Accounting Information As An Aid To Management Decision Making

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ACCOUNTING INFORMATION AS AN AID TO MANAGEMENT DECISION MAKING
ABSTRACT
This study is the analysis of accounting information as an aid to management decision making. A survey research design was adopted in which fifty workers, of a typical manufacturing company, were used and data were collected using questionnaire. Four research hypotheses were raised and tested; while the demographic information of the respondents were analysed using simple  percentage, the hypotheses were tested using t-test statistic at a significant level of 5%. The testing of the hypotheses revealed that:
 
 Accounting information has effects on management decision;
 
There is a significant relationship between the  perception of employees and accounting information;
 
There is a significant relationship between time  factor and accounting information;
 
 Accounting information has effects on the
company’s performance
 Based on the findings it was recommended that companies  should employ professional accountant in order to provide valuable information and keep accurate record of their accounts
Key words: 
 Accounting, information, management,  performance, financial
Introduction
Accounting is the language of business as it is the basic tool for recording, reporting and evaluating economic events and transactions that affect business enterprises. It  processes all documents of a business financial  performance from payroll, cost, capital expenditure and
other obligations to sale revenue and owners’ equity. It  provides financial information about one’s business to the
internal and external users, such as managers, investors and others. It is sometimes referred to as a means to an end, with the ending being the decision that is helped by the availability of accounting information (Arneld and Hope 1990). Management is the art of working particularly through  people, for the achievement of the broad goals of an organisation (Ejiofor 1987), in trying to achieve these goals the manager has to map out strategies to find out the accounting information suitable for the company. Management accounting uses both financial and non financial information and is generally intended for the use of internal users who use the information to make decisions that help achieve the goals and objectives of the organisation. Financial information used by management accountants include sale growth, profits, return on capital employed and market shares, non financial informations include customer satisfaction level, production quality,  performance of competing products and customer loyalty. Management accountants use both financial and non-financial information to aid business decision-making (Melissa Bushman 2007) Decision making is the process of choosing alternative courses of action using cognitive processes. Making decision is necessary when there is no one clear course of action to follow. Accounting systems can aid our decision making by providing information relevant to the decision and to the decision makiner. Accounting systems also  provide check for the validity through the process of auditing and accountability (Gray et. Al 1996). Effective and efficient accounting information plays a central role in management decision making.
Literature Review
In managing an organisation and implementing an internal control system the role of accounting information is crucial. An important question in the field of accounting and management decision making concerns the fit of accounting information with organisational requirements for information communication and control (Nicolaou 2000). Accounting information system is considered as a subsystem of Management Information System (MIS). To regard accounting as an information system, perhaps, is the latest definition of accounting, as can be deduced from the statement of American Institute of Certified Public
Accountants (1966). “Accounting actually is information
system and to be more precise, accounting is the practice of general theories of information in the field of effective economic activities and consists of a major part of the information which is pre
sented in the quantitative form”
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