Project Topic:

MANAGEMENT ACCOUNTING AND ITS APPLICATION TO ORGANISATIONAL, PLANNING, CONTROL AND DECISION MAKING (CASE STUDY OF NIGERIA BREWERIES PLC.)

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 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   1,534 people found this useful

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ACCOUNTING UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

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ABSTRACT

The main thrust of this study is to examine the application of management accounting and its application to organisational, planning, control and decision making. Specific objectives are: to ascertain whether management accounting information are provided at the right time for planning and decision making, to identify whether the management accounting information system is computerized, to eliminate the constraint affecting the application of management accounting information on organization decision making.Data for this study was collected from the respondents through the use of questionnaires. Other information was collected from text books, journals and other secondary sources of data. The sample for this study will be Nigerian breweries Plc. The random sample techniques are used to select the respondents of the study area. Thus, one hundred and twenty (120) samples were considered for this study. In testing the hypotheses formulated earlier for this study, the chi – square (X2) was employed.

Findings from the study reviewed that majority of the respondents are of the opinion that management accounting is important for the organizational planning and that management accounting information improves organizational performance.

This research will reveal the most important factors that lead to increasing accountant’s involvement in the managerial process of Nigerian companies.

 

CHAPTER ONE

INTRODUCTION

BACKGROUND TO THE STUDY

In every business organization today, Management Accounting serves as the ‘language’ used by businesses to communicate both financial information and non-financial information to individuals and groups who have an interest in how the business is performing.

From a management accounting point of view the primary purpose of management is to plan, control and make decisions that may be classified as marketing, production, and financial. The tactical decisions which must be preceded by strategic decisions provide the historical data from which the accountant prepares financial statements. The business firm or enterprise is an organizational structure in which the basic activities are departmentalized as line and staff. The organization is run or controlled by individuals collectively called management.

Every organisation has managers, however,  these managers have a responsibility to the organisation’s stakeholders to manage the organisation in the most-effective and most-efficient way, to maximize the organisation’s potential, thus it involves the managers undertaking adequate planning for the short-term and long-term future of the business, ensuring that the business is being properly controlled to ensure plans succeed, and making decisions that will enable the business to survive and grow in the future.

The management faces a broad array of decisions, including production, marketing, financial and other decisions. Having in mind that decision making is a fundamental part of management such decisions about the acquisition of equipment, mix of products, methods of production and pricing of products and services confront managers in all types of organizations.

though, The fundamental objective of planning is to assist management in deciding how to allocate an organisation’s resources, while Control is a key feature of management accounting and follows on from planning, it can be exercised at a strategic and / or an operational level, while decision making process .

Management accounting equips managers with information required to carry out these tasks. Management accounting is an important part of the economic information system, with a key role in decision making, whether we talk about small and medium enterprises or large companies. However, management accounting is superficially treated in most economic entities,

The format and content of management accounts depend upon the specific requirements of management. Different businesses will have different information requirements and their individual management accounts will reflect this. As internal reports, management accounts will often contain business-sensitive information for a restricted audience and can focus on both financial information and non-financial information, such as critical success factors (measures of factors or aspects of an organisation’s performance deemed to be critical, or essential, to its competitive advantage and thereby its success).

Early studies place management accounting in a service function with the scope to provide all levels of management with high-quality scorekeeping, attention-directing and problem-solving information and also to provides management with data in order to establish policies, develop plans and control operations.(Simon et al.1954).

Management accounting In a general sense, managerial accounting is an integral part of management that deals with identifying, presenting and interpreting information used for strategies, decision making, resource optimization, employee information, asset protection planning and control of activities, information of associates or other external information users. ( Briciu, and Căpuşneanu, 2011: 57-68).

Furthermore, there is a separate division within management accounting which captures cost accounting, cost analysis, cost control and cost reduction. Singer (1961) and BrunsandMcKinnon (1993) point out that management accounting captures collecting (financial) information which is useful.

It should be noted that, in addition to principals of financial analysis, the application of management accounting in an organization captures good knowledge of the business the firm operates in, fluent communication skills and knowledge of (change) project management.

Further analysis has clarify that  the emergence of team-oriented management accounting roles (management accountants)nowadays needto have hybrid skills from the traditional roles, this is because management accounting is becoming wider involved in integrated business situations, agendas and decision-making forums.

It is against this issue, ideas, information that this study tends to analyze, explain, and assess the application of management accounting in organizational planning, control and decision making process.

STATEMENT OF PROBLEMS

The business world has changed totally. As a result, the role of management accountant is very different now than it was years ago.

In the past, management accountants operation is strictly staff capacity usually separated from the managers for whom they provided reports and information.

Also from a broad perspective, Financial reporting is one of the significant objectives for an accountant, due to its major effect in highlighting and examining the financial information of a company. The quality of reporting financial information is an international issue and the decision making skills of the accountant plays a major role in reaching the overall company objectives, but most organization today lag behind when reporting financial activity of the company as a result of inadequate application of Management accounting skills and functions, this sometimes diminish the integrity and reputation of the organization.

In any organization where there is an effective and adequate management accounting technique, it provides vital information for internal reporting manager’s use in decision-making and formulation of long term plan.

In corporations that derive much of their profits from the information economy, such as banks, publishing houses, telecommunications companies and defence contractors, IT costs are a significant source of uncontrollable spending, which in size is often the greatest corporate cost after total compensation costs and property related costs. A function of management accounting in such organizations is to work closely with the IT department to provide IT cost transparency. Presumably most of this function are not applied in most organization, thereby leading to inability of the manager to plan, control and make IT cost decisions.

Although many agree about the important role of management accountants in organisations plan, control and decision making, moreso certain studies show a certain lack of involvement by management accountants. Even though quantifiable information is important for planning and decision making, accountants are not engaged in it because of the absence of the appropriate techniques. “They are not perceived as having a positive contribution to decision-making, unless the contribution is to legitimize decisions arrived at through a political process, whereas this poses serious challenges to the organization business activity. 

Finally, the inability of some organization to use management accounting techniques in their decision-making has resulted to non-effective and efficient accomplishment of the firm’s or organizational goal.

Therefore, the aim of this research work is to have a look at or show the information, management can derive from management accounting techniques, then usefulness or lack of it for decision making in business organization.

OBJECTIVES OF THE STUDY

Thought it is undisputed facts that, Management accountants, are responsible for financial information in most companies, have a certain role in the decision making process. That role differs from company to another, depending on the skills and qualities a person has and earned over the years.

The main objective of the study is to examine the application of Management Accounting on organizational planning, control and decision making.

The specific objectives are:

  1. Ascertain whether management accounting information are provided at the right time for planning and decision making.
  2. Identify whether the management accounting information system is computerized.
  3. Eliminate the constraint affecting the application of management accounting information on organization decision making.
  4. Identify the effect of poor Management planning and decision making.
  5.  Determine how effective the management accounting information system is in the company.
  6. Explain the differences between management Accounting and other fields of Accounting.

RESEARCH QUESTION:

For the purpose of the research study, the following research questions were asked:

  1. Are management accounting information provided at the right time for planning and decision making?
  2. Are there any constraint affecting the application of management accounting information on organization decision making?
  3. What are the effect of poor Management planning and decision making?
  4. How effective are the management accounting information system is, in the company?
  5. Is the management accounting information system computerized?
  6. Are there any differences between management Accounting and other fields of Accounting?

SIGNIFICANCE OF STUDY

Management accounting has evolved over time and is influenced by the continually changing environment in which it has developed. This type of accounting is focused on internal use by management rather than external reporting. At this time, management accounting has appeared to have matured and the current principles provide the basis for management accounting of the future. All types of accounting share a common objective: to measure entity capital and its changes through use over time. The principal end products of management accounting are the forecast balance sheet and the forecast profit plan. However, management must also consider historical reporting and must use the same concepts for planning and reporting to provide comparable results

On this note, this research work when completed will be very useful to the followings:

Business/ Organisations: To this group, the research work will provide them with the requisite knowledge of management accounting in making provision and interpretation of information required by management at all levels for formulating organizational policies, planning and good decision making.

The study will also be of importance to government corporation, companies, regulators and policy makers who are involved in regulating the accounting Standards and guidelines, it will also educate the general public and entrepreneurs on application of management accounting practices, types, it application, and benefits, It will also enable a better understanding of common management accounting techniques in relation to other fields of accounting.

This research would contribute to the existing literature by focusing on tax administration in Nigeria with a view to identifying the critical problems that are confronting the tax system so that appropriate measures could be taken to tackle them.

This paper will contribute to the understanding of an accountants’ role in the formulation of company decisions. This research will reveal the most important factors that lead to increasing accountant’s involvement in the managerial process of Nigerian companies.

Finally this study will be of great significance to schools and students, it will serve as a reference point for future researchers who will want to research more on the topic.

STATEMENT OF HYPOTHESIS

Hypothesis is “a speculation of the way the variables of study behaves” it is a guide method to be used in their analysis. The needs for such guides rise to the following hypothesis;

Hypothesis one

Ho: Management Accounting Information are not effectively and efficiently used in planning and decision making.

Hypothesis Two

  1. Ho: Management accounting information are not applied at the right time for planning and decision making in an organisation?

SCOPE OF THE STUDY

From the foregoing discussion, the research focuses on Management Accounting And Its Application To Organisational, Planning, Control And Decision Making Using  Nigeria Breweries Plc As Case Study.

LIMITATION OF THE STUDY

Limitations envisage in this research work are:

  1. Uncooperative attitude of the staff in the organisation: this is a major limitation which increase the time spent in completing the research work.
  2. Monetary constraints:This factors serves as a deficiency for the research work, and as a result of low financial capability, it was not enough to give us desired results.
  3. Protocols of getting the top management of the firm for more information.

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