An Appraisal Of Accounting Information As A Tool For Decision Making Process In The Manufacturing Sector (A Case Study Of International Tobacco Company Plc, Ilorin, Kwara State)

Project and Seminar Material for Accountancy / Accounting

An Appraisal Of Accounting Information As A Tool For Decision Making Process In The Manufacturing Sector (A Case Study Of International Tobacco Company Plc, Ilorin, Kwara State)

Table of Contents

  • Title Page
  • Certification
  • Dedication
  • Acknowledgements
  • Table of content

Chapter One


  • 1.1 Background of the study
  • 1.2 Statement of the Study
  • 1.3 Purpose of the Study
  • 1.4 Significance of the Study
  • 1.5 Research Methodology
  • 1.6 Research Question
  • 1.7 Scope of the Study
  • 1.8 Organization and Plan of the Study
  • 1.9 Definition of Term

Chapter Two:

Literature Review

  • 2.1 Types of Financial Statement
  • 2.2 Information to be disclosed in Financial Statement
  • 2.3 The roles of Financial Statement in decision making
  • 2.4 Problems of the use of Financial Statement
  • 2.5 Methods of Analyzing Financial Statement
  • 2.6 Interpretation of Financial Statement
  • 2.7 Uses of Financial Statement
  • References

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sampling size and Sampling Method
  • 3.4 Research Instrument
  • 3.5 Source of Data
  • 3.6 Statistical Techniques for Data Analysis
  • 3.7 Historical Background of International Tobacco Company Plc
  • 3.8 Organization Chart

Chapter Four:

Statistical Analysis

  • 4.1 Introduction
  • 4.2 Analysis of responses to Research Questions
  • 4.3 Financial Control System
  • 4.4 Interpretation of the Findings

Chapter Five:

Summary, Recommendation and Conclusion

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Questionnaires
  • Bibliography

Chapter One


1.1 Background of the Study

Appraisal statement has been defined by the statement of accounting standard No: 2 (SAS 2) as the means of communication to invested party’s information on the resources, obligation and performance of the reporting entity or enterprises.

Financial statement therefore are statement of summarizing transaction of a business, prepared and presented basically for a time period for various decision making situation by variety of users.

The purpose of this statement is not to evolve a basic theory of accounting but to identify some of this concept, which are generally accepted. Appraisal statements are therefore expected to be clear and easy to understand by users.

An appraisal statement consist of balance sheet, profit and loss account, note to the accounts source and application of fund statement, value added statement and historical financial summary users of appraisal statement include investors, creditors, employees and revenue regulatory authorities (SAS 1).

1.2 Statement of the Problem

Unfortunately, the management of business organization and some other users of the appraisal statement lack the qualitative understanding of the impact of appraising financial statement and consulting it when decision have been made. This research work will take an in-depth into this.

1.3 Purpose of the Study

The main purpose of this study or research work as to assess the extent of usage of appraisal statement an a basis for managerial decision making in a manufacturing sector.

The main problem encountered by companies in recent time as their inability to plan, organizes and effectively uses of appraisal information and resources to achieve the goals of wealth maximization.

This research work is undertaken to evaluate how appraisal statement can be use as a tool for guiding the process of decision-making in a manufacturing sector

Other Purpose Include the Following

  1. To evaluate qualitative understanding of appraisal statement which serve as a guild line for making vital decision by the management.
  2. To evaluate the extent of management decision depending on the appraisal statement.
  3. To recommend and rectify some weakness in the prevailing attitude toward the use of appraisal statement for decision-making purpose.

1.4 Significant of the Study

Studies in the past revealed that many organizations have neither focused nor made the expected profit because of decision based on inaccuracy, rule of thumb and malfunction for management (Shapiro 1978).

However, accountants are now showing an increasing interest in understanding the relationship between financial statement, which is also the appraisal statement and decision-making in business (Thibhover, 1973). This research will therefore determine the bearing of appraisal in managerial decision-making in a manufacturing sector. The appraisal statement will help the users to take decision as regards investment and this enable business enterprise to expands.

1.5 Research Methodology

The research methodology showed details, the data that were used which are; Primary and Secondary Data and under Primary data we have: Observation, Questionnaire, Interview, Experiment while in Secondary data we have: Journals, Media, Text books, Internet and current annual report.

1.6 Research Question

Research project work is “how effective or useful is the consultation of a appraisal statement when management decision are being made in the management sector”.

From this research work we will be able to deduce the importance of appraisal statement in making decision or if it not necessary to consult it.

1.7 Scope of the Study

The International Tobacco Company Plc, Ilorin is the case study of the project work. The research covers the 2009 annual reports, which consist of the following.

  1. The balance sheet
  2. The Profit and loss account income statement
  3. Sources and application of funds
  4. Note to accounts
  5. Value added statement
  6. 5 years financial summary

Financial statement for 2009 only being the year ended. There is no limitation because all the information needed was gathered through all the assistance of Mr. Ojo (accountant).

The only constraints is that the year 2010 annual result in not yet published which would have been used as a useful statement together with other gathered information

1.8 Organizations and Plan of the Study

The project will contain five (5) chapters.

  • Chapter one include the background of the study which followed by statement of the problems and significant of the study. It will be ended with definition of some term.
  • The second chapter is about the literature review in which the topic of the project will be examined and discuss. Here, view of different author will be extracted from their various literatures.
  • Chapter three talks about the research methodology and type of data collection to be used. The historical of the case study included in this chapter and the organizational chart as well.
  • Furthermore, chapter four reviews the responses to research questions and financial control system including the interpretation of the finding.
  • Lastly, chapter five contain the summary of the above chapter conclusion, necessary recommendation, bibliography and questionnaire.

1.9 Definition of Terms


Therefore an auditor is an individual to whom the receipt and payment of an organization were read. He is also an expert assigned with the power to establish an opinion as the tine and fair view of the financial statement of the company.

Balance Sheet:

This is the summary of all assets and liabilities of a company.


A person whose money is owned.


A person indebted to another the debt usually in money.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Summary

This study considers the use of financial statement as a tool for decision-making in the manufacturing sector with international tobacco company plc (ITC) as the case study.

Literature relevant to the topic were gathered and received together with the data collected and analyzed descriptively.

Research methodology is been considered by the use of research design and discussing the brief history of the Tobacco Company with the organization chart.

The questionnaire is been used in the chapter four of the project so as to know the response of the management.
Summary of the whole project are discussed from chapter one to four.


The following finding were obtained

  1. The decision on how much dividend to declare is usually based on the profit for the particular year ascertained from the financial statement.
  2. The company’s planning and strategy adopted for each current year us based on the profit evaluation of its past financial statement.
  3. Reliance on past financial statement has enabled the company to make short decision, which affect future action.

5.2. Conclusion

The use of financial statement as a tool for decision-making in a manufacturing firm is not employed by so many companies. Its use by the case study reveals soundness of the financial management of the international tobacco company plc.

Furthermore, research is encouraged in thus field on other companies and in the areas of the use of manufacturing companies.

Moreover, one cannot prepare a good financial statement for both internal and external consumption technique of accounting principles and application. It is therefore concluded that only those who are vast in accounting knowledge should be allowed to prepare financial statement.

5.3. Recommendations

Based on the findings from the analysis above, the following recommendations are being made.

  1. Since changes are due to economic environments the company prone to dictate the economy. Hence, the company should plan well in advance to avoid the effect of the unpredictable nature of the economy.
  2. The company is encouraged to base its financial decision on its past financial statement as most of its decision reflects to a certain extent on its use of the finance.

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