THE USE OF FINANCIAL ACCOUNTING AS A TOOLS FOR MANAGEMENT DECISION MAKING (CASE STUDY OF ACCESS BANK OF NIGERIA, PLC, SAGAMU BRANCH)

ABSTRACT

The major purpose of the use of financial accounting information is to minimize risk, failure and uncertainties and also stay ahead of competitors. Notwithstanding the immense benefit of use of accounting information, it is generally acknowledged that most unqualified accountants generate inaccurate information and so result in failure of organizations to achieve desired goal. There are cases of managers refusing the use of accounting information because of their inability to interpret such data, thereby making the organization to remain at “status quo ante”. These problems largely contribute to the failure of the use of accounting information in business with the result that inaccurate decisions are made to the detriment of the organization.  

Managers of certain businesses do not have sound accounting systems to enable them monitor operating expenses and revenues. They do not need the warings communicated by financial accounting information. This ignorance or lack of financial accounting information, may lead to the non-effective and inefficient accomplishment of the firm’s objectives, It is only through accounting information that managers and external users get a picture of the organization as a total entity. Managers who fail to realize this do not appreciate an accountants analysis in respect of financial accounting information generated. This may lead to poor decisions being taken and it may affect the profitability and performance of the organization.

Furthermore, inspite of the fact that convention of objectivity is respected in accounting but to record certain events estimates have to be made which requires personal judgement. It is very difficult to expect accuracy in future estimates and objectivity suffers. For example, in order to determine the amount of depreciation to be charged every year for the use of fixed asset it is required to estimate (a) future life of the asset, and (b) scrap value of the asset. Thus in accounting we do not determine but measure the income. 

Most profit making organizations in Nigeria are however, often encountered with accounting and financial management challenges. Poor record keeping, inefficient use of accounting information to support their financial decision-making and the low quality and reliability of financial data are part of the main problems in financial management concerns of these companies.

(Adeboye 2005) While proper accounting is a useful system for making sound economic decisions, The misuse, untimely, poor record keeping, and inaccuracy of accounting information also causes most firm’s to  implement and make poor financial decisions, these short comings might be the cause of difficulties to succeed and to raise fund or borrow money during the later stage. In the worst case, might face with the failure and perhaps bankruptcy in the end.

As a central objective, this study seeks to evaluate the use of Financial Accounting as tools for management in decisions making in an organization. But more specifically,it will also attempt to find the causes of failure in the attainment of organization objective, resulting from lack of adequate utilization of accounting information. 

This study will be of great importance to the government, corporate individual, financial and non-financial institution since it will help to determine the actual roles played by accounting department of this financial institution, as it will also provide indepth knowledge on the duties and responsibilities of the accountant.

The research was limited to Access Bank Plc operator in Sagamu, Ogun State metropolis due the schedule and vicinity of the researcher.

The researcher adopts field survey research design while carrying out the study. The primary data were collected through the administration of questionnaires, observations, interviews and personal discussions with the personnel concerned.

The secondary data employed was obtained was majorly from internet and from other information in newspapers, journals, magazines, articles.

The researcher recommend that decision-making should be administered in flexible and variable rigid adherences to accounting information, which are clearly appropriated for current conditions. This will course the whole accounting system to gain credibility and effectiveness. Co-ordination from the top management will ensure proper interpretation and implementation of the accounting information in decision-making.

Five Chapters

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