insight into the process of how the
study was conducted. Afterwards, the chosen theories are introduced, which
include ideas of various accounting tools as well as decision-making. Fieldwork
data, collected during our study, will be eventually presented and then
compared with the theories in use. This allows for drawing conclusions that will
be shown in the final section.
1.5
RESEARCH HYPOTHESIS
NUMBER
ONE
Ho There
are problem in generating and utilizing accounting information necessary for
management decision making.
H1 There
are no problems in generating and utilizing
accounting
information necessary for management decision making.
NUMBER
TWO
Ho
accounting information generated by accounts department has not contributed in
decision making process.
H1
Accounting information generated by accounts department has contributed in
decision process.
NUMBER THREE
Ho
Accounting information has not improved effectively performed or fulfil the
basic roles of cost minimization, proper allocation of scare resource and
improvement in the production.
H1 Accounting information has improved
effectively performed or fulfil the basic roles of cost minimization, proper
allocation of scare resource and improvement in the production?
1.6 SIGNIFICANCE OF THE STUDY
This
research study will help to maximise the beneficial impact of accounting information
on the decision making process of an organization. This boosts the
profitability of the organization as well as ensuring its continuity as a
business entity. It will help in the efficient allocation of scare resources
that have alternative being use as well as increase productivity thereby
uplifting the standard of living. It will review the improvement in the
organization or company handling the accounting information and show equally
the ways through which improvement could be accomplished. In fact, all
interested groups like shareholders, employers, investors, creditors,
government etc will benefit immensely.
This project will equally serve as a reference to student who may be
interested to embark on a research of this nature.
1.7 SCOPE OF THE STUDY
The
research cannot treat all aspect and kind of accounting information because the
field is simply too wide. So only those relevant to these studies were dealt
with as per need- ratio analysis, cost-volume- profit analysis, absorption and
marginal costing, the contribution margin standard costing and variance
analysis, linear program.
The availability of correct and up to data
is not easy, even when available; one still encounters wholly unnecessary
bottlenecks due to our socio – cultural background vice versa disclosure of
information and bureaucracy. So this constituted an impediment to this research
work.
1.8 LIMITATION OF THE STUDY
Due
to a lack of time for our research, we could not conduct this study as deep as
we wantedand so some questions that we had did not find any answer. The most of
the information we got come from interviews and questionnaires. During the
interview we had sometimes the feeling that the interviewees are used to employ
other words and vocabulary than we do. We couldn't choose other methods in
addition as the research participant’s time was very limited. Indeed, such
methods required more time than just a few months. There are limitations on
resources for reference purposes especially responses on collection of data,
many respondents give bias responses probably because of job protection,
officer’s name and image protection, personal reluctance, unnecessary fear of legal
implication and so forth.
1.9
OPERATIONAL DEFINITION OF TERMS
EFFECTIVENESS: The total or actual interest paid
or earned in a year, expressed as a percentage of the principal amount at the
beginning of the period.
EFFICIENCY: A measurement of the ability of
an organization to produce and distribute its product. In accounting terms it
is qualified by a communism of the standard hours allowed for a given level of
production and actual hour taken.
ACCOUNTING
INFORMATION: This
is a system designed to obtain the financial position of an organization as at
the end of the period.
INFORMATION: Is a processed data used in
obtaining detailed data about a particular person, thing or place.
LEVERAGES: They are used by companies of its
limited assets to guarantee substantial loans to finance its business.
FINANCIAL
INFORMATION: This
is information summarized by a company’s activities over the last year. They
consist of the profit and loss account, the cash flow statement etc.
ANALYSIS: In standard costing and budgetary
control, analysis of various in order to seek their causes. The total profit of
various is analysed into sub – variance indicating the major reasons for budged
figures.
DEBT: A sum owned by one person or
organization to a person showing that the debt to be required to be settled
within one accounting period.
RATIO: To put company’s performance in
percentage. The use of accounting ratio to evaluate a company’s operating
performance and financial stability.
DECISION
MAKING: This is
the end of deciding between alternative courses of action. Running of a
business, accounting information and techniques are used to facilitate decision
models such as discounted cash flow.
IMPACT: This means the duties
responsibilities and functions. As it has to do with work, it is that
fundamental obligation incumbent on the public relations for the attainment of
democratic order in the organization policy.
Accounting:
Is the process of producing needed information regarding primarily the
financial activities of economic entities by Bartho N. Kezee 1996.
The wide
scope of accounting can be recognized when one considers the diversity of
economic entity which cut across sizes and bounders.
Accounting
is the language used to cover the result of the entity’s endeavours, to the
interested parties inform of financial statement and the financial statement
has been identified as follows:
Statement
of accounting policy
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