The Effect Of Accounting Information On Corporate Decision Making In Organization

Project and Seminar Material for Accountancy / Accounting

The Effect Of Accounting Information On Corporate Decision Making In Organization


This research work is on the impact of accounting information on decision making process, with a particular reference to the Anammco LTD Enugu. The research was geared towards understanding the operations 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 therefore to expose to various departments the proper way to embark on effective accounting information. Forty questionnaires were distributed of which thirty were completed and return using stratified random sampling. Also related literatures dealings 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 analysis 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.

Chapter One


1.1 Background of the 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 becomes as strong as the Iroko tree. The idea had, was that it would be worst for Nigerians to 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 form the onset prepared his/her firm against this ugly situation by mapping out all kinds of straggles example increase in price of this 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 direstacts, the era of mile thumb is employing it, is a sure way final abysmaky. Organizing human and natural resources intricately are the problems of various organization, effective planning and decision making process. Other factors such as stag flatiron taxation, economic and political empowerment 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. It involved 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 than 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 so that definition of management accounting is the provision of information require by the management for use, identifying, presenting and interpreting of information used for.

  1. Formulating strangely
  2. Planning and controlling activities
  3. Decision taking
  4. Optimizing the use of resources
  5. Disclosure to shareholders and other external to entity
  6. Disclosure to employees
  7. Safe guiding assets

There are various ways one can involves or participate in management to that there is effectiveness.

  1. Formulation of plans to meet objectives (strategic planning)
  2. Formulation of short term operation plans (budgeting profit planning)
  3. Acquisition and use of finance
  4. Reviewing and reporting on systems and operations
  5. Corrective measures to bring plans and results.
  6. 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 where as other aspects are worse hit by deviating depression for our years now, the emphasis is on the restructuring of our economy. The international monetary fund (IMF) emerged with a difficult inter restructure measures (without regards to our socio-economic background) which were applied 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 submerge. In recent time, the use of judos 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 used 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 ware 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 Objective of the Study

The objectives of the study are;

  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.

1.4 Research Hypotheses

Hypothesis 1
  • H0: Proper use of accounting information does not help organizations in making efficient and effective decisions.
  • H1: Proper use of accounting information helps organizations in making efficient and effective decisions.
Hypothesis 11
  • H0: There is no relationship between accounting information and production decision of the organization
  • H1: There is relationship between accounting information and production decision of the organization

1.5 Significance of the Study

The call for high interest rates would lead to massive depreciation of the local currency (Naira) low/non utilization of installed capacity of manufacturing plants lack of invisible funds occasioned by low capital formation, political inability devastating inflation, incredible deflation high cost of living, unemployment rate and appropriate taxation policy are factors that impinge adversely the operations of manufacturing organization on entire economy. This research study will help to maximize the beneficial impact of accounting information in the decision making process of organizational books, the profitability of the organization as well as ensuring its continuity as a business entity. It will help in the efficient allocation of scare productivity thereby uplifting the standard of living. In fact all investors group like shareholder, employers, investors, creditors, government etc. would benefit immensely.

1.5 Scope and Limitation of the Study

The scope of the study covers the effect of accounting information on corporate decision making in organization.

The study is limited to Anammco Enugu). The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.7 Definition of Terms


This word is used to remind us that accounting information on decision making process can also be the foundation of every business, firms establishment, that is to say that this word is used a life wire of every business organization under the earth surface.


This word means that if every business lack accounting information on decision making process it means the organization would always face distress and lack of financial to build up its foundation.


A business that do not have a good accounting information on decision making process looks complicating and for that firm to grow is under probability.


It is good for every business to have adequate accounting information on decision making tangled to their normal day to day activities of the establishment.


For a business to have excellent accounting information records the chief accountants must show too much concern about the information given.


This occurred if a business fails to use accounting information in running it. It would cause a great destruction to the establishment thereby making the firm slow in getting profits.


This is putting the company in a specified direction by making a very good use of accounting information on decision making process.


If the company has bad accounting clerk or accountant who does not keep adequate information it pay the compound very bad.


If the company have too many accountant who record of entries that is having many varsities of knowledge knowing that too many cooks spoiled food.


This accounting information process gives new way to a life of every establishment which is when practiced will get more profits.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the effect of accounting information on corporate decision making in organization

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of accounting information on corporate decision making in organization

5.2 Summary

Chapter one identifies the concepts and problems arising from accounting information in an organization for decision making. The chapter gave a general background to the study in relation to accounting information. The chapter also states the problems, significance and objective of the study. Also formulated was the hypothesis and research question of the study which was tested in chapter four. Chapter two create literature review for the study.

The chapter discussed users of accounting information. A section in the chapter also gave a techniques used for decision making process and selecting the approximate decision. In chapter three, the various procedures employed to obtain both the primary and secondary data were outlined. These include the design of the research work, the population of the study, sampling method used in gathering data and the tool to test the classified data the classification, presentation, evaluation and analysis of data was done in chapter four. The chapter also analysed the data obtained through the questionnaire and utilisation of interview tips on the hypothesis. The test tool was applied on the key questions. Chapter five which is the last chapter summarized, drew conclusions and made recommendations on the study. Generally, it was concluded that in all aspect of an organization, accounting information contributes significantly to achieving set goals of both internal and external users of financial advisory services

5.3 Conclusion

The study has proved the essence of accounting information in an organization (economic enterprise). It has shown clearly the usefulness of accounting information as a tool for effective management decision making. Accounting information also gave priority to capital project that will improve the standard of the economy. From the responses to the questionnaires, it was evident that management of organizations use accounting information for decision making. Finally, it was discovered that inadequate accounting facilities greatly militate against management decision making

5.4 Recommendation

  1. The ledger accounts should be reviewed from time to time to ensure that staff debtors with outstanding advances are not granted new ones for easy determination of outstanding balances at any point in time.
  2. The management should be able to compare alternative actions and events from the accounting information or report supplied them.
  3. Responsible officers should be both at supervisory and management level to maintain adequate implementation, proper segregation of duties and follow up procedures to ensure adherence to management policies.

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