THE IMPACT OF ACCOUNTING INFORMATION ON DECISION MAKING PROCESS (A CASE STUDY OF ANAMMCO LTD ENUGU)
This research work is in the impact of accounting information on decision making process with a particular reference to Anammco Ltd Enugu. The research was geared towards understanding the operation in Anammco Ltd with an emphasis on decision making process. The problems, prospects and implications of the programme were also examined. The objective of the study is the therefore expose to various departments the proper way to embark on effective accounting information. One hundred and seventy questionnaires were distributed of which one hundred and sixty four were completed and returned. Also related literatures dealing with the impact of accounting information were examined. Some personnel of Anammco ltd were interviewed and secondary data were obtained from books. The data collected were later analyze and interpreted. From the study, it was discovered that accounting information is an important aspect of management policy for higher productivity, efficiency and increased performance, though it involves a huge financial obligation. Various organization should therefore try and embark on accounting information on decision making for successful running of their organization.
TABLE OF CONTENT
Title page- - - - - - - - - i
Approval page - - - - - - - - ii
Dedication - - - - - - - - iii
Acknowledgment - - - - - - - iv
Abstract - - - - - - - - - v
Table of content - - - - - - - vi
1.0 Introduction - - - - - - - 1
1.1 Background of the study- - - - - 1
1.2 Statement of the problems - - - - 5
1.3 The objectives of the study are therefore - 7
1.4 Scope of study - - - - - - - 8
1.5 Research questions- - - - - - 9
1.7 Significance of the study- - - - - 10
1.8 Definition of terms - - - - - - 11
2.0 Literature Review - - - - - - 15
2.1 Brief history in the development of the company
Anammco Ltd- - - - - - - 17
2.2 Accounting nature - - - - - - 19
2.3 Accounting objectives - - - - - 20
2.4 Values of information related to decision making
Process - - - - - - - - 21
2.5 The impact of accounting in the Anammco Ltd- 24
2.6 Characteristics of accounting - - - - 25
2.7 Users of accounting information - - - 29
2.8 Tools of accounting information - - - 33
2.9 Kinds of accounting tools - - - - - 35
2.9.1 Financial accounting information and tools - 37
2.9.2 Analysis of financial statement - - - 38
2.9.3 Significance of ratio analysis- - - - 43
2.9.4 Funds flow analysis - - - - - - 44
2.9.5 Cost and management accounting information tool techniques and models for decision making - 46
2.9.6 Cost classification - - - - - - 48
2.9.7 Cost volume project analysis- - - - 48
2.9.8 Linear programming and other types of cost
analysis - - - - - - - - 49
2.9.9 Summary of the literature review- - - 54
3.0 Research methodology - - - - - 56
3.1 Research question - - - - - - 56
3.2 Research design and methodology- - - 56
3.3 Area of study - - - - - - - 57
3.4 Population of the study - - - - - 57
3.5 Sample and sampling procedure- - - - 59
3.6 Instruments for data collection - - - 59
3.7 Validation of the instrument - - - - 60
3.8 Sources of data collection - - - - 60
3.9 Reliability of the instrument - - - - 61
4.0 Presentation of data - - - - - - 62
4.1 Analyzing of data - - - - - - 63
4.2 Analysis of interview - - - - - 63
4.3 Data presentation question - - - - 64
4.4 Test of hypothesis - - - - - - 66
4.5 Interpretation of data analysis - - - - 72
5.0 Summary of Findings, Conclusion and
Recommendations - - - - - - 82
5.1 Discussion of findings - - - - - 84
5.2 Conclusion - - - - - - - 86
5.3 Recommendations - - - - - - 87 Bibliography - - - - - - - 90
Appendix I - - - - - - - 92
Appendix II - - - - - - - 93
This research work on the impact of accounting information on decision making process, a study of Anammco LTD Emene is geared to X – ray the impact that accounting information exert to improve the decision making process of a company with reference to ANAMMCO LTD EMENE ENUGU.
Decision making is simply making a choice out of several alternative or it is the process of studying and evaluating two or more available alternatives leading to a final choice.
1.1 BACKGROUND OF STUDY
With the view of being independence, Nigerians had the view of a better tomorrow. We were able to feed ourselves and provide ourselves with social, economic and political endeavor. Subsequently, our hopes seemed unattained which made the country become as strong as the Iroko tree. The idea had, was that it would be worst for Nigerians to see our economic adverse situation raising its ugly head. This economic crisis has made financial institutions industries (large or small scale) go into distress at alarming rate and those who service this financial problem has onset prepared their firm against this ugly situation by mapping out all kinds of strategies example increase in price of their goods, adopts favorable production tool, engage in marketing etc.
Any business, firm, establishment that wants to survive this present day bad economy in Nigeria must make a right decision, map out a good and competitive strategies to carry out his/her business successful. The price of any convincible item from garri and bread to electronic and educational items not to talk of the life wire of every man standing that is petrol which has presently made life unable for the adjust.
The economy is really in distress, the era of mile thumb is employing it, is a sure way for final organizing human and natural organization, effective planning and decision making process. Other factors are stage inflation, taxation, economic and political empowerment in this research accounting, Cost accounting as well as management accounting. There are other branches of accounting that would be favorable “Financial Accounting” is that part of accounting which covers the classification and recording of actual transactions of an entitling in monetary terms in accordance with established concepts, principles of accounting standards and legal requirements. Its involvement has metamorphosed into a very complex web of inter-grated financial information system which modern organization cannot do without.
It presents a broader, more overall view of the organization with primary emphasis upon classification according to type of transaction rather cost and management accounting emphasis on functions, activities, products and process and internal planning control. Cots accounting and management accounting are very much intrinsically inter that is to say that the different between the two superficial is that definition of management accounting is the provision of information require by the management for use, identifying, presenting and interpreting of information used for:
i. Formulating strategy
ii. Planning and controlling activities
iii. Decision taking
iv. Optimizing the use of resources
v. Disclosure to shareholders and other external to entity
vi. Disclosure to employees
vii. Safe guiding assets
There are various ways one can involve or participate in management to see that there is effectiveness.
i. Formulation of plans to meet objectives (strategic planning)
ii. Formulation of short term operation plans (budgeting profit planning)
iii. Acquisition and use of finance
iv. Reviewing and reporting on systems and operations
v. Corrective measures to bring plans and results.
vi. Communication of financial and operating information.
Cost accounting as the part of management accounting which establishes budget and standard cost of operations, department or products and the analysis of variance profitability or social use of funds.
1.2 STATEMENT OF THE PROBLEM
Nigeria has a very difficult economic situation some aspects of it are experiencing from disability of inflation rate whereas other aspects are worse hit by deviating depression for our years now, the emphasis is on the restructure measures (without regards to our socio-economic background) which were applied to the area of our economist who can dictate. Economy is still running heedlessly into woods culminating in failure of business and pauperization of a great majority of Nigerians under the present economic dispensation, very difficult to float with those who are unable to submerged.
In recent time, the use of relevant information and techniques in decision making process of organization, individuals, corporate bodies are without questions. Application of accounting information make a clear designation about enterprises, corporate bodies, misread bank etc. in all cases accountant used banks as a certain strategies for the collection, analyzing, interpreting. Presented and communicating the information for the use of interested parties it remains the adaptation, application and implement of those information for the benefit of organization of there were being done as at when due, then multifarious failures in the business sector and domestic even government would not have been the problem. Then users are actually aware of these various accounting information and apply them in their production or investment on decision making process at is based on accounting information actually raised efficiency level via cost minimization and wealth maximization.
In summary, the problem encountered in course of this work is time factor.
1.3 THE OBJECTIVES OF THE STUDY ARE THEREFORE
1. To determine whether information generated by the accounts department are effectively applied in the productive, production and decision of the organization.
2. To know the extent to which these information fulfill the basic roles of cost minimization, proper allocation of scare resources and improvement in production efficiency.
3. To determine whether there are problems in generating and utilizing the information necessary for production and to suggest possible solutions to the problem.