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THE IMPACT OF ACCOUNTING INFORMATION ON DECISION MAKING PROCESS

ABSTRACT

The use of accounting information in view of the nature of business environment of today is very important. The managers of any organization need information to enable them form the affairs of business   in line with the set objectives and for them to achieve such objectives, accounting information will be needed. The study of this research therefore is to investigate the impact of accounting information on decision making process. Ecobank Nigeria Plc Nnebisi Branch, Asaba Delta State was used as a case study for the purpose of analysis. The study started by examining the nature of accounting information. This was done in chapter one, entitled “information also the statement of problem, objectives and research hypothesis among others are high-lighted. The review of literature forms chapter two. In this chapter, various definition of accounting, characteristics of useful accounting information, accounting discipline, various theoretical and empirical reviews were stated. The chapter three states the method of analyzing data, research design, source of data and sampling, while the data presentation, analysis and interpretation were done in chapter four. Here, actual analysis and interpretation were done in chapter four. Here, actual analysis was carried out, hypothesis were tested and analyzed in a tabular form using coefficient correlation. Findings, recommendations and conclusion was used to form chapter five which will be useful to any person who may have one form of contact with this project work. 


CHAPTER ONE

1.1...

1.2    STATEMENT OF PROBLEM

As Garrison has pointed out in 1982, the three uses of accounting information to management which is to direct their day-to-day operations, arrives at the best solution to the operating problems faced by the organization.

Hypothetically, lots of organization still faces much problems because management has not been able to accord the desired attention to accounting information.

The researcher is interested in investigating and finding about how accounting information assist an organization to make decisions and most problems they face which were identified during the course of this research work.

  1. The problem of identifying those positive and significant relationships between accounting information and management decisions.
  2. The problem of generating accounting information which will be useful to improve the bank profitability.
  3. Inadequacy in providing accurate and timely financial information for internal management purposes.

1.3. OBJECTIVE OF THE STUDY

  1. To determine whether there are any positive and significant relationship between accounting information and management decision.
  2. To make sure that the accounting information generated by the account department are useful to improve the bank profitability.
  3. To provide accurate and timely financial information for internal management purposes.

1.4   RESEARH QUESTIONS

They are as follows:

  1. Is there any positive and significant relationship between accounting information and management decision?
  2. How can this information generated by the accountant be useful to improve the company
  3. Are there any accurate and timely financial information for internal management purposes

1.5     RESEARCH HYPOTHESES.

Hypothesis I:

Ho:    There is no positive and significant relationship between accounting information and management decisions.

Hi:    There is positive and significant relationship between accounting information and management decisions.

Hypothesis II:

Ho:    There is effect on the information generated by accountant to improve the bank profitability.

Hi:    There is a positive effect on the information generated by accountant to improve the bank profitability.

Hypothesis III:

Ho:    Accurate and timely financial information are not use for internal  

                  management purposes.

Hi:     Accurate and timely financial information are used for internal   

                  management purposes.

 1.6     SCOPE OF THE STUDY 

Since the financial institution are users of financial information and all financial institution in the country cannot be covered. ECOBANK being one of the biggest commercial bank is selected as case study. Thus analyzing how Ecobank Nigeria uses accounting information for decision making, the financial statement of the bank from 2010-2014 will be used.

Apart from using the financial statement of the bank, questionnaire will be used in generating primary data to complete the data obtained from the financial statement. As a result of that, questionnaire will be distributed to Ecobank branch at Nnebisi Road in Asaba Delta State. 

1.7   SIGNIFICANCE OF THE STUDY

The significance of the study will go a long way to enlighten all persons in managerial groups on the importance of accounting information that is, seeing accounting information as a vital tool that cannot be avoided and a bedrock of management in taking decisions.

This research study will help us to know the beneficiaries of accounting information in decision making which are: creditors, investors, management and shareholders.

  1. Creditor: A company’s financial information enables a creditor determine whether amount owing to them will be paid when due.
  2. b.             Investor: The investors provide risk capital so they need the information to help them determine whether they should buy, hold or sell.
  3. c.             Management:  The financial information helps them to analyze the performance and position of the organization and to take appropriate measure to improve the company’s result.
  4. d.             Tax Authorities: It helps them to determine the credibility of the tax return filed on behalf of the company.

1.8   LIMITATIONS OF THE STUDY

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