Professional Documents
Culture Documents
1:0 INTRODUCTION
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highly competitive global market. In days gone by there
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product range created the need for service organization to
management accounting.
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To compete successfully in todays highly competitive
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Obviously, these significant developments brought to the
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i. Impropriety of transactions which are not in
business transactions.
iii. Lack of proper planning before embarking on
business transactions.
iv. Lack of adequate internal audit control
decision making.
control?
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ii. Is accounting an increasingly part of
objective.
iv. What are the techniques that accountants use
been propounded.
H1: The accountants have increasingly improved the
organizations.
H0: The accountants have not increasingly improved the
organizations.
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1:5 OBJECTIVES OF THE STUDY
process in organization.
Accessing the role, functions and relevance of
objectives.
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arriving at sound management decision
measures.
iv. Benefit students undergoing courses in
share price.
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TAXATION: Levying by public authorities citizen within
follow.
of all undertaking.
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JOB ORDER COSTING: Is a cost system whereby the cost
accumulated separately.
net income.
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orderly and efficient manner, ensure adherence to
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Chapter three covers the research methodology and
sources of data.
While chapter four, covers data presentation and analysis
generally.
and recommendations.
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CHAPTER TWO
1:0 INTRODUCTION
The thrust of this chapter primarily is to provide a
topic.
DECISION MAKING
According to Lucey (2002) Decision making is concerned
is achieved.
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have to analyse the cost and benefit and weigh the past
control measures.
discovered.
relationship.
based.
2:3 STANDARD COST: A YARD STICK FOR
PERFORMANCE MEASURE
Standard costing as defined by Lucey (2002) is a
variance analysis.
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The steps involved in the operations of a standard costing
follows:
i. Setting performance target;
ii. Calculating and recording the actual results;
iii. Comparing the actual results with the set
analysis;
v. Reporting the variances to the responsible
officials
vi. Taking action by management where appropriate
future.
that historical cost data does not satisfy the needs for
a longer time.
ii. Ideal standard: this is a standard based oh
conditions.
change.
The formulae for measuring or calculating variances as
summarized below:
Variance formular model graph
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Actual price Standard price
AP x AQ SP X AQ
PRICE QUANTITY
ACTUAL QUANTITY 1 2
STANDARD QTY 3 4
SQ X AP SQ X SP
KEYS:
SQ = Standard Quantity
AP = Actual price
AQ = Actual quantity
SH = Standard hours
From the above model graph
Quantity variance = Quadrant + 2 Quadrant 4
= (SP X AQ) (SQ X SP)
= SP (AQ SQ)
Price variance = AQ (SP AP)
Labour variance = SP (SH AH)
The variance can be sub-divided into sales and labour.
Damagun (2004)
i. Sales revenue variance
a. Sales price variance = QP (SP AP)
b. Sales quantity variance = SQ(AQ SP)
ii. Material variance
a. Material usage variance = SP(SQ AQ)SP
b. Material price variance = (SP AP) QP
iii. Labour variance
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a. Labour efficiency variance (measures un hours
performance year.
i. Two way variance
ii. Three way variance
iii. Four way variance
BUDGETING
The variance so far discussed are revealed by and
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among the group to be invested in. thus capital
investment proposals.
Capital investment decisions are those decision that
accept
ii. Determining the total amount of capital
proposed commitment.
This can be stressed or flow chart form as follows
DIAGRAM
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Capital budgeting concern with fixed assets acquisition
them.
organization.
a. Provide a ranking of projects
b. Be applicable to any receivable investment.
SELECTION CRITERIA
1. Traditional techniques: These techniques use
group.
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a. Pay Back Period (PBP) or cash recovery period
project.
PBP = Cash outflow x year for project with control
Cash inflow x year cash inflow
Accounting Rate of Return (ARR) expresses the
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since the techniques conflicts/opposes one
embark upon.
following areas:
1. Determination which specific projects a firm should
accept
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2. Determining the total amount of capital expenditure
USED IN PRACTICE
The payback method is frequently use in practice
because
It is considered useful when firm face liquidity
investments
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It serves as a simple first-level screening device that
today is not the sae with last year due to inflation, which
used:
Net present value (NPV)
NPV = present values of cash inflow (PVC1)
= ct x1
(k1-k) (1-k)t
Where t cost of is cash outflow
1 = discount factor
(1-k)
K = Cost of Capital
The decision rule used with NPV is to accept project
whose
NPV = > 0 AND reject those with NPV < 0
NPV = PVC1 PVC0
a particular technique:
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All Smallest Largest
Organisation Organisation Organisatio
% % %
Payback 63 56 55
(unadjusted)
Disc PBP 42 30 48
ARR 41 35 53
IRR 57 30 85
NPV 43 23 80
employ IRR.
of return is
Annual cash flows
Initial investment
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2:0 RELEVANCE OF AUDIT IN DECISION MAKING FOR
CONTROL
So far we have been focusing on accountant as a
reporting.
This is done by professionally qualified accountant called
Auditor.
The importance of an auditor (accountant) is aiding
perspectives.
INTERNAL CHECK
As part of internal control, organizations are required to
that
i. senior officials approve the application
ii. a payment voucher is raised by a clerk in line
with approval.
iii. If voucher is approved a cheque is written by
different clerk
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iv. The cheque is signed by two or more senior
INTERNAL CONTROL
Control is the process of ensuring that a firms activities
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Drucker (1964) distinguishes between controls and
will be achieved.
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The institute of chartered accountants in England and
by ensuring
i. Proper authority of all expenditures.
ii. That internal check is working as designed.
iii. That all transactions are properly recorded.
This form of control is enforced by the following method:
1. STANDARD COST CONTROL: For an auditor to
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justification for expenditure must assume the same
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auditor should carefully examine the list of individual
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i. That the system of operation is followed as
expected
ii. That internal control is as efficient as possible
iii. That economic consistency with efficiency is
audit.
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CHAPTER THREE
3:0 RESEARCH METHODOLOGY
3:1 INTRODUCTION
Methodology forms an integral part of any research
RESEARCH SAMPLE
My representative sample of 200 out of 1520 staff were
selected in a stratified way based on random sampling
a n size
senio 220 220/1520 0.14 0.14x200=
r 29
staff
junio 1300 1300/152 .86 .86
r
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staff 0 x200=171
Total 1520 1.00 200
analysis.
Unstructured oral interview methodology is a technique
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unstructured oral interview. Content analysis
of my hypothesis or otherwise.
= Summation
O = Observed variable
E = Expected
Expected is represented by the formula
E = TCxTR
GT
Where
E = Expected
TC = Total column of that cell
TR = Total row
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GT = Grand total
Degree of freedom is represented by the formulae
DF = (C 1)(R 1)
Where
DF = Degree of freedom
C = No of columns
R = No of Rows
If Chi-square (X2) calculated is greater than the Chi-
reliable inference.
3:6 SUMMARY
Summarily my representative sample size of 200 from
of the population.
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Unstructured oral interview compliment with content
research findings.
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CHAPTER FOUR
4:0 DATA PRESENTATION AND ANALYSIS
4:1 INTRODUCTION
The thrust of this chapter is present the data collected
otherwise.
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Table 4:2 Age distribution of Respondence
c
ND/NCE 50 25%
HND/BSc 100 50%
Others 35 17.5%
Total 200 100
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Top management 65 32.5%
Senior staff 100 50%
Junior staff 35 17.5%
Total 200 100%
satisfactory
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Yes 170 85%
No Nil Nil
I dont know 30 15%
Total 200 100%
making?
organizational goal?
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By creating a 80 40%
competitive advantage
Providing management 120 60%
with information in
policy making
Total 200 100%
Table 4:10 what are the critical factors impeding the effectiveness of your
accounting department?
non-computerization of
accounting processes
Total 200 100%
that:
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H1(Research Hypothesis): Accountants have significantly
staff
Total 176 24 200
otherwise.
will be used.
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Respondents O E O-E (O-E)2 (O-E)2/E
Agreed top mgt 21 18.5 2.5 6.25 0.34
Agreed Snr & Jnr 155 157.5 -2.5 6.25 0.04
Staff
Disagreed top mgt 0 2.5 -2.5 6.25 2.5
Disagreed Snr & 24 21.5 2.5 6.25 0.29
Jnr
Staff
(O-E)2/E 3.17
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The analysis of the data in table 4:3 above reveals that
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between a sound management team and optimal
accounting system.
organization.
exogenous factors.
significance = 9.488.
organization.
4:4 SUMMARY
This chapter has scientifically X-ray and evaluates the
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CHAPTER FIVE
5:0 SUMMARY, CONCLUSION AND
RECOMMENDATION
5:1 SUMMARY OF MAJOR FINDINGS
These research study is undertaking in an effort to
research study.
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operations to the desired direction with competitive
making.
iii. Accountants significantly aid the speedy
5:2 CONCLUSION
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An accountant to the management is synonymous to a
communication.
5:3 RECOMMENDATION
Knowledge is never static, it rather move in a dialectical
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researcher is of the opinion that cost and management
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