THE EFFECT OF FINANCIAL ACCOUNTING REPORTING ON THE MANAGEMENT OF A BUSINESS.
(A CASE STUDY OF EMENITE LTD)
The main purpose of this study is to the effects of financial accounting reporting on management of a business with to Emenite Ltd. This research work Determined the profit generated in a business at a given accounting period usually a year, find out how the financial Accounting reporting effects the management business, examined why financial accounting reporting is used in decision making in a business, These are the areas that the researcher concentrated while carrying out this research work. The first chapter is the introductory part of the research work. This chapter also contains the background of the study, statement of problems, research Question etc. Data for the study was sourced from two main sources which include Primary and Secondary sources of data collection. Primary data: Questionnaires and oral interviews were used to collect information from the respondents. Secondary data : Journals, magazine and other relevant materials relating to the area of my investigation will be review. Extensive literature review was carried out on direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. Simple tables, pie-charts and percentages was used in treatment of data while chi-square was used in the research work. Based on the findings,
TABLE OF CONTENTS
Title page. . . . . . . . . . i
Approval page . . . . . . . . . ii
Dedication . . . . . . . . . iii
Acknowledgement . . . . . . . . v
Abstract . . . . . . . . . . vi
Table of contents . . . . . . . . vii
1.1 Background of the Study . . . . . . 1
1.2 Statement of the Problem . . . . . 3
1.3 Objectives of the Study . . . . . . 4
1.4 Research Question . . . . . . . 5
1.5 Significance of the Study . . . . . . 6
1.6 Scope of the Study. . . . . . . 7
1.7 Limitation of the Study . . . . . . 8
Review of Related Literature
2.1 What is Financial Accounting . . . . . 9
2.2 Steps when Reporting to Internal users . . . 11
2.3 Taxation and Accounting Rules for Foreign Earnings . 12
2.4 Accountant’s Reporting Role . . . . . 15
2.5 Skills Accountant Require in Respect of
Internal Reports . . . . . . . 16
2.6 Working Capital Polices . . . . . . 17
2.7 Survey Approach and Sample. . . . . 18
Reference. . . . . . . . . 20
Research Design and Methodology
3.1 Research Design . . . . . . . 21
3.2 Area of Study . . . . . . . . 21
3.3 Population of Study. . . . . . . 21
3.4 Sample Method . . . . . . . 22
3.5 Research Instrumentation . . . . . 25
3.6 Validity and Reliability of Research Instrument . 25
3.7 Source of Data . . . . . . . . 26
3.8 analytical Technique . . . . . . . 27
Presentation and Analysis of Data
4.1 Presentation and Analysis of Data . . . . 29
Summary of Findings, Conclusion and Recommendation.
5.1 Summary of Findings . . . . . . 36
5.2 Conclusion . . . . . . . . 38
5.3 Recommendation. . . . . . . . 40
Bibliography . . . . . . . . 44
Appendix I . . . . . . . . 47
Appendix II . . . . . . . . 48
1.8 BACKGROUND OF THE STUDY
Financial Accounting has help so much in the preparation of reports on the performance of a business. This report is executed through a means known as financial statement, which shows the details or activities carried on a business and its performance so far. The statement also reports the financial status of a firm at a particular time usually one year. It determine whether profit or loss is made in a business and the flow of resources during that period.
International Accounting Standard Board (IASB) Changed the Financial Accounting and report section of the American Accounting Association (AAA) to report on papers and expose drafts relating to financial Reporting section of the American Association also made provision for comment letters which will help the managers or directors to manage the resource of the business with care and caution. Those who disobey the warning of communicated financial accounting information and up in a “business accident”.
There are other sources of information which have impacted on the management of business, in which the combination of these sources gives an information system a complete nature i.e. why Farm wood said that “It must not be thought that accounting of any form is the management control system instead, it is part of it”. The financial statement of a business informs the external users on what is happening in the business but due to the preparation of the financial statement requires the employment of experts who has experience on the preparation. This has made some business with low capital to forfeit the preparation.
This project help in knowing the effect of financial accounting reporting on the management of a business and its benefits to the world at large.
1.9 STATEMENT OF THE PROBLEM
There have been difficulties in reporting the financial accounting of a business. These difficulties can be caused by the following factors:
1. The cost of collecting any information and the internal control procedures have some loops holes.
2. The financial system in most business organization does not undergo in full the principles and guidelines of accounting system.
3. When there is element of fraud in the recording of the transaction of the business.
4. Poor flow of information about the business
5. The misrepresentation of information by the management or staff of business.
1.10 OBJECTIVES OF THE STUDY
This work is carried out for the achievement of the following objectives, which includes:
a. To determine the profit generated in a business at a given accounting period usually a year.
b. To find out how the financial Accounting reporting effects the management business.
c. To examine why financial accounting reporting is used in decision making in a business.
d. To determine why financial statement is used in monitoring the activities of a business.
e. To review the extent at which reporting of financial accounting has help in maximizing the scope of the business.
1.11 RESEARCH QUESTION
The Research question listed below will help in the achievement of the objective above.
1. How can the profit generated in a business be determined within a given accounting year?
2. To what extent does financial accounting reporting effect management of business?
3. How can financial accounting reporting be used in decision making in a business
4. How can financial statement be used in monitoring the activities of a business
5. To what extent has the reporting of financial accounting helped in maximizing the scope of the business
1.12 SIGNIFICANCE OF THE STUDY
At the end of this work, it is expected that it will help to improve the financial reporting standard of businesses, what effective management of the business will be reached.
It will also be useful in examining and evaluating the effect of financial accounting as information system and directing the business person to such effect.
The research will be useful in warning not only business person but any person who neglects financial accounting, this will lead to obedience of financial statement prepared.
It will also serve as a reference purpose to the users of accounting information such as shareholders, government, customers, investors etc.
1.13 SCOPE OF THE STUDY
The research work will base its attention on Emenite Ltd with reference to the effect of financial reporting on its management. It shall also draw ideas from textbooks in all forms or branches of Accounting. It will cover the past and present financial accounting reporting on the management which will help in the planning and budgeting for effective financial reporting in the future.
1.14 LIMITATION OF THE STUDY
During the Research findings, there were limitations encountered in carrying out the work. Those limitations include the following factors:
Time: The Researcher is a student and has limited time to carryout the research due to his lecturers and other functions or activities embarked on the school.
Finance: The Research requires huge capital i.e. it capital intensive and the Researcher has limited capital to carryout the work because she is a student.
Scope: The scope covered by the research work is voluminous. This has made the research not to cover all the areas needed but made use of sample study which she generalized on the population.