Accounting As A Management Tool For Decision Making

Project and Seminar Topics with material for Banking and Finance

Project and Seminar Topics with material for Banking and Finance

Chapter One

1.0 Introduction

1.1 Background Of The Study

Accounting is often said to be the language of business this because so since money is the life-line of every establishment no matter the purpose for which it is instituted. The use of money now brings about what is known as accounting i.e keeping records of the monetary transaction of an organization. Accounting in its entirely has grown for beyond record keeping to include analyzing and interpreting of those items in the record.

The accountant should be concerned with more than the record keeping phase of accounting and get interest in the relationship between the financial results and events which have created them. A researcher should study the various alternatives open to the firms and use his accounting experience to aid the management to select the best plan of action.

The following questions may arise how to do business executives know whether a company is earning profit or incurring losses? How do they know whether the company is solvent or insolvent and whether it probably will be solvent say a month form today? The answer to these questions in one word is accounting. Accounting is an art of records busies transactions in a methodical manner so as to show the true state of affairs of a business at any particular point in time and the surplus or deficiently which as accrued during a specified period.

The owners and managers of an organization will need some accounting statement issued by the accountant to know if the business is operating at profit or loss.

Managing a business when stated simply is matter of deciding what should be done. Seeing to its that the means area available and getting people employed in the business to do it. Management accounting therefore is concerned with measuring the economic consequences and implications of management decision. Accounting information provides the management with information bearing on the efficiency of past operations and current active as projections of probable future results.

In an accounting system designed to aid all grades of manager. The figure will not only be shown as overall totals for the business but the will also be analyzed as far as practicable and economical to demonstrate the contribution of each manager to final result. The integration of data relating to the efforts of the various managers will help general or overall management to achieve one of its fundamental tasks that of co-ordination if the figures are submitted in a form which suggests a corrective action required to over come inefficiency management will have grounds for the exercise of another its basic function of control. At every step in the process management is faced with alternatives and every decision to do some thing or to retrain form doing something involves choice.

Decision making is one of the primary purpose pf instituting management in an organization and this cannot be properly carried out in a situation where the management has no information on the financial aspect of the establishment.

Accounting and decision making in the following way what prices should the organization set on its products if production is increased what effect will this have on the cost of each unit of production? Will it be necessary to borrow from the bank? How much will cost increase if a pension plan is established for employee? Is it more profitable to produce and sell product. A or product B? should a given part be made of bought form suppliers should an investment be made in new equipment? All these calls for decision which in part depend upon accounting information (cost accounting) cost accounting information aids the management of a manufacturing out lift in deciding on the above options. In order word no intelligent business decision could be made without the use of accounting information.

Accounting information when presented to the management will expose the activities of the establishment as it concerns their relationship with the outside world and its operational performance it also provides the information concerning the assets and liabilities of the organization at every given time. The use of accounting as a management tools demands that figures relating to past operations shall be presented and used primary as guides to the future. Accounting to Osisioma accounting is a way to give management the financial information and controls it needs to run a profitable business or an efficient organization. It is a system of principles and techniques that permits the recording classification accumulation presentation and interpretation of financial information so that past performance present condition and future planning can be evaluated.

The best form of comparison involves the use of carefully assessed standard of the results which ought to be achieved in the circumstances of the business concerned if an enterprise is to be successful there must be reliable planning it must be planning which will able to assimilate changes in conditions which may occur and which are at present unforeseen. It is in this field that modern accounting techniques provide their greatest services to industry in general and to managers in particular and it is on the basis of sound financial accounting that this service is achieved.
Proper accounting in on doubt enhances effective management decision making

1.2 Statement Of Problem

This study attempt to assess how for accounting helps management in making favourable decision relating to the organization particularly management decision. To know the council (WAEC) Enugu zonal office and to determine the relationship between the decision of the management on such factors as.

  1. Extent to which they use the information supplied
  2. Quality of accounting data provided and
  3. Qualification of accounting personnel staff

The study will also endeavour to final out how proper the accounting system of the establishment is an the extent to which the management rely on the accounting reports for their decision making.

1.3 Objectives Of The Study

The objectives of this study are as follow

  1. To identify the importance of accounting in an establishment and how its information can help the management in decision making
  2. To examine how accounting information has helped management of WAEC Enugu Zonal office in its decision making
  3. To educate the general public on the need for management to use accounting as a tools to aid them when making decision
  4. To examine accounting in its entirely and the relationship of accounting with decision making

1.4 Scope Of The Study

The scope of this study will cover only the WACE (West African Examination Council) Enugu zonal office not minding the fact that WAEC in its entirely covers the whole of west African region

1.5 Research Questions

The question stated below will be attempted or answered in the course of this research work.

  1. What is accounting and how can it be used as a management tools for decision making
  2. How can management make use of accounting information in decision making
  3. What are the benefits of accounting and why do WAEC have to keep proper accounting records
  4. Can management make an effective decision without accounting

1.6 Significance Of The Study

The significance of this study is to examine the accounting tools in use and of this study can be used as a basis for directing attention to the possible defects of the present use of the accounting information as a tools for decision making in the WAEC Enugu zonal office not only WAEC Enugu but for the whole nation the will benefit those people in financial institution IMT Enugu are going to benefit from it even those in financial studies and etc

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