Accounting Information and Performance of Financial Institutions in the 21st Century Business Environment in Nigeria
Chapter One
AIMS AND OBJECTIVES
The purpose of this study is to establish the relevancy of accounting information as a tool for management decision-making.
The subsidiary objectives of this study are;
- The basic issues of how the accounting information systems are used to perform the generally recognized financial and management function in First Bank Nigeria Limited, Abdullahi Fodio Road Branch,
- To carefully look at the need for accounting information for management decision-making.
- To make suggestions as to the usefulness of accounting information to the users in
- The research seeks to know the extent to which the management of the organization under review has used the accounting
CHAPTER TWO
LITERATURE REVIEW
ACCOUNTING INFORMATION
However, in a broader view, American Institute of Certified Public Accountants (1970) stated the function of accounting is to provide quantitative information, primarily financial in nature, about economic entities that is needed in making economic decision” (an economic entity is a unit such as a business that has an independent existence). Etuk-Udo (2003) stated that the “modern accountants are concern not only on record keeping but also with a whole range of activities involving planning and problem solving, control and attention, directing and evaluation, review and auditing”. The present day accounting information on the ultimate needs those who use accounting information, whether these users are inside the business itself.
Stanford (1978) stated “an information system that measures, processes and communicates financial information allows the users to make reasonable choice among alternative of scarce resources in the conduct of business and economic activities”.
A distinction is traditionally made between accounting information that is provided for those people within the business and that which is provided for those outside the business (internal and external users). James (1979) stated that “management accounting concerns accounting information used mainly by those within the business organization (internal or management). And that it gives answers to;
- How income is being created?
- What are the available resources in the firm?
- How much does the company owe to the outside?
James (1979) also stated “financial accounting information report is used by the outsider (external or shareholders) of the organization”.
However, Robert (1979) said “whether management or financial accounting information, the both are very essential to the management in making decision to achieve business goals”. Furthermore, he said “accounting system creates information by recording business events as they occur and summarizing the data into accounting reports designed to meet the information needs of decision makers”.
The ultimate justification of accounting information therefore is its usefulness in certain objective. Robert (1979) stated these objectives and specified as follows;
- Report of financial information to proprietors, and other interestedparties; such reports may include the preparation of annual reports and statements of source and application of
- Provision of information for planning and decision making to management, through analysis of data about past transactions and events and projection of future economic events.
- Measurement of financial data by means of proper recording, analysing and interpreting in accordance with Generally Accepted Accounting Principle (GAAP).
- Internal control, including the safe guarding of organization’s moneyand other properties, the regular collection and payment of money owing to and by it, and the prevention and detection of errors and frauds by employees of the
BOOKKEEPING: AN ACCOUNTING PROCESS
Bookkeeping as a process of accounting is the means of recording transaction and keeping records. Mechanical and repetitive bookkeeping is only a small simple part of accounting.
Accounting on the other hand, includes the design of an information system that meets users’ needs, as described earlier. The major goals of accounting are the analysis, interpretation and the use of information. Chris (1990) said “Accountants look for important relationships in the figure they produce and are interested in finding trends and studying the effects of different alternatives.” Accounting includes system design, budgeting, cost analysis and income tax preparation or planning.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
According to Osuala (1986), a research is “a process of arriving at dependable solution to a particular problem through the planning and systematic collection, analysis and interpretation of data”. It can also be seen as a planned procedure towards solution of the problem (Burn 2000). Fafunwa (1994) also defined research as “an abstract noun that contains some psychological, philosophical and physical technique that gives new ideas which can be used in a society for future development”. This chapter states how the information for this study was collected and methods used for the collection.
RESEARCH DESIGN
These research design approaches was informed by need to use only First Bank Nigeria Limited, Abdullahi FodioRoad Branch as a case study and obtaining information directly from primary source of banking institution in respect of certain variables in relation to the Banking Institutions in Nigeria. The samples for the study were selected using the stratified and convenience sampling techniques. The samples were also studied under a natural condition. The primary data of questionnaires were analysed using descriptive and inferential analysis methods. These research works were also carried out within a space of one month.
POPULATION OF THE STUDY
In the course of finding out the importance of “Accounting Information and performance of Financial Institutions” a case study of First Bank of Nigeria Limited, Abdullahi Fodio Road Branch, the population involved the following;
- Staff of First Bank
- Non-staff (other institution)
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
ANALYSIS AND INTERPRETATION OF QUESTIONNAIRESDISTRIBUTED
A total of 20 questionnaires were administered on the samples of the study. The samples completed and returned a total of 17 questionnaires which represented 85% response rate while 3 of the questionnaires which represented 15% were not returned.
The table 4.1 below shows the analysis of the questionnaires administered and returned in the course of the study.
CHAPTER FIVE
SUMMARY, FINDINGS, RECOMMENDATION AND CONCLUSION
This chapter summarises the work, draw conclusions and make recommendations on the findings.
SUMMARY
Chapter one identifies the concepts and problems arising from accounting information in an organisation. The chapter gave a general background to the study in relation to accounting information.
The chapter also states the problems, significance and purpose of the study. Also formulated was the hypothesis of the study which was tested in chapter four.
Chapter two used secondary data of renowned authors in the field of accounting to create literature review for the study. The chapter discussed users of accounting information. A section in the chapter also gave a techniques used for decision making process and selecting the approximate decision.
In chapter three, the various procedures employed to obtain both the primary and secondary data were outlined. These include the design of the research work, the population of the study, sampling method used in gathering data and the tool to test the classified data.
The classification, presentation, evaluation and analysis of data was done in chapter four. The chapter also analysed the data obtained through the questionnaire and utilisation of interview tips on the hypothesis. The test tool was applied on the key questions.
Chapter five which is the last chapter summarized, drew conclusions and made recommendations on the study.
Generally, it was concluded that in all aspect of an organisation, accounting information contributes significantly to achieving set goals of both internal and external users of financial advisory services.
FINDINGS
The followings were the findings of the researcher in the course of carrying out the research work:
- The ledger accounts were not reviewed from time to time which wouldhave ensure that debtors with outstanding advances are not granted new ones for easy determination of outstanding balances at any point in
- The internal auditors of the bank were not given adequate report at theappropriate time to ensure due consideration and accurate
- Responsible officers are not at supervisory and management levelwhich would helped maintain adequate implementation, proper segregation of duties and follow up procedures to ensure adherence to management policies. Safeguarding the asset.
RECOMMENDATION
In the course of the study, some lapses were discovered through investigation and observation hence, the following recommendation:
- The ledger accounts should be reviewed from time to time to ensure thatstaff debtors with outstanding advances are not granted new ones for easy determination of outstanding balances at any point in
- The management should be able to compare alternative actions and events from the accounting information or report supplied them.
- Responsible officers should be both at supervisory and management levelto maintain adequate implementation, proper segregation of duties and follow up procedures to ensure adherence to management Safeguarding the assets.
- The internal audit of the bank should be given adequate report at theappropriate time to ensure due consideration and accurate
Finally, in the researcher’s view, “the successful implementation of these recommendations will facilitate the effectiveness of accounting information on management and control of business activities in First Bank of Nigeria Limited, Abdullahi Fodio Road Branch, Sokoto branch.
CONCLUSION
The study has proved the essence of accounting information in an organisation (economic enterprise). It has shown clearly the usefulness of accounting information as a tool for effective management decision making. Accounting information also gave priority to capital project that will improve the standard of the economy.
From the responses to the questionnaires, it was evident that management of organizations use accounting information for decision making.
Finally, it was discovered that inadequate accounting facilities greatly militate against management decision making.
References
- Asika, N (1998); Research Methodology on the behavioural Science, Nesta Publishers Ltd, Enugu, Nigeria.
- American Institute of Certified Public Accountants (AICPA) (2000), Accounting Terminology No. 2 New York.
- American Institute of Public Accountants (1997), Statement of the Accounting Principles bound No. 4, “Basic Concept and Accounting Principles underlying financial statement of Business Enterprise”, New York.
- Badejo, F. (1999), Research Methodology in Nigeria, Rahama Printing and Publishers, Maiduguri.
- Calvin, E (2005), Advance Accounting, Mark Inc Publishers, Homewood New York.
- Central Bank of Nigeria (2003), “Financial Information System (MIS). Godday Printing Ltd, Jos Plateau, Nigeria.
- Goaham, J. and Chris, H. (1990), Accounting for Business Organization (A Practical Approach), Macmillan Education Ltd, London.
- Morenikeji, W. (1998), Essential of Research methods for Planners and Environmental Researchers, Gabasfrer Educational Printer, Box 4437, Ibadan.
