ASSESSMENT OF ACCOUNTING INFORMATION IN MANAGEMENT PLANNING AND DECISION MAKING (A CASE STUDY OF ZAKI FLOUR MILLS)
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ABSTRACT
The aim of the project is accounting information as a tool for management decision. The work covers various process of account information (management Account, financial account, standard for accounting information). This project will also consider possible ways of using accounting information as a tool for management decision. This project will afford the opportunity of identifying the major importance of accounting information in management for a proper decision making. Also the provided account information allows easy planning and control purpose. Lastly, the project topic assists the information conclusion drawn on he problem and the necessary ways of solving it properly to ensure a perfect management operation.
CHAPTER ONE
1.0 Introduction – – – – – – – 1
1.1 Background of the study – – – – – 3
1.2 Statement of the problems – – – – – 4
1.3 Objective of the study – – – – – – 6
1.4 Research of hypothesis – – – – – – 6
1.5 Significance of the study – – – – – 7
1.6 Scope of the study – – – – – – 8
1.7 Historical background of the case study- – – – 8
1.8 Definition of the terms – – – – – – 10
CHAPTER TWO: Literature Review
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- Introduction- – – – – – – – 13
- Financial accounting – – – – – – 14
2.2 Management accounting – – – – – 15
2.3 Users of accounting information – – – – 17
2.4 Standard for accounting information – – – 20
2.5 The need for accounting information – – – 22
2.6 Presentation of information – – – – – 26
2.7 Over view of external financial statement- – – 27
2.8 Cost calculation – – – – – – – 33
2.9 Ratio and percentage analysis – – – – 35
2.10 Break Even analysis – – – – – – 37
2.11 Financial Decision – – – – – – 37
CHAPTER THREE
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- Introduction – – – – – – – 40
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- Research design – – – – – – – 41
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- Population of study- – – – – – – 42
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- Sample of the study – – – – – – 42
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- Sampling techniques- – – – – – – 43
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- Method of data collection – – – – – 43
- Method of data analysis – – – – – 47
CHAPTER FOUR: Data Presentation, Analysis and interpretation
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- Introduction – – – – – – – 48
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- Interview with the finance department – – – 49
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- Interview question with the management – – 51
- Test of hypothesis – – – – – – 53
CHAPTER FIVE: Summary, Conclusions and Recommendations
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- Introduction – – – – – – – 64
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- Summary – – – – – – – – 64
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- Conclusion – – – – – – – – 67
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- Limitation of the study – – – – – – 68
- Recommendations – – – – – – 69
Bibliography- – – – – – – – 71
Appendix A- – – – – – – – 72
Appendix B- – – – – – – – 73
CHAPTER ONE
1.0 INTRODUCTION
An organization needs qualitative information to function or make decision; the available of such information make the organization to function in the most effective and efficient manner. This information is provided by the accounting system to the management, which uses it primarily to accomplish three (3) broad purposes, viz:
- To provide financial statement to interested external users
- To plan the operations of the organization in both the short and long run.
- To control the result of its operations
In financial accounting, the responsibilities of the accountant ranges from recording and analysis, summarizing and reporting the result of the activities of the organization to creditors, stock holders and prospective investors, government, labour, environmental organization and others. In the case of reports to external users, they are classified for general purpose; they are financial statement, the income statement, the retained earnings, the balance sheet and the statement of financial position. People who protest or enhance their investment in the organization as by other who have a special interest in it use this statement. In management accounting, accountants provide information for use by office within the organization (the managers) rather than for use by other outside the organistion, such information are mainly decision making concerning the internal function organization. Management accounting also provides information to the decision makes for the following purpose:
- Formulation of policies
- Planning and controlling the activities of the enterprises
- Safeguard the assets of the organization
- Disclosure of employee’s area of specialization
- Decision taken alternative cause by action.
Management and financial accounting may be understood by considering the basic goals of financial accounting is to direct forms of operations to maximize income the period measure net income used by the management in making decision to avoid what may be considered as an unwise decision to external user or vice versa. However, the relevance accounting information effective decision making in this research work, the degree of the relationship shall be clearly spelt out and identified.
- BACKGROUND OF THE STUDY
The choice of the topic “Accounting information as a tool for management decision making” has been motivated by the fact that whatever accounting on information is presented to the has been collected, classified and analysis will determine the extent to which it is to be relied upon by the management in order to formulate a favourable decision in the organization.
The project therefore examines the relevance of accounting information to managerial decision making manufacturing companies with a view to highlighting the area of weakness and making necessary recommendations.
It is infact in the light of the above that attempt be made to apprais the essence of accounting information in making decision concerning he use of limited resources, including the identification of the overall organization objectives.
- STATEMENT OF PROBLEMS
Management who thinks that they operate successfully without the use of the information provided by the accountings and up being economic failure to their respective industries, and some times course embarrassment to the organization. Take for instance, the accountant of an organization provide his manager with the information that there is no fund for any programme execution in the company. Despite this information, the manager went ahead an instructed the accountant to draw a cheque payable to a contractor who supplied some materials to the