ABSTRACT
Accounting
Information is aimed at ensuring a maximum amount of information is available
to the users that will enable them take meaningful decision regarding their
interest in a reporting entity.
The
rational behind the proposal is the fact that the importance, use and the need
for accounting information is boldly written on the entire sectors of the
economy without which it cannot stand. As one of the most important sectors of
the economy Aviating sector has been chosen as a case study of this research work.
I have
decided to take a holistic look into the accounting procedure and processes involved
in generating accounting information in the Nigeria Airspace Management Agency
(NAMA) and the roles these accounting information play in the respective
decision of the Agency.
CHAPTER
ONE
1.0 INTRODUCTION
Accounting
is the presentation of a systematically developed and accurately recorded financial
report
about an entity engaged in economic activity to the users of such reports. The
experts that provide the reports are known as Accountants.
Apart
from the provision of reports, the accountants also
interpret and analyze reports provided in order to assist those who use the
output of the interpretation and analysis for meeting their various needs. When
accountants perform the above stated functions, it IS described
as practicing accountancy profession. Thus, the entire effort of an accountant
is aimed at enhancing decision making m any organization or business
environment.
1.1 BACKGROUND TO THE STUDY
At each
stage of development of man accounting records have been developed according to
the needs at that time. The records are so developed and used in enumeration
and control of assets, as reporting device for stewardship and the
collections, as evidence of trade and for the control of production or the
management of business.
From the
earliest time, the process of levying and collection of taxes by government
called for proper record keeping and report. Such accounting records prepared
by Tax collectors served as a basis to reinforce business need for accounting
systems and controls.
The
development of social life especially the formation of states or sovereignties
and levying of taxes necessitated in addition to the knowledge of number, a
power of holdings, counting's and recording in this we find the
origin of science in accounting.
Early
civilization shows that the Babylonian business men recorded their sales and
money lending some thousand years ago in day tablets. Egyptians used papyr, to
describe the collections before 1000bc.
According
to Richards Brown. (yr) the History of Accounting and Accountant Volume 2, he
stated that Greek and Romans had well developed record keeping
system especially for government purposes. Emperor Augustus was said to have
instituted a governmental budget. Inspectors from the central government in
Rome were sent out to examine the accounts of provisional governors. The
Grecian also have their accounts engraved on stone and exposed in. public specimen, such accounts are among the Elgin marbles in the British
Museum. In Great Britain, the earliest systems of accounting of which there is
record are those of exchequers of England and Scotland.
The
oldest, which has been preserved is the English pipe roll of 1130-1131.
From the
above, there are many existing records of early development of accounting not
mentioned, it is an evidence to show that so many accounting activities have
taken place in the past.
The
modern methodology of keeping accounting record began with the introduction of
double entry in the thirteenth and early fourteenth centuries. This was the
period of rapid expansion of commerce and industry. Among the
records based on the double entry system to the book of a French form, the
Fremes Bonis of Mortauben, which were kept during the years 1345.
This
form the use of books to obtain a review of its position and made up a list of
its debtors and creditors. l.C.B Niclcerson reported in his book Accounting
Hand Book for Non-Accountants, that book has been preserved from 1297 belonging
to Riherio and Baldo Fini in which accounts were opened not only for personal,
but for things and two classes were debited and credited vice versa in regular
fashion. The book keeping records in this period were in the rudimentary stage
without any definite period of balancing.
In some
certain situations, the account are not even kept in the monetary unit for
example, it was reported that in sleveterly loccite page 309 that firemes Banis
opened an account in 19th December 1345 and records were continued
in this account without intermission to the 11th December 1358,
debit and credits were also by no means separated by often place one below the
other as they occur.
Finally,
there were no attempt to balance and in some cases the accounts were not even
kept in the same monetary unit.
The
records that brings out complete double entry system in account is the one discovered
in Genwa in the year 1340 in accounts of the stewards to the Local authority.
The date when this entry actually commenced could not be determined. Another
records in Genoa kept on double entry system is that preserved in Venice. These
records belong to traders, neither bankers and stewards of Local authorities.
The
records of the Merchant of vernice can be described as complete since every
debit has a corresponding credit and profit or loss account is even transferred
to capital account.
This
period was 1416-1440. It was from this venice that the first treatise on the
subject was given to the world in 1494 by "Luca Paciolo" who was one
of the most celebrated mathematician of his days. The purpose of the work was
not in the first place to give instructions in book-keeping, but to summarize
the existing knowledge of mathematics. However, he brought an end to the works
by coding the treatise of bookkeeping.
1.2 STATEMENT OF THE PROBLEMS
A
critical examination of the management process shows that management is into
business for the purpose of maximization of profit.
This can
be achieved when decisions made by managers of the business are channeled
towards the following areas.
a.
Investment decision
b.
Sources of fund decision
c.
Dividend policy decision.
The
future destiny of an organization is planned and controlled by management. When
good decisions are made through the use of accounting information at the end of
this research work, the following problems must be critically analyzed.
·
Can good management contrive realistic ways to
achieve the company's or business objective without accounting as a basis for
management decision making tool?
·
Can management manipulate the controllable variables
and plan for the non-controllable variables without accounting as a basis of
enhancing decision-making?
·
How proactive are the decisions of
management/managers without accounting as a basis for management decision
making tool?
·
Can we measure the performance of managers by
planning and decision making which determines management competence without taking
into consideration the accounting system as a tool to enhance decision making
in any organization.
All
these will serve as our statement of problem in this research work.
1.3 OBJECTIVES OF THE STUDY
Accounting
information is a tool to enhance decision making in all human endeavors. It plays
a key role in management, management function and management processes.
Organizations
cannot achieve their optimum output, wealth creation and wealth maximization
without effective decision making tool.
The
objectives of this research will be as follows:
· Understanding
decision making process as it relates to:
i. Identifying
objections of an organization.
ii. Searching for alternative courses of action.
iii. Gathering data about alternatives.
iv. Selecting
alternative courses of action
v. Implementing the decision
vi. Comparing actual and planned out comes
vii. Responding to divergence
from plan
·
Understanding conceptual view of management role
through the use of accounting tools.
·
Understanding the use of accounting tool performance
evaluation.
·
Understanding the roles of accounting information as
a tool for decision making under condition of risk and uncertainly.
To established the relationship between the accounting
information system in NAMA with decision made base on accounting information
have yield any positive result in time past.