ACCOUNTING INFORMATION AND MANAGEMENT DECISION MAKING IN NIGERIAN BREWERIES PLC 9TH MILE CONER NGWO
1.1 BACKGROUND OF THE STUDY
According to Reece, (1975), the accounting profession essentially
involves the supply of information to decision makers. Hence, it is not surprise that accountants
have always been involved in many information related problems. The need for this involvement is underscored
by the avowed aim of accounting which according to the American association
committee to prepare A statement of basic accounting theory (SOBAT, 1961).
SOBAT, (19610, described Accounting as the provision of
relevant economic information to permit informed judgment and decision by users
of the information.
The attainment of this objective, necessarily, requires
both the identification as well as the disclosure of adequate amount of
information considered relevant by the users.
Financial accounting covers those activities related to the
preparation of certain reports which are known as financial statements. These statements report the financial status
of the firm at a particular time the firms activities and resulting profits and
losses during the most recent period, and the flow of resources occurring
within the firm during the same period.
Information, according to Reece, (1975) is a fact, datum,
observation, perception or any other thing that adds to knowledge.
According to Joan, (1978), information is the information
is the life wire of any organization. He
further said that the success of any organization whether profit or non-profit
oriented depends particularly on how the information needs of the different
levels of management are met.
Information can either be quantitative or non quantitative
and out of many quantitative information, accounting is one. It is distinguished from other types of
information because it is usually expressed in monetary terms, though
non-monetary information are also often contained in accounting reports in
order to enhance the understanding of the manager.
Joan, (1978) affirmed that accounting information serves
various uses; these users have different decisions to make and consequently,
their information often differ.
In order that accounting information may be most useful, it
is adapted to the particular needs of users.
-Shareholders and investors
whose main concern is with the value of the capital investment and expected
-Management whose planning,
controlling and decision making functions would be highly ineffective without
quality information. Financial reports
are also an indication of management efficiency.
-Creditors and potential
creditors such as bankers bondholders, suppliers of goods and services they
deduce from accounting information, the profitability and financial soundness
of the business to enable them decide whether to expand or decrease financial
commitment in the business.
-Government, in order to
calculate the company’s tax liabilities, regulates rules and evolve policies
through the use of accounting information.
Employees who seek assurance
of steady employer to ensure how frequently they would participate in company’s
bonus, profit sharing and pension plans.
May, 1980, described that
decision making is the process of choosing from among alternative courses of
actions, conclusion and so forth, according to some criterion or criteria
adopted by decision-making is the prime job of managers. And for as long as men have been striving
together to accomplish tasks of making decisions about scare resources in
uncertain situations, management has been practiced, and information has been necked.
Making sound decisions is clearly an extremely important
management function since they provide a basis for policy formulation and
effect both the short and long term effectiveness of an organization.
Typically, a wide range of possible solutions and decisions
can be found, and one of the managers key roles is to weight up these
alternative opportunities and select.
This is as result of the fact that he often has to make decision within
the frame-work of his resources, directives from his superiors and the time
scale available. Therefore, to make
sound decision depends, in the first place, on the manager having a clear
picture of what he is trying to achieve or what the problem entails.
To emphasize the importance of accounting information to
the business management has only been made possible by accounting
information. Inevitably, business is
financially oriented; it a process of using money to make money. No management can escape having to pay out
money for materials and services so as to be able to collect money in due
course from the sale of its own products or services. No management can avoid the necessity if it
is to stay in business, for making a profit through an excess money income over
money outgo. And no management can
succeed in doing this without accounting information for use in planning and
Historically, Nigerian Breweries Plc which was established
in 1946 at Lagos. It started production in 1949 producing star
beer. As at then it was wholly owed by Holland. It was in 1973 that the indigenization decree
made it possible for Nigeria
to own 60% in the brewery. They are Lagos plant Head quarter,
Ibadan, Kaduna, Aba and Nineth mile plant.
1.2 STATEMENT OF PROBLEMS
information is a necessity in today’s business if they are to survive and
grow. Despite the importance of
accounting information, some of the major problems of this study include the
How accounting information is
applied in policy making of Nigerian Breweries, Ninth mile.
How accounting information affect
the level of performance in Nigerian Breweries.
How accounting information determine
resources allocation in Nigerian Breweries.
What factors affect accounting
information in Nigerian Breweries.
1.3 PURPOSE OF THE STUDY
of this study include the following
to find out how management of Nigerian
Breweries apply accounting information in policy making.
to ascertain how accounting
information in Nigerian Breweries affect the level of performance.
to find out how accounting
information help in allocation of resources.
to find out what factors affect
accounting information in Nigerian Breweries.
THE SCOPE OF THE STUDY
research is limited to Nigerian Breweries, Nineth mile corner, Ngwo.
main focus of study borders on policy-making, level of performance, resources
allocations and factors affecting accounting information.
To guide the study, the following
research questions were formulated as follows:-
To what extent does management of
Nigerian Breweries apply accounting information in policy making?
to what extent has accounting
information in Nigerian Breweries affect level of performance.
To what extent has accounting
information determine resources allocation?
What are factors that affect
effective accounting information in Nigeria Breweries?.
Four hypothesis have been formulated to further test the result of
research questions follows:-
HO, There is no significant
difference (PL:05) between the mean perception score of senior or junior staff
of Nigerian Breweries on the extent of accounting information is applied in
HO2, There is no significant
difference (Pl.05) between the mean perceptions. Scores of senior and junior staff of Nigerian
Breweries on the accounting information affect level of performance.
Ho3 There is no significant difference (pL.05) between senior and
junior staff of Nigerian Breweries mean perception scores on how accounting
information affect resources allocation.
Ho4 There is no significant difference (PL.05) between junior and
senior staff mean perception scores of Nigerian Breweries on factors affecting
SIGNIFICANCE OF THE STUDY
This research will be useful:
In further examination of the use
of financial accounting as an information system.
To the management of companies as a
tool for evaluating their performance and knowing whether they really take note
of financial accounting information.
To management of the company under
study as a standard for internal evaluation and control of actual performance.
To other researchers or research
scholars who may wish to carry out further research on the subject matter and
other related topic.
The most important contribution of
this work is that it will provide insight on how business organization relies
on financial accounting information for decision making.