1.1 BACKGROUND OF THE STUDY
The purpose of this study is to explore Cost and Management Accounting Practices utilized by Organizations. The findings are expected to contribute to the existing literature about the subject, especially in developing markets.
At the heart of nations’ economic success or failure is the performance of individual businesses, which itself reflects the quality of decisions made by businessmen. To make decisions, businessmen require information, including accounting information. Despite the lack of detailed research into the accounting records of businesses, and how they were used to influence decision making, there has nevertheless grown up a conventional wisdom directed at the inadequacy of costing data for decision making, the non-adoption of best practice by businessmen, and the failure of accountants to provide the lead in the construction of costing systems.(Pollard 2001).
Recent archival-based research however has begun to loosen importance elements of this conventional wisdom, and the purpose of this project is to summarize its findings and to examine its implications for a broad-based assessment of the development of Cost and Management Accounting Practice in an Organization.
1.2 STATEMENT OF PROBLEM
One of the most critical problems as regards to this study is that: is the available Accounting Information resulting from Cost and Management Accounting Practice so reliable in such a way that it will aid and facilitate decision making?
Another problem is that, there has been lack of detailed research into the accounting record of businesses and how they are used to control decision making, due to this, Accounting Information has lost their relevance on investor’s decisions and business Management decision making. Another reason for this is not far fetch; it is because of a past record of ineffectiveness of Accounting Information in Organization. There is inability of managers to embrace the new technology in Management Accounting Practice.
There is also the problem on the ground that some accountants as well as business firm still have not been able to adopt the best practice of Cost and Management accounting which could bring about enhancement in decision making.
1.3 OBJECTIVE OF THE STUDY
The objective of this study is basically as follow:
1. To examine the relevance, nature, scope of Cost and Management Accounting Practice in an Organization. For a proper understanding and reasonable findings, the researcher made use of John Holt Nig. Ltd Benin City as a case study.
2. To assess the relevance and functions of Cost and Management Accounting Practice in Organizations and how it has helped in Organizational decision making.
3. To examine the new area in Management Accounting and how it affect decision making.
1.4 RESEARCH HYPOTHESIS
Based on the foregoing, the following research hypotheses formulated will be empirically tested and result gotten will serve as a spring board for recommendations. The following are the hypothesis for the study:
Ho: Cost and Management Accounting Practice does not bring about reliable accounting information
Hi: Cost and Management Accounting Practice brings about reliable accounting information
Ho: lack of detailed research into the accounting records of businesses does not affect decision making negatively
Hi: lack of detailed research into the accounting records of businesses affects decision making negatively.
1.5 SIGNIFICANCE OF THE STUDY
The researcher now discovered that it will be reasonable to encourage Organizations in Nigeria to introduce and adopt a proper and vital Cost and Management Accounting Practice into their accounting system so that the general public can have confidence in their accounting information, which will also help them in decision making.
This research work will be significantly useful to students of accounting and Management department as it will give a detailed explanation of the nature, scope and relevance of Cost and Management Accounting Practices in an Organization.
1.6 LIMITATION OF THE STUDY
During the conduct of this research work, some factors posed as constraints to the determined efforts of the research to carryout the research study to such a depth and in such a manner that it ought to have been carried out judging from its relevance to Management, such factors include:
a. Management Restriction: Management more often than now allow access to information that are considered very confidential in nature like detail information of Organization of the Organizational corporate profile. As a result of the restrictions the researcher was able to work with only the information that was accessible.
b. Time Constraint: Time is also another factor tat acts as hindrances in carrying out this research study. This is as a result of the fact that other things were still being attended to in the course of carrying out this research work.
c. Financial Constraint: money also acts as a problem in the conduct of the research work. Traveling expenses were incurred in getting the materials for the research work. Also incurred, were expenses for the typing and distribution, building and a lot of other expenses.
1.7 SCOPE OF THE STUDY
This project basically covers such area as cost accounting, Management accounting, Cost and Management accounting and their practices in an Organization, as well its relevance and usefulness in decision making. The area covered in the research work is limited to John Holt Nig. Ltd, Benin City which is used as a case study.
1.8 DEFINITION OF TERMS
Cost: Okoye, (2002) defined cost as the value of economic resources used in the production of goods and services. The art/science of determining the “economic resources used in the production process is called cost or cost accounting.
Cost accounting – in the view of (Bjarneau 2007) cost accounting is a method of accounting in which all costs incurred in carrying out an activity or accomplishing a purpose are collected, classified, and recorded.
Management accounting – According to (Abdel Kader, et al (2008), Management Accounting is the process of preparing Management reports and accounts that provide financial information required by managers to make day-to-day and short-term decisions.
Accounting Information System - An accounting information system (AIS) is a system of collection, storage and processing of financial and accounting data that is used by decision makers.
Ethics – According to (Advance Learners Dictionary 6th Edition), Ethnic are rules, principles or order governing a profession.
Leader – (Advance Learners Dictionary 6th Edition), defined Leader as a person in authority (Head of a Country or Organization).
Management – According to (Peter Drucker 2004), Management is the art of running and controlling a business or similar Organization. (Fubara 1986) views Management as an activity carried on in an environment that comprise of resources in capital and human, having alternative uses.
Dishonesty – (Advance Learners Dictionary 6th Edition), the lack of trust and intending to deceive people.
Measure – (Advance Learners Dictionary 6th Edition), Measure are steps, methods etc. to control situation.
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