MANAGEMENT ACCOUNTING AS A TOOL IN DECISION MAKING

ABSTRACT

This work provides the effectiveness of management decision in an organization. This study however will dwell in management accounting as to highlight it’s roles in the decision making process of a public organization like WAEC Enugu. In the light of the management accounting, can be defined as an integral part of management concerned with identifying, presenting and interpretation of information required by management for the purpose of planning the activities performance appraisal at strategic departments and operational levels. The research work was divided into five parts or chapters and they are arranged as follows. Chapter one presented the background of the study and the general introduction of the topic. Chapter two death with the review of the related literature concerning the topic, nature and purpose of management accounting concept of information, functions of management, qualities of management decision making process. Chapter three death with research design, area of study, population for the study, sample and sampling techniques instrument for data collection, validity of instrument reliability of the instrument, method of data collection and method of data analysis. Chapter four death with data presentation and analysis. Chapter five easily death on the discussion of results, conclusion, implications of results, recommendations suggestions for further research study and limitation of the study.

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Accounting widely seen as the background of every business has been defined in several languages by many scholars, but interestingly all the language see it as generating economic information that permits informed judgment and decision by users of such information. This Mustafa (1994:5) “ Accounting as the identification selection, measurement and communication of information in the form of costs and benefits both of direct and indirect nature to facilitate economically justified decision regarding the activities and resources of an organization. It should therefore be noted that the users of accounting information of any organization include the management of the organization. The creditors of the organization, shareholders or owners investors at large etc. These groups have their different informational needs about an organization as a result of which we classify accounting into:

1.   Financial accounting provides information for the extend users such as shareholders creditor, government agencies potential investor etc.

2.   Cost and management accounting provide information for the internal users i.e. those in the various level of management.

This study however, will dwell in management accounting as to highlight its roles in decision-making process of an organization in the light of the above management accounting, can be defined as an integral part of management concerned in identifying, presenting and interpreting information required by management for the following purpose:

i.    Formulating the policies of the organization stations planning the activities of the organization

ii.    Decision makings

iii.   Performance of appraisal at strategic department and operational levels etc.

Based on the above management accounting is seen as the pillar (in terms of information provision) in the decision- making process of a business organization. This is based on the fact that before the manager or head of an organization can make effective decisions, he must have a good knowledge of the circumstance surrounding the environment on which he intend making a decision and this in the focus of management accounting.

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