Virtually every organization requires information for effective management and planning. Information particularly accounting is indispensable to the growth and development of organization, because from planning to the execution, resources required are guided by availability of accounting information, as it provides detail information of budget on the implementation of plan.
Accounting information according to Batty (1974) is the systematic presentation, analysis and evaluation of data regarding the financial position, or statement of account of an organization for future planning. It involves a stream-lined financial data which must include assessment of stock-keeping, financial statement, transaction over period of time, financial report, evaluation of organization financial strength, prospect and recommendation. However, the fact that resources are relatively scarce and limited made managers to programme course of actions and choose options that are cost effective and yet yield the require result. Therefore, taking the above variables in consideration, accounting information aids in effective management and provides background for sound decision-making processes.
The variability of the information from accountant to goal oriented management team of any organization made Akpan (2004) to categorically states that every decision-making process involving systematic planning, organization of facts, adoption of programmes course of actions among the alternatives must as a matter of necessity take into consideration detail information (accounting) at the disposal. With regards to this, Udoidung (2001) notes that in modern managerial practice, sound management decision making requires every bit of accounting information in order to achieve efficiency and effectiveness in the attainment of goals. Basically from this notion, the global best practice in management made accounting information indispensable as this is vital to the appreciation of financial position of business which guided the management decisions regarding debt management, planned expansion of organization, recruitment, acquisition policy, dividend to share holders, and credit worthiness.
The important of the above, lend credence to the fact that, oftentimes, reputation and potentialities of a business or organization are the basis of accessing loan facility. That was why Adame (2006) noted that banks and other financial institutions that are concerned with lending, and risk management required the profit trend, the fixed assets and the liabilities of business before loan is granted, and all these can be studied from the available final account records and decision to make informed choice by management anchored on the accounting information.
Moreover, predicated on the gains of accounting information, organization industrial relations are managed and harmonized by the well articulated design information reports. The employees and union members appreciate more when they are made to know the true position regarding assets and liability of the organization. Here the glamour for enhance remuneration, pension right and various fringe benefit are understandably negotiated given the fact that the organization financial position are not hidden. All these and many others are predicated on the realms of efficient accounting information system, and it is on this note that, the study in considering the imperatives of accounting information to sound decision-making non management in reposition the organization for greater productivity that this research takes a holistic approach to study management practice in Anchor Insurance Company Limited with special regards to accounting information in decision making process.
1.2 STATEMENT OF THE PROBLEM
Basically, accountants, are constrained with the challenges of accessing accurate data for correct and reliable computation, analysis, evaluation and presentation of information needed for sound decision-making by management. This is because, information from budget and audit unit of the organization due to corruption and red tape are difficult to access particularly when it is not authoritatively ordered. Therefore, as a result of this, the realm of compromise and corruption in the accounting system of the complex organization seldomly allowed for objective and result oriented outcome of the information.
However, to lighten the challenges to effective utilization of information, management is confronted with the problems of how accounting information can be used to address topical issues such as staff motivation, productivity, fraud checking and shaddy compromise in the course of transaction, elimination of waste and mismanagement of fund by instituting internal control mechanism. How to adopt the best possible course of actions that are cost effective in the realization of goals even in the challenge of expansion. These required accurate and updated accounting information for management to tackle the challenges.
Thus, in finding solutions to the highlighted problems, the study examines the necessity of using accounting information for effective decision-making in surmounting the highlighted problems in an organization like Anchor Insurance Company Limited.