Thesis Abstract

Financial accounting information plays a critical role in aiding management decision-making within organizations. This research project aims to explore the significance of financial accounting information as a tool for managers to make informed decisions. The study will investigate how financial data such as income statements, balance sheets, and cash flow statements provide valuable insights into the financial health of a company. The research will delve into the various ways in which financial accounting information can assist managers in decision-making processes. By analyzing financial reports, managers can assess the profitability of different projects or initiatives, evaluate the company's liquidity and solvency, and monitor the overall financial performance. This information is crucial for managers to identify strengths and weaknesses within the organization, allocate resources effectively, and set strategic goals for the future. Furthermore, the study will examine the role of financial accounting information in risk management and forecasting. By analyzing historical financial data, managers can identify potential risks and uncertainties that may impact the company's financial stability. This information enables managers to develop risk mitigation strategies and make informed decisions to protect the organization from financial setbacks. Moreover, the research will explore the impact of financial accounting information on investment decisions. Investors rely on financial reports to evaluate the financial health and performance of a company before making investment decisions. By providing accurate and reliable financial information, managers can attract potential investors and secure funding for future projects. The study will also investigate the challenges and limitations of financial accounting information in decision-making. While financial reports provide valuable insights, they may also be subject to manipulation or misinterpretation. Managers need to be aware of potential biases in financial data and exercise caution when making decisions based on this information. In conclusion, financial accounting information serves as a vital tool for managers to make informed decisions that drive organizational success. By understanding the significance of financial data and utilizing it effectively, managers can enhance their decision-making processes, mitigate risks, attract investors, and achieve strategic goals. This research project will contribute to the existing literature on the role of financial accounting information in management decision-making and provide valuable insights for practitioners and researchers in the field.

Thesis Overview

The attainment of this objective necessarily requires both the identification as well as the disclosure of an adequate amount of information considered relevant by the users. Financial accounting information therefore, is the information derived from the financial accounting report. The essence of this information is for management and other users to make decisions. Therefore, the accuracy of decision making depends on the effective and efficient design of management information system. The accounting concerned prepares the financial accounting information in such a way that will enable users to derive maximum information for their use. Decision making itself can be described as the art or science of choosing among possible managerial actions. The art or science of decision making enable management of a business to choose from among a range of already analysed and evaluated alternative. Two classes of decision makers can be identified in respect of the use of financial accounting information. These are the external users and the internal users. Management represents and the internal users include creditors, shareholders, government agencies, trade unions e.t.c. Managers are the major users of financial accounting information need this information to plan. The impact of financial accounting information on the management of any business cannot be overlooked, though the extent of such.

1.2 STATEMENT OF THE PROBLEM

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 organisation.

Some organizations, due to low financial layout or lack of adequate planning or ignorance may not employ expert hands needed and this causes the effect and importance of financial accounting information on decisions taken not to be noticed or gained by the organization. The researchers in this study will seek to show the information management can derive from financial accounting and their usefulness for decision making in business.

1.3 OBJECTIVES OF THE STUDY

The objectives of study are as follows:
1. To ascertain of there is any relationship between effective use of financial accounting information and the decisions made in an organization.
2. To ascertain whether company performance is related to efficient and effective use of financial accounting information.
3. To determine factors that may constrain or promote the effective use of financial accounting information.
4. To make recommendations which may enhance the employment of information provided by accounting system. Impact may not be the same for every business. This study will seek to inquire into how monetary and financial information arranged in a professional accounting manner will influence managerial decision.

1.4 SIGNIFICANCE OF THE STUDY

This work would be of immense benefit to the following groups.

1. Financial analysts.

2. Economic researchers and students.

3. Investors and shareholders.

4. Creditors.

5. Labour unions and the general public. The major contributions of this work are:

i. To the management of companies as a tool for evaluating their performance and knowing whether they really take note of financial accounting information.

ii. To further examination of the use of financial accounting as an information system.

iii. To other researchers or research scholars who may wish to carryout further research on the subject matter or other related topics.

iv. It will provide insight on how business organizations rely on financial accounting information for decision making.

1.5 SCOPE AND LIMITATIONS OF STUDY

This work tends to cover the use of financial accounting information indecision making since it will be voluminous to research into financial accounting information alone. Such decision making shall be to enhance profitability of the firm.