Some organizations have failed woefully due to neglect in the use of accounting information in its decision making process. Managers, therefore should rely more on accounting information in its decision making process since decision making skill is “the key “ to successful planning in an organization.
The statement of accounting standard No. 2 issued by the Nigerian accounting standard Board defines Accounting Information as “the data that are found in financial statement which provides a continuing history qualified in monetary terms of economic resources and obligations of a business enterprises and of economic activities that change these resources and obligations”.
Accounting Information therefore, provides the yardstick for measuring the performance of a business organization and is also an instrument against which management compare actual result with established standards. Thus, this information communicated by accounting records serves as a basis for corrective actions when actual outcomes deviate from pre-determined goals.
Accounting Information is not only needed by managers, other users of accounting information include: shareholders (owners), editors, potential investors, the government and the public who have supplied money to the business or who have other interest in the business that will be served by information about financial position and operating results.
The type of accounting information that a specific type of user will require depends upon the kinds of decision that a person wants to make. For example, managers need detailed information about daily operating cost for the purpose of controlling the business and setting reasonable selling price. Other users on the other hand, usually need summarized information on operating result for the past years to use in making investment decisions, levying income tax, or making regulatory decisions.
Accounting information is conveyed to users in a variety of reports and schedules. Reports to internal user (management) are specifically designed to meet their particular needs, which are usually known at the time the reports are prepared. Reports to external user are more standardized and are often referred to as “financial statement”. According to the statement of accounting standard No. 2, the information to be provided in financial statement are those that are quantitative and qualitative in nature to aid their users in making informed economic decisions. Financial statements are therefore to be simple, clear and easy to understand by all users.
TABLE OF CONTENTS
TABLE OF CONTENTS
1.3STATEMENT OF PROBLEMS
1.4PURPOSE OF STUDY
1.5SCOPE OF STUDY
1.6SIGNIFICANCE OF STUDY
1.7LIMITTION OF THE STUDY
2.2DEFINITION OF ACCOUNTING
2.3SCOPE OF ACCOUNTING
2.4OBJECTIVES OF ACCOUNTING
2.5SOURCES OF ACCOUNTING INFORMATION
2.6ACCOUNTING FOR DECISION MAKING
2.8FEATURES OF ACCOUNTING INFORMATION
2.9FINANCIAL STATEMENT AND THEIR INFORMATION, CONTENTS FOR MANAGEMENT DECISION MAKING.
2.10ACCOUNTING CONCEPTS AND CONVENTIONS
THE ROLE OF ACCOUNTING INFORMATION IN MANAGEMENT DECISION MAKING
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