Role Of Accounting Information In Business Decision Making

INTRODUCTION
1.1 BACKGROUND OF STUDY
According to Osisioma B.C (1990) the definition of accounting as the language of business communication is further useful in the quest for its evolution. For it implies that accounting must be, at least, as old as business exchange. Indeed business exchange would be impossible without a medium of communication. Even before writing was invated there must have been, in the days of trade by barter, a method of determining by the parties involved, that the items to be exchanged were of comparable value. It is not difficult to imagine that any unsatisfied party would trigger a haggling and bargaining process in a bid to extract a fairer deal. The notion of fairness and comparability involved accounting.
The development of money was as a result of the desire to have a more objective method of determining past values for comparison purposes. Therefore, money was invented to serve an accounting purpose, as a measure of value and medium of exchange. The trade can now place a money value on his ware in a process that must be accounting. Form the discussion so far, it can be observed that when commerce advanced beyond the level of trade by barter, subjective accounting (determination of value) became inadequate for its needs. Therefore money was invented. This some what gives the lie to the definition of accounting only in monetary terms.
Another stage in the evolutionary process must have been when commerce developed to the level of processing in which material labour and overheads are employed to produce a trade able item. This relatively complex advance implied greater sophistication for accounting, which needs to have some method of costing the inputs and output as well as pricing.
The point being made is that accounting predates writing. At those early stages, and as was adequate at sometime, mental records sufficiently saved the purposes of accounting. At some stage however, after the invention writing, and in responses to the demand of business that was becoming increasingly complex. Written records became necessary.
EARLY ACCOUNTING RECORDS
It is interesting that some of the earliest records known today are accounting records (information). They are of the ancient Middle Eastern civilization of Egypt. Mesopotamian, create and Mycenae. They were mainly records (information) of physical quantities of good, suggesting that accounting pre-dates monetary economy. The system was flexible enough and soon expanded to accommodate money measure as soon as they were adopted. The earliest form of money was not coinage and paper – therefore some difficulties were experienced in maintaining the records.
About 700 B.C. coinage was invented, probably in Lydia. It spread with time to other Mediterranean can culture, making it possible for account records to reflect money values. This is way some researchers have maintained that accounting, in a true sense, originated in classical grace. This reasoning arose because of the modern definition of accounting in terms of money measurement. It is submitted that this is fallacious because money measurement is an artificial characteristic of accounting, which pre-dates money values.
In those early days records including accounting records, were inscribed on stones and marbles. An example is the Parthenon building accounts in Athens which were inscribed on marble table on the Acropolis. Portions of this still exist. With the later invention of the papyrus and scrolls, accounting records became easier and move widespread, particularly in Greek and Roman Egypt.
In 1915, the Zenon Papgui were discovered. They contain information on business, agricultural and construction projects of the thirty years during the third century B.C. They gave evidence of a “surprising” elaborate system which had been in Greece since the fifth century B.C. The accounting system empl0oyed by Zenon had “Provision for responsibility account, written records of all transaction, personnel account for wages paid to employees, inventory records and a record of assets acquisitions and disposal”. Also in evidence was the auditing of all the accounts.
Early Greek and Roman account were kept on the charge and discharge principle (comparable to modern day receipt and payments accounts). The principle there seems to have been centered on the need to keep track of the assets, and exercise control over those entrusted with properly. A steward, agent or public official charged with some trust tendered periodic account by producing two lets. The charge list consists of any goods / monies due to the principal at the beginning of the period, plus, any receipts from him or on his behalf during the period. The discharge list consist of the disbursement of goods / monies, on behalf of the principal within the period, and a balancing figure indicating the balance due to him. The total to the two lists always agreed. It is interesting, and should be noted that the system did not result int eh calculation of a profit figure nor was that the intention. The primary purpose of the method was accounting for stewardship. It should be largely correct then to say that the earliest form of accounting records reveal the preoccupation with internal control.
The charge and discharge book keeping survived up to the 17th century and beyond, many years after the introduction of the principles of double entry. Despite its shortcomings of not allowing for a calculation of profit or a determination of the business status, its long survival must have been because of served the needs of this time well. Business activities then consisted of a series of independent voyages and expeditions – not going concerns. Each completed expedition marked the end of that venture; it was then an easy task to determine the profit of the voyage. Balance sheets were not needed.
Moreover, most business firms then were of the sole-trader type, and with no need to calculate profit on uncompleted expedition, the primary accounting need then was that of maintaining a check on the honesty and accuracy of the clerks – which purpose the charge and discharge method seemed to have fulfilled. Some times the traders did form guilds which were essentially trade protection societies or professional associational meant to regulate the activities of members of he trade. They were also meant to obtain charter from the crown, which would empower the member of he guild to exercise monopoly in their trade. Even the, the trade was not carried on by the guild but the members in their individual capacities. This was another factor, which did not make.

1.2 STATEMENT OF THE PROBLEM
The major argument that financial statements could not be accurate since some of the information are man made as some of them are subjected to lots of estimate and approximations. But if the man made dale should be estimate accurately, the users can at least have the confidence that the estimates are the best that can be made from the available information since the economic entity is a going concern. It is difficult to know all the tact’s of an economic going concern entity.
In another development, unless financial statement, resource allocation decision may be wrongly made.
Secondly, the researcher will highlight the constraints and difficulties encountered in using accounting making
Lastly, the constraints and difficulties encountered will affect the quality of the decision to be made.
However, this research will appraise the characteristics of good financial report precisely as it affects the company used for our study. Attempt should be made investigate the following:
a. To identify the good reporting system
b. To examine the constraints militating against the quality of good report
c. To determine if the reporting system is efficient and adequate
d. To determine the effect of having qualified accounting staff, that is the quality of human, resources involve in the production of the report.
e. To determine, to there is fully disclosure
f. To determine weather the information is relevant

1.3 OBJECTIVES OF THE STUDY
Since accounting information is so vital that no meaningful decision can be taken with it if. The research however tends to achieve the following as enumerated bellow.
a. An indepth evaluation of the accounting polices adopted.
b. Highlight and recommend solutions to the problems that militated the effectiveness of good accounting information.
c. Ensures that qualified accounting staff process accounting information for business decision making

1.4 SCOPE AND DELIMITATION OF STUDY
The researcher in the course of the study encounters a lot of difficulties in obtaining information for this study the researcher on severed occasions were denied access into Hapel Nigeria Ltd and attributed their reasons on time constraints and in disposability of these the research intended to meet in addition to the above certain information were not easily made available to the researcher as clearance must be obtained from the directors before such information were given.
Other problems encountered by the researcher were due to time as well as constraints which hindered the timely completion of this research work

1.5 RESEARCH QUESTION
1. To what extent does lack of strick compliance to accounting polices effect the business decision making in Hapel?
2. To what extent does lack of qualified accounts personnel affected the service of Hapel
3. To what extent does lack of qualify accounting information affects the effectiveness of business decision making in Hapel?
4. To what extent does relevance timeliness and consistency end business decision making?
5. To what extent does inefficient and inadequate reporting system affect sound decision making
6. To what extent does lack of full disclosure affect the business decision making.

1.6 SIGNIFICANT OF STUDY
The study will help to appraise and review non compliance to basic accounting policies and as well as recommend efficient and effective accounting policies that will ensure accurate efficientered, reliable information that will aid business decision making.
The study can equally be used to various users who may consult or make reference to this work from time to time. Moreso, the work will be of immense assistance to those who have the ambition to assure the position of business decision making law markers and finally, to all accounting students in all higher institutions of learning.

1.7 DEFINITION OF TERMS
1. Accounting information is the information provided by account for business decision-making. It consist of report and financial statement
2. Historical cost: This means that transaction should be accounted for in tem of their original cost established by exchange.
3. Disclosure: It states that the presented financial statement should include all material data that can informed reader should known to be able to arrive at conclusion. This means that financial statement should be allemande by adequate notes to explain the contents
4. Objective: his principle connotes independent judgment by accountants who prepare the financial statement and freedom from bias in presenting the financial statement.
5. Corperate report: This may be defined as a set of report prepared by a company in line with regulating statues and for the information of all groups that have one interest or another in the company. It is an aggregate financial report for a whole entity or division of an entity for he benefit of external users.
6. Consistency: This is the concept assumes that the reporting of the economic performance of an organization should be consistent to allow the users financial statement of the enterprise to make useful judgments. The concept of consistency does not completely molubit changes in accounting methods. Change should be made where necessary if this would improve the reporting of financial statement. These type of change must also be disclosed.
7. Accounting policies: This implies confirmation that the financial statement are in accordance with approved statement.