ABSTRACT
Information as a life wire of any
organization is very vital decision making manufacturing companies take
decision concerning Production, pricing and marketing. Consequently, it is
vital that relevant, timely, reliable, consistent and adequate information
needed is available for managerial decision in order to run the organization
effectively and satisfy interested parties.
This
study is aimed at finding out the extent to which manufacturers use accounting
information and whether there is any positive relationship between the
effective use of accounting information and the quality of decision in
manufacturing companies.
This
study was carried out on one of the manufacturing companies called “max aluminum
PLC, OWERRI, IMO STATE.”
Data collected through the use
of personal interview and questionnaires were sourced primary from field
work. The sample size of this study was
38 using the best of judgment method. However, 35 questionnaires were returned.
Data
collected were compiled and analyzed in tables using simple percentage method,
while chi – square was used for calculation and test of hypothesis. From the
study, it was observed that manufacturing companies make use of accounting
information in decision making which has positive relationship with the quality
of decision of the firms. Finally, a proper keeping of accounting records
should be encouraged from which accounting information will be drawn for
decision making process.
TABLE OF CONTENT
Title
page……………………………………………………………………………………….i
Approval
page…………………………………………………………………………………ii
Certification……………………………………………………………………………………iii
Dedication……………………………………………………………………………………….iv
Acknowledgement……………………………………………………………………………v
Abstract…………………………………………………………………………………………vi-vii
Table
of content…………………………………………………………………………….ix-xi
CHAPTER ONE
1.0
Introduction…………………………………………………………………………….1
1.1
Background
of the study
1.2
Statement
of the problems
1.3 Objective of the study
1.3 Objective of the study
1.4 Research questions
1.5 Research hypothesis
1.6 Significant of the/justification of the
study
1.7 Scopes/Delimitation of the study
1.8 Limitation of the study
1.9 Definition of terms
CHAPTER TWO
2.0 Literature review
2.1 Historical background of research problem
2.2 Theoretical framework
2.3 Nature of accounting information
2.4 The nature of management decision making
2.41 Types of accounting information
2.4.2 Characteristics of accounting information
2.4.3
Sources of accounting information
2.4.4 Decision making and accounting information
2.4.5 Levels of information in Decision making
2.4.6 Effective decision making
2.4.7 Importance of accounting information in
decision making
2.4.8 Application of accounting information in
managerial decision making
2.4.9 Financial ratio analysis
CHAPTER THREE
3.0 Theoretical framework and methodology
3.1 Theoretical frameworks
3.2 Research design
3.3 method of data collection
3.4 Population and sample size
3.5 Validity and reliability on measuring
instrument.
3.6 Methods of data analysis
CHAPTER FOUR
4.0 Data presentation and analysis
4.1 Introduction
4.2 Data presentation, classification and
calculation.
4.3 Test of hypothesis
CHAPTER FIVE
5.0 Summary, conclusion and recommendation
5.1 Summary
5.2 Conclusion
5.3 Recommendation
Bibliography
Appendices
CHAPTER ONE
1.0
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Organization is included
as part of the whole economy. It is a network through which people (managers)
in authority order all action and obtains information they need to meet
responsibility. Organization is broadly divided into two (2) parts.
(I)
Non-profit
oriented organization and
(II)
Profit
oriented organization
Information is the life
wire of organization, the success of any organization whether profit or
non-profit oriented depends particularly on how the information needs of the
different levels of management are met. Information according to Anthony and
Reece (1975 P290) is a fact, datum, observation, perception or any other thing
that adds to knowledge”. Also Cox and Enis (1972) designed information as “any
data which the manager believes will be successful to him in making a
particular decision” information can either be quantitative or non-quantitative
and accounting information happens to be one of the quantitative information.
It is distinguished from other types of information because it is usually
expressed in monetary terms. However, non-monetary information is also included
in accounting reports in order to enhance the understanding of the managers.
This study is about the role of accounting information in managerial decision
making. It seeks to enquire into how monetary and financial information
arranged in a professional accounting manner is used in decision – making.
USERS OF ACCOUNTING INFORMATION
Accounting
information has so many users; these users have different decisions to make and
their information often differ.
The users of accounting information
have been identified to include: B.N Okezie (2008).
(a) Individuals financial institutions
Who may require accounting information determine the
liquidity, profitability and viability of the enterprises.
(b)
Managers
in an enterprise who may need accounting information to measure performance,
plan and control operations.
(c) Employees and customers of an
enterprise who may need accounting information to assess the ability of the
enterprise to produce goods or render services on a continous basis.
(d) Government and regulatory bodies need
accounting information in order to be able to impose and collect taxes, to
regulate certain business activities and to plan, execute, and evaluate
performance, project and policies.
(e) Quasi – government establishments and
agencies need accounting information in order to meet their statutory
obligation (SAS P.4)
It can be seen from the
above that accounting carters for a variety of interests and need, hence it
must respond to the environment and accommodate the any of the environmental
factors. These users constitute importantly to the stakeholders in any
enterprise.
ACCOUNTING INFORMATION AND MANAGEMENT
· Decision making is the prime job of
managers.
· It is convenient to classify
management decision into two categories:
§ Planning decision
§ Control decision
These decisions could be routine or
non-routine in nature
PLANNING DECISION
These
decisions could be made at all levels of management. The objectives of finding
a course of action which is feasible and also accomplished organizational
objectives. A plan cannot be said to exist unless decision commitment of
resources has been made since a major set of organization resource accounting
information is useful in determining the feasibility of plan, cash budget,
capital budget and project balance sheet are example of contributions which
accounting can make to resources planning.
Planning
involves an important concept of management, method of management by objective
(MOB) which simple means those managers and their sub-ordinates will set
objectives and aim at achieving these objectives.
CONTROL DECISIONS
Managers
perform their control operations by adopting an information and control
technique called management by exception this is as a result of the managers
concentrating on aspects of operations that are not operative as planned. Management
by exception is a means of setting standards to measure performance. According
to Anyaogu C.M (2002 P18) the management accounting firm such as statistics on
the state of economy, which are as useful in forecasting sales, study of
population growth on a particular geographical area which is useful in deciding
where to locate new stores, warehouse and statistics on the state of the
industry or industries in which it operates.
For
this study, emphasis is laid on the role played by accounting information
during decision making at top management special attention is paid to
manufacturing companies particularly at this time of structural adjustment and
instability of public policy, where manufacturers will have to depend on local
raw material sourcing.
Although accounting information does
not provides automatic answers to the problem facing manager few, if any of the
business problem can be solved solely be collected and analysis of number. This
is because people making decision begin to bear on their decisions, experience,
value and knowledge which often cannot be subject to quantitative analysis.
1.2
STATEMENT OF THE PROBLEMS
Statement of the problems is problem
to be faced in the affairs of management decision making. Since accounting is a
system of reporting management activities and it will help to facilitate
control process in business activities so as to provide means of making
efficient management decision.
In view of
this, the study intends finding out the essence of accounting information.
(I)
Planning and controlling the affairs of the organization
(II)
Management decision making of the organization
(III)
Determining the financial status of the firm
1.2
STATEMENT OF THE PROBLEM
IT is hoped that from this study, one
can appreciate the usefulness of keeping proper accounting records from which
accounting information are draw which lead managers towards correct decision
either in selection among course of action or evaluation of performance and
general appraisals
1.3
OBJECTIVE OF THE STUDY
From the problems stipulate above,
this work has the following objectives:
1. To ascertain if there is any positive
relationship between the effective use of accounting information and the
quality of decision in manufacturing and the quality of decision in
manufacturing companies.
2. To determine factors that promotes
effective use of accounting information.
3. To determine a convenient means of
transferring accounting information i.e. (means of communication).
1.4
RESEARCH QUESTIONS
In carrying out this study
effectively, the objectives and some of the problem associated with the study
gave rise to the subsequent research questions.
1. It there any positive relationship
between the effective use of accounting information and the quality of decision
in manufacturing companies?
2. Do factors promote the effective use
of the accounting information?
3. Is there any convenient means of
communication accounting information?
The following null (H0) and
alternative (H1) are formulated from the research questions.
1.5 HYPOTHESIS 1
H0: There
is no positive relationship between the effective use of accounting information
and the quality of decision in manufacturing companies.
H1: There
is positive relationship between the effective of accounting information and
the quality of decision in manufacturing companies.
1.6 HYPOTHESIS 2
H0: Factors
o not promote effective use of accounting information.
H1: Factors
promotes effective use of accounting information.
1.7 HYPOTHESIS 3
H0: There
is no convenient means of transferring communicating accounting information.
H1: There
is convenient means of transferring/communicating accounting information.
1.8 LIMITATION OF THE STUDY
a. NON
RESPONSE. The
reluctant of managers to disclose information about their operations poses a
serious constraint to this work.
b. FINANCE. A study of the scope
contemplated in this work require commitment of resources for outside reach of
an average students, in fact curtails the scope of the study. The number of
respondent and geographical spread has therefore been scaled down considerably
of course, it may be agreed that universal applicability of the findings is
consequently jeopardized. While this may be so, it is hoped that the work will
prove to be of some value with its scope.
1.9 DEFINITION
OF TERMS
OBJECTIVES: This is the end towards which activities
of an enterprise are aimed, is the end point of management programmers.
DECISIONS: This is an alternative course or
line of actions which are often irrevocable.
MANAGEMENT ACCOUNTING: This is a process by which systems
are administered. It is also the application of accounting techniques to the
provision of information designed to assist all levels of management in
planning and controlling the activities of the firm.
CONTROL: This means checking, supervising or
measuring actual performances with predetermined or planned results. This is
done with the view of ensuring satisfactory performance and possible feedbacks,
which will aid review of plan it leads to taking action to correct any noticed
variance during production.
ACCOUNTING SERVICE FUNCTION: This is the services in which
accounting systems provide through its techniques and methods of accounting
information which aids management in planning, controlling and taking decision.
ACCOUNTING INFORMATION: This is a set of information which
describes an account for a utility.
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