The Impact of Accounting Information on Decision Making Process

The Impact of Accounting Information on Decision Making Process.

INTRODUCTION

At independence, Nigeria joined the committee of the nation with the hope for a better tomorrow. We were able to feed ourselves and were of course almost self-sufficient. Subsequently, our hopes seemed unattainable.

We seem to be going deeper and deeper into the woods. The consensus is that it has been bad for Nigeria.

Due to the adverse economic condition prevailing in the country many businesses have closed, shops and even financial institutions are being declared distressed at an alarming rate.

Businesses that are yet to be submerged or that want to stay afloat employ all kinds of strategies. Some increase price, adopt promotional tools, engage in aggressive marketing, etc. whereas others go for an odd combination of activities and even undergo a different kinds of small businesses to survive.

Any business or individual that wants to survive must make the right decision. The era of a mile of thumb is gone; employing it is a sure way to fail absurdly.

The price of any conceivable item from garri and bread to radio and book not to mention petrol has been soaring in 2 geometric proportions over the year.

The economy is truly in distress. These compounds and complicates intricate are the problems of the organization vis-à-vis effective planning and decision-making processes.

Other factors such as stagflation, taxation, the economic and political problem are the major problem which affects information and decision making.

The future orientation is what most companies and banks get from making accounting decisions. the computation and interpretation of analytical ratios from financial statements enable banks to determine their operation trends and provide a basis for management decision-making.

Other users of financial analysis are used in making financial decisions and achieving the goal of sustainability determines compliance with regulatory requirements.

Financial analysis is an investment that has a positive return in the future on how decisions will be made, how to manage the finances to achieve the strategic goals of the institution through decision making.

Many people think that accounting is a highly technical field that can be understood only by professional accountants actually nearly everyone practices accounting in one form or the other. In modern times, management requires a wide variety of information to successfully accomplish its aim and objectives.

This information is mainly determined by the element of uncertainty about the future and lack of knowledge about the present.

Some of these decisions are of strategic importance having a large impact on the business, others are routine operating decisions.

Therefore accounting information is based on laws and regulations governing the handling of accounting reports contained in the financial reports of organizations. Making the right decision depends on the possession of appropriate, accurate, and up-to-date information provided and presented in a meaningful way.

This study set out to examine the contribution of a sound accounting system in providing the management with financial and other information bases for dealing with decision problems that arise from their organizational operations.

Basically, the nature of manufacturing business compels it to carry out a great deal of book-keeping records based on accounting principles and information provided with the perpetual increase in the number of consumers of manufactured products, it has become necessary to devise a systematic means in handling the resultant book-keeping and accounting activities.

A lot of criticism has always been made about the service of the organization, consumers complain of the low-quality products while employers complain of lack of promotion inadequate salaries, lack of training, etc.

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