Accounting As An Aid To Management Planning And Control In Business Organization
This study determined accounting as an aid to management planning and control in business organization. The study was conducted using descriptive correlation design, the target population of study was 150, and the sample size employed was 109, the purposive sampling was utilized to select the respondents, using questionnaire techniques.
The study established that there is a significant relationship between accounting and the level of management planning and control. It concluded a positive correlation between accounting and the level of management planning and control. The study recommended that, companies should invest in accounting if they must realize better planning and control, faster financial reporting and availability of financial information.
1.1 Background of the Study
In managing an organization and implementing an internal control system the role of accounting is crucial. An important question in the field of accounting and management decision-making concerns the fit of accounting with organizational requirements for information communication and control (Nicolaou, 2000).
Although the information generated from accounting can be effective in decision-making process, purchase, installation and usage of such a system are beneficial when the benefits exceed its costs. Benefits of accounting can be evaluated by its impacts on improvement of decision-making process, quality of accounting information, performance evaluation, internal controls and facilitating company’s transactions, Regarding the above five characteristics, the effectiveness of accounting is highly important for all the firms. accounting is defined as a computer-based system that processes financial information and supports decision tasks in the context of coordination and control of organizational activities (Burns, et al, 1991)
Initially, accountings were predominantly developed “in-house” as legacy systems. Such solutions were difficult to develop and expensive to maintain. Today, accountings are more commonly sold as prebuilt software packages from vendors such as Microsoft, Sage Group, SAP and Oracle where it is configured and customized to match the organization’s business processes (Wilson, 1996).
As the need for connectivity and consolidation between other business systems increased, accountings were merged with larger, more centralized systems known as enterprise resource planning (ERP) Before, with separate applications to manage different business functions, organizations had to develop complex interfaces for the systems to communicate with each other. In ERP, a system such as accounting is built as a module integrated into a suite of applications that can include manufacturing, supply chain, human resources. (Borthick,A. 1990) argue these modules are integrated together and are able to access the same data and execute complex business processes. With the ubiquity of ERP for businesses, the term “accounting” has become much less about pure accounting (financial or managerial) and more about tracking processes across all domains of business. (McCarthy, 1987) Some research studies have been undertaken on the accounting and management practices of large companies, small firms, manufacturing companies, telecommunication companies, and so forth in UK, USA, and Belgium using a survey based approach to identify the push factors for firms to adopt good accounting, to investigate the association between accounting and management, In Sweden research was carried out with the purpose to explore relationship between ACCOUNTING and management of firms.
(Smith and Begemann 1997) published an article on ACCOUNTING in Africa, specifically in South Africa where they emphasized that those who promoted accounting theory shared that management information system and management planning and control. This article evaluated the association between traditional and alternative accounting and management function.
After the collapse of the Somalia government, in 1991 Somalia was totally neglected and many of Somalia intellectuals started a business in the telecommunication company services to develop and deliver services based on the appropriate accounting and management planning and control. According to (Balm, 1996), As result of today’s increasing competition and due to rapid changes in technology, most managers in telecommunication companies undertake extensive accounting and management, the managers deeply analyse the effects of the preparation accounting in order to create strong internal control, which consists of all measures employed by the organization for that purpose of safeguarding its resources against the waste, fraud and inefficiency in promoting accuracy and reliability.
1.2 Statement of the Problem
Managers are forced to make decisions which can affect the performance of a company if they do not have enough accounting information. The problems faced by the telecommunication companies include weak internal control which leads to poor performance, misuse of the company’s information, and poor management’s planning and control. The accounting is expected to provide information to all levels of management, accounting information could help telecommunication firms to manage short-term problems in areas such as costing, expenditure and cash flow by providing information to support monitoring and control. In view of this discrepancy, it became imperative that a study be made to evaluate effectiveness of accounting in management planning and control.
1.3 Purpose of the Study
This study determined the correlation between accounting and management planning and control in selected firms in Lagos State, Nigeria.
1.4 Research Objectives
- To test the hypothesis of no significant relationship between of accounting information and management planning and control.
- To generate new knowledge for further research in accounting and management planning and control.
- To validate existing information about accounting and management based on the theory to which this study is based
1.5 Research Questions
This study sought to answer the following research questions:
- What is the extent of accounting used in the selected firms?
- What is the level of management planning and control in the selected firms?
- Is there any significant relationship between the extent of use of accounting and the level of management planning and control in the selected firms?
H0: There is no a significant relationship between the extent of accounting and management planning and control.
1.7 Scope of the Study
The study was conducted in selected telecommunication firms in Lagos State, Nigeria. This study was intended to establish the extent of accounting and the level of planning and control, and further to investigate if there was a significant relationship between the extent of accounting and the level of management planning and control. The respondents who participated in this study were staff members from the selected firms, in Lagos State, Nigeria.
1.8 Significance of the Study
The following disciplines will benefit from the findings of the study.
The employees of the selected firms will recognize the roles they have to play in fulfilling good accounting practices in order to maximize the wealth of the firm.
The managers of the concerned firms will aim at achieving the goal of adopting good accounting in order to realize a satisfying level of management and ease in planning and control.
The firms’ policy makers & planners (CEO, Board of directors, Shareholders & managers) will be able to develop relevant standards of accounting level for their respective firms.
The future researchers in this area will utilize the findings of this study to embark on a related study.
1.9 Operational Definitions of Terms
Accounting refers to a system of collection, storage and processing of financial and accounting data that is used by decision makers.
Management refers to the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively.
Decision-making refers to choosing a course of action from among alternatives which. If there are no alternatives, then no decision is required.
Findings, Conclusions and Recommendations
5.1 Summary of Findings
This study was guided by four objectives which comprised of these objectives (I) to determine the profile of the respondents in terms of age, gender, qualification, experience, in the telecommunication companies (Il) to examine the extent of the accounting of selected telecommunication companies (Ill) to determine the level of management planning and control of selected telecommunication companies (IV) to establish if there is a significance relationship between the extent of the accounting and the level of management planning and control of telecommunication companies (MTN and GLO).
The first objective was to determine the extent of the accounting of selected telecommunication companies. The findings revealed that accounting provides data collection, information and control. A good number of the respondents agreed on the above item which was indicated by a mean average of 2.10, 2.36 and 1.99 which was interpreted as fair in table 3A, 3B and 3C respectively.
The second objective was to examine the level of management planning and control in selected telecommunication companies. The mean index indicated that the degree of the management planning and control is 2.18. Accordingly, the findings revealed that the majority of the respondents have agreed that the management planning and control indicators were fair.
The third objective was to determine if there is a relationship between the extent of accounting and the level of management planning and control for selected telecommunication firms, and the resultant correlation computed as 0.635 with a level of significance at .000 that shows there is a significant relationship between the two variables, Based on these findings the null hypothesis of the researcher was rejected, which leads to a conclusion that the two variables accounting and management planning and control have strong positive relationship, if the mean is greater than 0.05 there is a correlation. The finally the theory approved because theory was used in hypothesizing a relationship between the extent Accounting and level of management decision.
Based on the findings of the study generated the following conclusions based on the purposes of the study:
Finding indicated a positive significant correlation between accounting and management planning and control in selected telecommunication firms in Lagos State Nigeria. Basing on this finding, the null hypothesis is rejected and the researcher concludes that accounting is significantly related to the level of planning and control by managers, This is because of the correlation of 0.635 and the level of significance at 1000. It also concludes that accounting directly influences the level of planning and control by managers of the selected telecommunication companies under this study in terms of quality of accounting information, internal control and facilitation of the company’s transaction process.
The researcher has argued in this report that accounting is effective in helping managers make better decision for the smooth running of their companies. The findings have also shown that the use of accounting lead to better decision-making by managers, more effective internal control systems, enhancement of the quality of financial reports, and facilitation of financial transaction processes. It is against this background that the recommendations below are made. Despite its limitations, this study should pave way for future research in this area. Basing generalizations on the findings of this study, the researcher recommends that:
- Companies should invest in accounting if they must realize better planning and control, faster financial reporting and availability of financial information.
- Last but not least, the company staff (financial managers) must undergo training in order to use the accounting effectively.
Avenues for future research could be:
- Analysis of the effectiveness of Accounting with corporation of accounting designer companies,
- Study of the extent to which factors such as inflation, human resource accounting etc.
Accounting As An Aid To Management Planning And Control In Business Organization
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