ABSTRACT
The study centers on the “Use of Accounting as a Management
Tool” (A case study of Anambra State Agricultural Development Project, Awka).
In pursuance of this investigation research objectives and
hypotheses were formulated. Both primary
and secondary data were collected and the data were then presented, analyzed,
interpreted using textual, graphic and tabular modes of data presentation. The formulated hypotheses were also tested
using chi-square as the test statistic.
Based on the above, it was found that Anambra State
Agricultural Development Project uses Accounting as Management Tool. All their financial transactions of Anambra State
Agricultural Development project are recorded in the appropriate books of
accounts. From these books, revenue
projections, expenditure estimates, financial statements, statements of source
and application of funds are prepared.
Management of Anambra State Agricultural Development project uses ad
inter-alia each of these prepared statements as a tool for decision-making,
evaluation of the financial strength, profitability and future prospects. Continuous type of budget is used for
planning and controlling purposes.
Economic rate of return is used to evaluate projects. Profitability is evaluated in terms of the
benefits, which the given community derives from a given project.
With reference to the findings, the researcher recommends
that; quarterly and mid year financial statements should be prepared to
highlight the key variables affecting achievement of the objectives of Anambra
State Agricultural Development Project; Budget should be compared with actual
result so as to find out variables where they exist and make amendments where
necessary; all the problems identified from the respondents should be
addressed; there should be proper authorization and documentation; only
qualified staff are to be employed; staff work schedules should be attainable with
the actual working hours, ad accounting and computer training programmes should
be organized at reasonable intervals.
TABLE OF CONTENTS
Approval page
Dedication
Acknowledgement
Abstract
Table of content
CHAPTER ONE
Introduction
1.1
Background
of the Study
1.2
State
of the problem
1.3
Objective
of the study
1.4
Justification
for the study
1.5
Plan
of the study
1.6
Scope
and limitations of the study
1.7
Definitions
of some terms
References
CHAPTER TWO
Review of related
literature
2.1 The importance and scope of Accounting as a
management tool
2.2 The function of Accounting as a management
tool.
2.3 The objectives of accounting a management
tool
2.4 Problems and Prospects of Accounting as a
management tool
2.5 Hypothesis formulation
References
CHAPTER THREE
Research Design and
Methodology
3.1 Research Population/Area of Study
3.2 Determination of sample size
3.3 Sources of Data
3.4 Analytical Technique
References
CHAPTER FOUR
4.1 Presentation, Analysis and Interpretation
of Data
CHAPTER FIVE
5.1 Findings and Summary of the study
5.2 Policy Recommendations and Conclusion
APPENDIX
Bibliography
Questionnaires Introduction
Questionnaire
Interview Guide
CHAPTER
ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Accounting, unlike the other natural sciences, is not based on
fundamental laws or absolute precepts.
It has evolved over many years through trial and error, and its
continual improvement rests on a basis responsive to the requirements of users
of financial statements. The domain of
financial accounting is therefore visualized as requiring attention at four
levels: postulates are the antecedent conditions or essential prerequisites to
principles; the principles must meet the supported by the principles. This framework of accounting standards and
guidelines defines the area accounting theory.
Theories are generalizations, which serve to organize otherwise masses
of data, and which thereby establish significant relationships in respect of
such data.
Accounting theory is therefore the logical reasoning in the form of a set
of broad principles that provide a general frame of reference by which
accounting practices can be evaluated, and which guide the development of new
practices and procedures. It thus
provides a coherent set of systematic principles that form the general structural
framework for the evaluation, and development of sound accounting
practices. It presents the value
judgments upon which accounting principles, concepts and polices are
based. Theses policies regulate moderate
and direct practices and lead to reports which are used by decision makers.
Without a good knowledge of accounting theory, accounting becomes mechanistic,
routine and a repetitive drudgery.
Osisioma (1986: 40) stated that;
…Accounting involves the collection
compilation and systematic recording of business transactions in terms of
money, the preparation of financial reports and the use of these reports as
tools of management …
Management is heavily dependent on accounting operation facts. Management is regarded as a process of
converting information into action and accounting is the source of most of the
information. Accounting is a system of
principles and techniques that permits the recording, classification,
accumulation, presentation and interpretation of financial information so that
past performance, present condition and future planning can be evaluated. The decision making process of accounting
normally involves planning and control.
Accounting formalizes plans be expressing them in the language of
figures as budget and control as performance reports which compare results with
plans and spotlight deviations or variances form plans.
The importance of accounting information in management can be applied to
any organization without regards to its size.
Willsmore (1971: 1)observed that;
…Even in the very personal business
management can only take place through figures; results, reporting and the man
who doesn’t understand that must fail…
Managing a business is a matter of deciding what should be done, seeing
to it that the means are available and getting people employed in the business
to do it. At every step in this process,
management is faced with alternatives, and every decision, to do something or
to refrain from doing something involves a choice. In most cases, the probability that a good
decision will be made depends on the extent and validity of the information
that the manager has about the alternatives and their consequences information
which flows from the accounting records or which are developed by special
analysis of accounting data constitutes the basis on which a wide variety of
business decisions are made. Accounting
involves the process of identifying, measuring and communicating economic
information to permit informed judgments and decisions by users of the
information. The success or failure of
accounting as a management tool will depend upon the philosophy on which it was
established and the attitude of management towards it as well a the skills
involved.
1.2
STATEMENT OF THE PROBLEM
The research problem is the use of accounting as a management tool. The success or failure of accounting as a
management tool will depend upon the philosophy on which it was established and
the attitude of management towards it.
Accounting serves the interest of business therefore; it must keep pace
with the various stages of business development. Management Accounting is concerned with the
application of accounting and statistical techniques to the specific purpose of
providing and interpreting information designed to assist management in its
function of promoting maximum efficiency.
It focuses on the internal environment of business, and provides
information for such decisions of the firm as an inter-alia make or Buy,
Replacement, Pricing, Cost Reduction Decisions.
The techniques applied for the analysis are both statistical and
accounting in nature – Budgeting and Budgetary control, standard costing and
variance analysis, direct costing and Break-Even Analysis and Project Cost
Analysis.
Accounting, the traditional companion of management in decision making,
has to develop new and better techniques for the improvement of management
decisions accounting has risen to the occasion, re-defining traditional
concepts to meet the new challenges, and developing whole new techniques where
they had never existed.
1.3
OBJECTIVES OF THE STUDY
This research has the major objective of examining the use of accounting
as a management tool by Anambra State Agricultural Development Project.
Specific objectives include;
Ø
To identify the present accounting tools;
Ø
To examine the objectives for the adoption;
Ø
To assess the basis for developing the
accounting tools;
Ø
To examine how the accounting staff are aware of
the accounting tools in use
Ø
To identify the problems affecting the effective
implementation of the accounting tools;
Ø
To examine the qualities of the accounting tools
in use; and
Ø
To advance recommendations.
1.4
JUSTIFICATION FOR THE STUDY
A major reality of modern business management in a free enterprise
economic system is the advanced state of competition and rivalry, where only
the fittest enterprises survive. With
the wealth creation and maximization of business motive ever s current,
management continues to remain under increasing obligation to improve its share
of the market, its assets, the value of its stock in the capital market, its
credit worthiness and its overall earning potentials. These, in turn, require an improvement in the
quality of decisions. Management should
not for instance, miss an opportunity to increase its profit due to a mistake
in the understanding of the real factor that determines profit. Therefore, in order to respond effectively,
to the challenges of the times, management requires good decision analysis
procedures, which will emphasize the relevant factors in business decisions.
The study will x-ray the extent of use of accounting as a management tool
by Anambra State Agricultural Development Project, as a basis for offering
informed suggestions for improvement on the use of accounting as a management
tool.
It is envisaged that the findings, suggestions and recommendations of
this study will be beneficial to both accountants and management of Anambra
State Agricultural Development Project and other establishments, who will be
interested in seeking the best use of accounting to achieve corporate result.
Specifically, this study will highlight the strength and weaknesses of
each accounting tool in use by Anambra State Agricultural Development
Project. It will also recommend those
accounting tools that ill result in effective management.
This study will serve as a reference material for future research project
on the same topic or related topic.
Finally, the outcome of this study will be useful to the researcher, as a
partial fulfillment for the award of Higher National Diploma in Accountancy of
the Institute of Management and Technology (I.M.T), Enugu.
1.5
PLAN OF THE STUDY
For purposeful completion of this study, the researcher therefore, plans
the study as follows:
The whole study is subdivided into five chapters starting from the
introduction, review of related literature, research design and methodology,
analysis of data, findings and summary and finally policy recommendations and
conclusion.
Introductory chapter will include; Background of the study, Statement of
the problem, Objective of the study, Scope and Limitation of the study and
finally definition of terms and references.
Chapter two which is review of related literature will be subdivided into
sub-titles. It will also include
hypothesis formulation and references.
Chapter three, which covers research design and methodology will include;
the population to be samples, sample frame, size and technique, as well as
method to be used in sourcing data. The
researcher will use both secondary and primary data. This chapter will also indicate the
statistical techniques to be used sample size determination formular and
chi-square for hypothesis testing.
Chapter four is the analysis of data.
Here textual, tabular, percentages, averages and graphic modes of
presentation will be used in presenting and analyzing data collected.
Chapter five will include research findings and summary of the
study. This will be deducted from the
analysis of data; it also covers policy recommendations and conclusion will be
based on the possible findings of this study.
The preliminary pages include; fly text, title page, approval page,
dedication, acknowledgement, and table of contents, list of tables and figures,
abstracts …
1.6
SCOPE AND LIMITATIONS OF THE STUDY
The scope of this study is focused on the use of accounting as a
management tool. The scope also covers
accounting personnel of Anambra State Agricultural Development Project at the
Headquarters.
This study was not without limitations – Apathy on the part of some of
respondents, inaccessibility of some management staff, Red-tappism, finance and
time.
These limitations not-with-standing, the findings of this study are still
very reliable. Satisfactory efforts were
made to ensure that the research was carried out under conditions that ensured
reliable and valid conclusions.
1.7
DEFINITION OF SOME TERMS
Budget: A formal expression of management plans
in quantitative and financial terms.
Management: A social system entailing responsibility
for the efficient planning and regulation of the operations of an enterprise,
with a view to attaining set objectives.
Objective: The end towards which activities of any
enterprises are aimed, the end point of a management programme.
Planning: The process of setting goals and objectives,
formulating strategy and deciding among alternatives course of action.
Profit: The increases in the net value of the
assets of a business over a given period, which has arisen as a result of
successful trading and not by means of capital adjustment.
Accounting: This is a systematic means of writing an
economic history and plans of an organization in both quantitative and
financial manner so that facts can be revealed, and properly analyzing such
fact for the purpose of advising management.
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