EFFECT OF FINANCIAL ACCOUNTING REPORTING ON MANAGEMENT OF BUSINESS
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
Financial accounting covers those activities related to the preparation of certain reports which are known as financial statement. These statements report the financial status of a firm at a particular time the firm activities and resulting profit or losses during the most recent period and the flow of resources occurring within the firm during the same period.
According to Montgomery A.T (1978) gives us an idea on the meaning of financial accounting as a specialized branch of accounting that keeps track of a company’s financial transactions.
However the questions arises what are the efforts of these financial account reports in the management of business?
The answer poses a problem which the paper will seek to solve. Not all business persons understand the impact of financial accounting information on the management of their business, some managers business intuitively. Other, like traffic defaulters who disobey road signs, disobey the warning of communicated by financial accounting information and end up in a ‘Business Accident’There other sources of information which have impact on the business management and the combination of these sources give an information system in the complex nature
According to Bieman H. Jr and Diebin (1972) defined accounting as the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business.
Moreover, financial accounting information usually comes in the disguised form by ‘’wearing’’ the cloak of technicalities. Such technicalities include calculations which need expert knowledge in its interpretation. But when some business because of layout, cannot employ such experts hands, they tend to ignore financial accounting information system which has an effect on the management of any business concern. The problem is: do all businessmen know this? This is the question that the researcher seeks to answer also.
1.2 Statement of the Problem
Is very important for the functioning of any business. The financial accounting system in most business organization system. The flow of information, the cost of collecting any information and the internal control procedures has some loops hole.
In reality, it would be impossible for the researcher to study all the information system in all or even one of the organizations. The study therefore involves the study of some typical financial accounting reporting on the management of a business. The researcher will carry out an empirical study and appraisal of a business financial accounting and see whether there is a room for improvement to be made. It will therefore involve a review of the financial accounting and its related procedures.
1.3 Objectives of the Study
The good of every business is profit optimization. The management of most business exist primarily for this objective, whether the business ownership is profit optimization or maximization as some books may choose to call it, are the still same. Profit optimization used rather than maximization. In this paper because optimization has social effect.
The management is able to do this as long as they are able. It use their financial profitably they must know the effect which financial accounting information has on the management of the business. Financial accounting measures by means of the reports they prepare the extent to which management has succeeded in their goals of profit optimization.
The report which serves as financial information of the accounting period has an impact on the achievement of the business. This effect now becomes the goal this research. The researcher seeks to know more about this effect (i.e the financial accounting effect on the management of business) and also vices all business persons on the effect.
1.4 Research Question
In order to make this research to be more meaningful, there is a need to implore in some questions which responses are received from respondents are stated below.
- To determine if the business have ever taken loans from banks.
- How are the effects of financial accounting information determine the type of business the customer/staff engage in.
- How the effect of financial accounting determine how big the capital of a business is.
- Determining how many employees the business have in the study area.
- Determining how many businesses does publish their account.
What are the constraints to effect of financial accounting information in emetine?
What are the solutions to the identified problem?
1.5 Statement of Hypothesis
Hypothesis is defined by the enclydopedia American as ‘’a proposition assumed to be true merely for purpose of argument or a proposition/theory put forward to account for under a body of facts.’’
The hypotheses of this research work are: this will be used.
- Financial accounting information has both positive and negative impact on the management of a business and as such there is a common need for accounting to supply to its owners information about the business.
HYPOTHESIS 1
THE NULL HYPOTHESIS HO: Financial accounting information has negative impact on the management of a business.
THE ALTERNATIVE HYPOTHESIS HI: Financial accounting information has a positive impact on the management of a business.
HYPOOTHESIS 2
THE NULL HYPOTHESIS HO: Neglect of financial information will not have any effect on the business.
THE ALTERNATIVE HYPOTHESIS HI: Neglect of financial accounting information will have effect on the business.
1.6 Significance of the Study
The research will be significant or useful in
- Examining the effect of financial accounting as information system.
- Directing the business person to such effect.
- Warning, not only business persons but all persons from neglect of financial accounting.
- Encouraging all to obey head the warning of financial accounting information.
The following classes of people will find the work as useful references.
- Managers companies, corporations and any other firm business whether such business are owned by management or not.
- Actual and potential leaders of money to business
- Customers
- Owners and shareholders
- Government
- Other researchers.
EFFECT OF FINANCIAL ACCOUNTING REPORTING ON MANAGEMENT OF BUSINESS
