An organization needs qualitative information to function or make decision; the available of such information make the organization to function in the most effective and efficient manner. This information is provided by the accounting system to the management, which uses it primarily to accomplish three (3) broad purposes, viz:
In financial accounting, the responsibilities of the accountant ranges from recording and analysis, summarizing and reporting the result of the activities of the organization to creditors, stock holders and prospective investors, government, labour, environmental organization and others. In the case of reports to external users, they are classified for general purpose; they are financial statement, the income statement, the retained earnings, the balance sheet and the statement of financial position. People who protest or enhance their investment in the organization as by other who have a special interest in it use this statement. In management accounting, accountants provide information for use by office within the organization (the managers) rather than for use by other outside the organistion, such information are mainly decision making concerning the internal function organization. Management accounting also provides information to the decision makes for the following purpose:
Management and financial accounting may be understood by considering the basic goals of financial accounting is to direct forms of operations to maximize income the period measure net income used by the management in making decision to avoid what may be considered as an unwise decision to external user or vice versa. However, the relevance accounting information effective decision making in this research work, the degree of the relationship shall be clearly spelt out and identified.
The choice of the topic “Accounting information as a tool for management decision making” has been motivated by the fact that whatever accounting on information is presented to the has been collected, classified and analysis will determine the extent to which it is to be relied upon by the management in order to formulate a favourable decision in the organization.
The project therefore examines the relevance of accounting information to managerial decision making manufacturing companies with a view to highlighting the area of weakness and making necessary recommendations.
It is infact in the light of the above that attempt be made to apprais the essence of accounting information in making decision concerning he use of limited resources, including the identification of the overall organization objectives.