THE USE OF ACCOUNTING INFORMATION AND DECISION-MAKING IN ORGANISATION
ABSTRACT
This study deals with the use of
Accounting Information and Decision-making in organisation (A case study of Muxol
Paint Company) One of the most important functions of management which is
decision making has been described as a purposeful choosing from a number of
alternative courses of action.
The
management can only come up with a good decision if they were able to get a
correct accounting information form the accountants as a result of this, there
are the need for research to find out if managers actually provided this
information to the mangers and if they are relevant in the decision making of
the organization.
The following are stated problems
a.)
Inadequate
utilization of available account
b.)
Inadequate managerial expertise
The project work in chapter two
revealed all the accounting information needed by the management for decision
making and the use and users of accounting information.
TABLE OF CONTENTS
Title Page
Approval
Page
Dedication
Acknowledgement
Abstract
Table
of Contents
CHAPTER ONE
1.1 Background
of the Study
1.2 Statement
of Problem
1.3 Research
Questions
1.4 Objectives
of the Study
1.5 Research
Hypotheses
1.6 Significance
of the Study
1.7 Definition
of Terms
CHAPTER TWO
2.1 Literature
Review
2.1.1 The Concept of Accounting Information System
2.1.2 Functions
and Users of Accounting Information
2.1.3 The Characteristics and Objectives of
Accounting Information
2.1.4 The
Decision Making Process
2.2 Theoretical/Conceptual
CHAPTER THREE
3.1
Research Methodology
3.2 Source
of Data
3.3 Research
Design
3.4 Research
Population /Sample Size
3.5 Instrument
Used
3.6 Data
Analysis Techniques
CHAPTER FOUR
4.1
Presentation And Analysis of Data
4.2 Data
Analysis
CHAPTER FIVE
Summary, Conclusion and
Recommendations
5.1 Summary
5.2 Conclusions
5.3 Recommendations
Bibliography
CHAPTER ONE
1.1 BACKGROUND OF STUDY
Accounting can be defined as a system
of collecting, recording and summarizing business and financial transaction and
analyzing, verifying and report the results. (Olaoye 2006).
It
is also a measurement and communication system to provide economic and social
information about an identifiable entity to permit uses to make informed
judgments and decision leading to an optimum allocation of resources and the
accomplishment of the organisational objectives (Mbanefo 2007). Accounting
information on the other hand can be described as a data that has been analyzed
and transformed into information to enable users to make or take decision
(Adepeju 2009).
Decision
making has been described as a purposeful choosing from a number of
alternatives. The need for a decision arises in business because a manager is
face with a problem and alternative course of action need to be taken in order
to provide solution to the problem.
Accounting
information system in an organisation is an important machinery to improve the
efficiency of the organisation and support its competitiveness through proving
management with good financial information that will enhance making decisions
regarding planning and other decision (Mohammed, 2009), the purpose of accounting
records is to provide information about the economic affairs of an organisation
that will enable mangers to plan and control the operation of the business in
order for useful decision to be taken.
Accounting
information is not only necessary for the evaluation of the past and keeping
the present, it is also useful for planning the future of the enterprises,
based on the above, it is necessary to note that only good and sound accounting
information can lead to good decision and thereby enhancing the efficiency of
the organisation.
1.2 STATEMENT OF THE PROBLEM
It has been observed that many
organisation are faced with challenges on their accounting system due to the
fact that adequate information is lacking in the system, books of account are
not properly recorded and there is perpetration of fraud. These had caused
setbacks to many organisations even to the extent that many have to wind up
their operations.
Against
this background, therefore, this study is set to examine whether accounting
information can has impact on organisational decision making process.
1.3 RESEARCH QUESTIONS
The
study examines Accounting Information and Decision – Making in an Organisation
using Muxol Paints as a case study.
For
the purpose of this research work, the following research question are
considered;
i. What impact does
accounting information have on decision- making?
ii. What effect does
accounting information have on the achievement of organisational goals?
iii Does improper
accounting record affect the accounting information of an organisation?
iv What is the
managerial effect on accounting information and decision –making in an
organisation?
v. Can
accounting information enhance decision making?
1.4 OBJECTIVES OF THE STUDY
The
broad objective of the research study is to examine accounting information and
decisions making in an organisation
The
specific objectives are;
1. To examine the
impact of accounting information on decision – making.
2 To investigate
issues in organisational accounting
3. To examine the
challenges of organisational accounting system
4. To examine how
accounting information can be derived or achieved in organisation.
5. To examine how
correct, timely and consistence accounting information helps in improving the
efficiency of operation.
1.5 RESEARCH
HYPOTHESES
The following are the research
hypothesis that will be tested for the purpose of this study.
Ho: Accounting information has no impact on decision making of an
organisation
Hi: Accounting information has
impact on decision making of an organisation
1.6 SIGNIFICANCE
OF THE STUDY
The need for information is basic for
concrete and explicit management decision to ensure the success and survival of
an organisation and since the aim of Muxol Paint like any other business
organisation is “profitability” Accounting information is indispensable to
achieve this goal. Hence this research work studies how effective and efficient
the instrument of good accounting information and decision making is in an
organisation.
The
significance of this study will enable Muxol Paint Company to improve in
efficient and effective decision – making and eradicate the weal accounting
systems by making sure that every staff in the account department is co –
operative and fully conscious of his or her role in the department so as to
produce good accounting information and enhance decision – making.
1.7 DEFINITION OF TERMS
ACCOUNTING:- Is the act of recording,
classifying, summarizing, interpreting and communicating accounting information
in a significant manner and in form of money transaction and events which are
in part at least of financial character and interpreting the result thereof for
decision – making.
ACCOUNTING INFORMATION:- These are
data that have been processed in accounting manners for the purpose of decision
– making.
ACCOUNTING CONCEPT:- These are
the fundamental unchangeable pillars and foundation of accounting building
blocks of accounting framework.
ACCOUNTING THEORIES:- Body of
accounting knowledge upon which the teaching and practice of accounting are
based.
ACCOUNTING PRINCIPLE:- These are
rules and connection which have been adopted as a general guide to action by the accounting profession.
ASSETS:- Valuable things owned by an
organization. It may either be tangible or intangible assets.
BOOK – KEEPING:- This is concerned with the
collection and accurate recording of the financial data.
CONTROL AND
COORDINATION:- A process of ensuring that the cause of a action is
maintained and that desire aims are achieved. This is done through the use of
budget and actual data.
COST CENTRE:- This is the smallest division where
cost are collected. It is defined in terminology as a location, function or
items of equipment in respect of which cost may be ascertained an related to
cost units for control purpose.
FINANCIAL STATEMENT:- This is the
statement that summarized various information of entity’s financial affair.
STEWARDSHIP ACCOUNTING:- The
practices by which productive resources owned by one person or group of managed
by another person or group of persons.
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