Patricia's Project 1

The Impact of Accounting Information on
Management Decision Making Process in an

organization: Case study; UNICS Plc. Akwa, Littoral
A RESEARCH PROJECT SUBMITTED IN PARTIAL
FULFILMENT OF THE REQUIREMENTS FOR THE
AWARD OF A BACHALORS DGREE IN
ACCOUNTING.
Written and Presented by Tanyi Patricia B. Page i

School of Business: Field of Business and Finance
Certification
This is to certify that the project titled “The Impact of Accounting
Information on Management Decision Making Process in an organization”
has been carried out by Tanyi Patricia Bekume for the award of a Bachelors
degree in accounting
Signature……………………… Date…………………………
Supervisor: Mr. MBAH NELSON ZHEA
Signed: ……………………… Date …………………………
Written and Presented by Tanyi Patricia B. Page ii

Dedication
Written and Presented by Tanyi Patricia B. Page iii

Acknowledgments
I would like to thank God the Almighty for the strength, guidance and protection
during the course of this study. Special thanks deeply go to my supervisor prof.
MBAH NELSON for his tireless effort, support; advice and continued guidance that
have made this work a success. In the same note, many special thanks also go to my
parents for the continued concern and encouragement they offered me during the
times of my research work.
Written and Presented by Tanyi Patricia B. Page iv

ABSTRACT
The study examined the impact of accounting information on quality decision making
process in an organization, a study of commercial banks in littoral, Douala.
In the market economy, the way in which commercial banks is being managed and
developed is extremely important, because every wrong or misleading decision comes
at a high price. Therefore each decision that management brings should be based on
precise, qualitative, timely and unambiguous information. In order to serve its
purpose, after information are collected they are processed, classified and stored
within the company. For effective and efficient information processing it is necessary
to have an integrated set of components, called an information system. Undoubtedly,
significant role in information processing for effective decision making belongs to
accounting information system. Therefore, the purpose of the study is to analyze the
situation in the Littoral Douala related to the use and adoption of accounting
information system and its impact on quality decision making process. Questionnaire
distributed to the business organizations and interviews with the managers, as a data
collection method, will be used. Statistical and graphical methods will be used to
demonstrate findings.
Keywords: information systems, accounting information, accounting information

systems, decision making, business organization, and Douala Littoral
Written and Presented by Tanyi Patricia B. Page v

Résume
L'étude a examiné l'impact des informations comptables sur le processus de prise de
décision de qualité dans une organisation, une étude des banques commerciales au
littoral, Douala. Dans l'économie de marché, la manière dont les banques
commerciales sont gérées et développées sont extrêmement importantes, car chaque
décision erronée ou trompeuse vient à un prix élevé. Par conséquent, chaque décision
que la direction apporte devrait être basée sur des informations précises, qualitatives,
opportunes et sans ambiguïté. Afin de servir son objectif, une fois les informations
sont collectées, elles sont traitées, classées et stockées au sein de la société. Pour un
traitement efficace de l'information, il est nécessaire de disposer d'un ensemble de
composants intégré, appelé système d'information. Sans aucun doute, un rôle
important dans le traitement de l'information pour une prise de décision efficace
appartient au système d'information comptable. Par conséquent, l'étude a pour objectif
d'analyser la situation dans le littoral Douala liée à l'utilisation et à l'adoption du
système d'information comptable et à son impact sur le processus de prise de décision
de la qualité. Questionnaire distribué aux organisations commerciales et aux entretiens
avec les gestionnaires, en tant que méthode de collecte de données, sera utilisée. Les
méthodes statistiques et graphiques seront utilisées pour démontrer des résultats.
Written and Presented by Tanyi Patricia B. Page vi

Tables of contents
Certification………………………………………………………………………………… ii
Dedication…………………………………………………………………………………... iii
Acknowledgments
…………………………………………………………………………...iv
Abstract ………………………………………………………………………………………v
Resume ………………………………………………………………………………………vi
Tables of contents………………………………………………………………………….. vii
CHAPTER ONE: INTRODUCTION……………………………………………………... 1

1.1 Background and research context …………………………………………………………1
1.2 Problem statement ………………………………………………………………………...3
1.3 Research questions……………………………………………………………………….. 4
1.4 Objective of the study……………………………………………………………………...4
1.5 Hypothesis statements……………………………………………………………………..4
1.6 Significance of the study…………………………………………………………………. 4
1.7 Scope of the study..………........…………………………………………………………..5
1.8 Rationale of the research ……………………….……………………………………..…..5
1.9 Limitations/ challenges …………………………………………………………………...6
CHAPTER TWO: LITERATURE REVIEW……………………………………………..7

2.0 Introduction ………………………………………………………………………………7
2.1 Conceptual framework…………………………………………………………………….7
2.1.1 What is accounting? …………………………………………………………………….7
2.1.2 What is accounting information system? ……………………………………………….7
2.1.3 What is accounting information?......................................................................................7
2.1.4 What are financial statements?..........................................................................................8
2.1.5 What is
decision?...............................................................................................................8
2.1.6 ELEMENTS OF AN EFFECTIVE DECISION MAKING PROCESS ………………..8
2.1.7 MANAGEMENT DECISION REQUIRING MANAGEMENT ACCOUNTING INFORMATION ……….……….9
2.1.8 ACCOUNTING CONCEPTS …………………………………………………………10
2.1.9 Theoretical review ……………………………………………………………………..12
2.2.1 QUALITATIVECHARACTERISTICS OF ACCOUNTING ………………..……….13
2.2.2 ACCOUNTING INFORMATION TOOLS …………………………………………...14
2.2.3 USERS OF ACCOUNTING INFORMATION ……………………………………….16
2.2.4 MANAGEMENT DECISION MAKING LEVELS …………………………………..18
2.2.5 SHORT TERM DECISIONS AND LONG TERM DECISIONS……………………..19
2.2.6 DECISION MAKING PROCESS
……………………………………………………..19
Written and Presented by Tanyi Patricia B. Page vii

2.2.7 TYPES OF DECISION MAKING

…………………………………………………….21
CHAPTER THREE: RESEARCH METHODOLOGY…………………………………23

3.1 Introduction………………………………………………………………………………23
3.1.1 AREA OF THE STUDY……………………………………………………………….23
3.1.2 RESEARCH DESIGN…………………………………………………………………
23
3.1.3 POPULATION OF THE STUDY…………………………………………………….. 23
3.1.4 SAMPLE SIZE AND SAMPLING TECHNIQUE…………………………………… 24
3.1.5 VALIDITY AND RELIABILITY……………………………………………………..24
3.1.6 SOURCE AND METHOD OF DATA COLLECTION TECHNIQUES ……………..25
3.1.7 METHOD OF DATA ANALYSIS…………………………………………………….26
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION OF

FINDINGS………..27
4.1 Introduction………………………………………………………………………………27
4.1.1 THE RESPONSE RATE……………………………………………………………….27
4.1.2 SAMPLE CHARACTERISTICS………………………………………………………27
4.1.3 TEST OF HYPOTHESIS ……………………………………………………………...30
4.1.4 HYPOTHESIS ONE…………………………………………………………………...30
4.1.5 HYPOTHESIS TWO…………………………………………………………………..32
4.1.6 PEARSON CORRELATION ANALYSIS……………………………………………33
4.1.7 DISCUSSION OF FINDINGS…………………………………………………………34
CHAPTER FIVE: SUGGESTIONS AND CONCLUSION……………………………...35

5.1 Introduction………………………………………………………………………………35
5.1.1 SUMMARY……………………………………………………………………………35
5.1.2 RECOMMENDATIONS………………………………………………………………36
5.1.3 CONCLUSIONS…………………………………………………………………….…37
Bibliography…………………………………………………………………………………
38
Appendices…………………………………………………………………………………..40
Written and Presented by Tanyi Patricia B. Page viii

CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Accounting is the language of business as it is the basic tool for recording, reporting
and evaluating economic events and transactions that affect business enterprises. It
processes all documents of a business financial performance from payroll, cost, capital
expenditure and other obligations to sale revenue and owners’ equity. It provides
financial information about one’s business to the internal and external users, such as
employees, managers, potential investors, financial institutions and others.
The making of decision, as everyone knows from personal experience is a

burdensome task, says Wadia(1966). In most cases indecision is as disastrous as
making a wrong one, therefore a plan of action is indispensable. Management is
constantly confronted with the problem of alternative decision making especially
knowing that resources are relatively scarce and limited. It is therefore pertinent that
good accounting information be made available for proper and accurate decision
making, maximization of profitability and optimal utilization of scarce resource.
Accounting information is not only necessary for evaluation of the past and keeping
the present on course; it is useful in planning the future of the enterprise. It is a part
and parcel of today’s life which is necessary to understand the accurate financial
situation of the organization and used as the basis of making any decisions. Since
strategic decisions have long-term effect on the business and therefore it is important
to analyze accounting information for making strategic decisions. Accounting
information helps managers understanding their tasks more clearly and reducing
uncertainty before making their decisions (Chong, 1996). Accounting is sometimes
referred to as a means to an end, with the ending being the decision that is helped by
the availability of accounting information (Arnold and Hope, 1990).Accounting
systems can aid in decision making, provide information relevant to the decision and
to the decision maker (Gray, 1996). Effective and efficient accounting information
plays a central role in management decision making (Tiramisu Tunji, 2012).
Accounting information is one type of information recognized as a ‘learning machine’
that can help to evaluate how objectives might be achieved by quantifying the
financial impact of each alternative available to the decision (Burchell et al., 1980).
Accounting and financial information are among the most important information
widely used in the managerial decisions (Royaee, Salehi, & Aseman, 2012). Within
contemporary economic conditions, a successful manager needs a lot of reliable
accounting information in order to be able to make quality business decisions (Miko,
1998). Economical information especially financial and accounting ones are the
Written and Presented by Tanyi Patricia B. Page 1

information which always managers use in short term and strategic decisions and they
may have most application among different variables effective in decision-making and
in all types of decisions (Royaee, Salehi, & Aseman, 2012 and Hubber, 1990).
Decision making is the process of choosing alternative courses of action using

cognitive processes. Making decision is necessary when there is no one clear course of
action to follow. Accounting systems can aid our decision making by providing
information relevant to the decision and to the decision making. Accounting systems
also provide check for the validity through the process of auditing and accountability
(Gray et. Al 1996). Effective and efficient accounting information plays a central role
in management decision making.
The making of decision, as everyone knows from personal experience is a

burdensome task, says Wadia (1966). In most cases indecision is as disastrous as
making a wrong one, therefore a plan of action is indispensable. Management is
constantly confronted with the problem of alternative decision making especially
knowing that resources are relatively scarce and limited. It is therefore pertinent that
good accounting information be made available for proper and accurate decision
making, maximization of profitability and optimal utilization of scarce resource.
There are some areas where accounting information helps decision making. It
provides investors a baseline of analysis for – and comparison between – the financial
healths of security-issuing institutions. Financial accounting helps creditors assess the
solvency, liquidity and creditworthiness of businesses. Financial accounting (and its
cousin, managerial accounting) helps organizations make business decisions about
how to allocate scarce resources. Financial accounting information helps in making
Investment decisions as fundamental analysis depends heavily on a company’s
balance sheet, its statement of cash flows and its income statement. All of the financial
statements for publicly traded companies are created and reported according to the
financial accounting standards set forth by the Financial Accounting Standard Board
(FASB).
Without the information provided by financial accounting, investors would have less
understanding about the history and current financial health of stock and bond issuers.
The requirements set forth by the FASB create consistency in the timing and style of
financial accounts, which means that investors are less likely to be subject to
accounting information that has been filtered based on a firm’s current condition.
Accounting information also aids lending or dividend decisions as number of common

accounting ratios that creditors rely on, such as the debt-to-equity (D/E) ratio and
times interest earned ratio, are derived from the financial statements. Even for
privately owned businesses that do not necessarily follow the requirements of the

FASB, no lending institution assumes the liability of a large business loan without
critical information provided by financial accounting techniques.
Reliable accounting serves a practical function for the firms themselves. Beyond the
regulatory and compliance hurdles that financial accounting helps clear, financial
accounting also helps managers create budgets, understand public perception, track
efficiency, analyze performance and develop short- and long-term strategies.
In this study three decision areas such as financial decision, investment decision and
dividend decision were selected. These different areas of decision somehow or in one
way or the other solely depends on accounting information. Without accounting
information individuals, companies or business organization into various kinds of
investments cannot determine financial investments and dividend decision to be taken.
Accounting information helps to take long term investment decisions by giving the
proper view of present and future conditions of the organization. This study is initiated
to evaluate the importance i.e. the impact of accounting information on decision
making process.
1.2 Statement of the problem

Information is absolutely necessary for decision making in any business organization.
The problem however lies in the quality and validity of the information, i.e. if it is
timely, adequate, and clear. The main purpose of the use of accounting information is
to reduce risk, failure and uncertainties and also stay ahead of competitors. Not
minding the immense benefit derived from the of use of accounting information, it is
generally acknowledged that most unqualified accountants generate inaccurate
information and so result in failure of organizations to achieve desired goal . In other
wards the major problem discovered when making decisions in an organization is the
identification of fundamental concept of accounting information to be implemented by
each company which can affect the company positively or negatively.
These problems stated immensely contribute to the failure of the use of accounting
information in business with the result that inappropriate decisions are made to the
detriment of the organization. It is only through accounting information that managers
and external users get a picture of the organization.
This study will seek to show the information organization can derive from accounting
information & their usefulness for decision making in business organization. The
purpose is to see the need for accounting information to any business organization
how it helps in decision making.
1.3 Research questions

Does proper use of accounting information helps the commercial organization in

making efficient and effective decision?
Does accounting information affect the commercial organization positively or

negatively?
Is there any relationship between the view of the employees and accounting
information within a commercial organization?
1.4 Objective of the study

The major objective of this study is to examine or to evaluate the impact of accounting
information on decision making process. But more specifically, it attempts to achieve
the following:
 To know the value of accounting information in decisions made in an

organization.
 To explain the use of accounting information to users and to also identify the
various ways in which each user can implement or make use of the information
and the benefits derived from them.
 To make suggestions that will enhance or promote the effective use of

accounting information in an organization.
 To find the causes of failure in the attainment of organization objective, as a

result of inadequate utilization of accounting information.
1.5 Statement of hypothesis

Ho: Null- Hypothesis
H1: Alternative Hypothesis
Ho: Proper use of accounting information does not help business organizations in
making efficient and effective decisions.
H1: Proper use of accounting information help business organizations in making

efficient and effective decisions.
1.6 Significance of the study
 This research study will help to maximize the beneficial impact of accounting
information on the decision making process of an organization. This boosts the

profitability of the organization as well as ensuring its continuity as a business

entity.
 It will help in the efficient allocation of scarce resources that have alternative
being used as well as increase productivity thereby uplifting the standard of
living. It will review the improvement in the organization or company handling
the accounting information and show equally the ways through which
improvement could be accomplished.
 This research study will help us to know the beneficiaries of accounting

information in decision making which are: creditors, investors, management
and shareholders.
 This project will also serve as a reference to student who may be interested to
embark on a research of this nature.
1.7 Scope & limitation of the study
This study could have covered generally the impact of accounting information on
decision making process in various organizations in the littoral but due to the
challenges of such a task especially the financial resources with which to execute it,
there was some limitations encountered during the course of research, those
limitations include the following:
The confidential nature of accounting information in the business organization posed

as a problem to this study.
The researcher was unable to reach all the members of the sample as a result of their
frequent travels and busy schedule.
The sample used in the research though representative but it is relatively small
compared to the population, as a result of lack of adequate financial resources with
which to carry out the research on a greater sample.
1.8 Rationale of the research

 Creditor: A company’s financial information enables a creditor determine
whether amount owing to them will be paid when due.
 Investor: The investors provide risk capital so they need the information to
help them determine whether they should buy, hold or sell.

 Management: The financial information helps them to analyze the

performance and position of the organization and to take appropriate measure
to improve the company’s result.
 Tax Authorities: It helps them to determine the credibility of the tax return
filed on behalf of the company.

CHAPER TWO:
LITERATURE REVIEW
2.0 Introduction
2.1 Conceptual framework

Accounting information is the key component in most, if not all, management
decisions of an enterprise. Every year, business decisions worth billions of dollars are
made. What is missing in most decisions is the quality component.
2.1.1 What is accounting?

Mbanefo, (1997) defines accounting as a measurement and communication system to
provide economic and social information about an identifiable entity to permit users to
make informed judgments and decisions leading to an optimum allocation of
resources and the accomplishment of the organizations objectives.
According to Fess and Niswonger, accounting is the process of identifying, measuring

and communicating economic information to permit informed judgments and
decisions by users of the information.
The purpose is to help people that use this information to make more informed
decisions.
2.1.2 What is accounting information system?

According to Wikipedia, AIS is a system of collecting, storing and processing financial
and accounting data that are used by decision makers.
According to Lallo and Selamat (2014) and saira et al. (2010), they define AIS as a
system that processes data and transactions to provide users with information they
need in order to plan, control and operate businesss.
2.1.3 What is accounting information?

According to Wikipedia, Accounting information is the data that have been processed
properly to give a full meaning and can be used in ongoing operations and future
decision-making.
Accounting information:

All quantitative and non-quantitative information that concern with the

economic events that are processed and reported by information system in the
financial statements that presented to external and internal users.
2.1.4 What are financial statements?

Financial statement according to J. AOhison (1999) was defined as a written
report that summarizes the financial status of an organization for a stated period of
time. It includes an income statement and balance sheet or statement of the financial
position describing the flow of resources, profit and loss and the distribution or
retention of profit.
2.1.5 What is decision?

Decision: is the way to move your business to achieve all tasks and goals and
the management must put useful factors and options, and determine their importance
and priority in right way.
Definition of Decision Maker
A decision maker: is a person, or group of people (e.g., a committee), who makes the
final choice among the alternatives.
Definition of decision making:
According to Gupta (2004) Decision making is a process of selecting from a set of

alternative courses of action which is thought to fulfill the objectives of the decision
problem more satisfactorily than others. It is a blend of thinking, decision and acting.
According to Sherkler (1981) decision is a choice where a person comes to a

conclusion about a situation. It represents a course of behaviour or action about what
must or must not be done.
2.1.6 ELEMENTS OF AN EFFECTIVE DECISION MAKING PROCESS:
According to Gupta (2004), effective decision making implies objective quality of

decision and their acceptance by those who are to execute the decisions. The
following are guidelines for effective decision making.
Problem rationalization:
The clear rationalization that the problem was generic and could only is solved
through a decision that establishes a rule or a principle. Know the problem you're
solving.

Boundary conditions:
The definition of the specifications that the answer to the problem has to satisfy, that
is, of the “boundary conditions” Know your range of options that will still count as
success.
The right thing to do:
Before you decide what’s feasible, first figure out what the right thing to do is.
Action:
Turn decisions into action.
Feedback:
Get feedback on what’s working and what’s not.
2.1.7 MANAGEMENT DECISION REQUIRING MANAGEMENT

ACCOUNTING INFORMATION
In particular, Atrill & McLaney (2009) identifies four broad areas, where management
accounting information is necessary to support managers in decision- making:
developing long-term plans and strategies, performance evaluation and control,
allocating resources and determining costs and benefits
Developing objectives and plans
Managers are responsible for establishing the mission and objectives of the business
and then developing strategies and plans to achieve these objectives. Management
accounting information can help in gathering information that will be useful in
developing appropriate objectives and strategies. It can also generate financial plans
that set out the likely outcomes from adopting particular strategies. Managers can
then use these financial plans to evaluate each strategy and use this as a basis for
deciding between the various strategies on offer.
Performance evaluation and control
Management accounting information can help in reviewing the performance of the

business against agreed criteria. We shall see below that non-financial indicators are
increasingly used to evaluate performance, along with financial indicators. Controls
need to be in place to ensure that actual performance conforms to planned
performance. Actual outcomes will, therefore, be compared with plans to see whether
the performance is better or worse than expected. Where
there is a significant difference, some investigation should be carried out and
corrective action taken where necessary.

Allocating resources
Resources available to a business are limited and it is the responsibility of managers to

try to ensure that they are used in an efficient and effective manner.
Decisions concerning such matters as the optimum level of output, the optimum mix
of products and the appropriate type of investment in new equipment will all require
management accounting information.
Determining costs and benefits
Many management decisions require knowledge of the costs and benefits of pursuing
a particular course of action such as providing a service, producing a new product or
closing down a department. The decision will involve weighing the costs against the
benefits. The management accountant can help managers by providing details of
particular costs and benefits. In some cases, costs and benefits may be extremely
difficult to quantify; however, some approximation is usually better than nothing at
all.
2.1.8 ACCOUNTING CONCEPTS

Substance over form;
The principle that transactions and other events are accounted and presented in
accordance with their substance and economic reality and not merely their legal form
 Separate Business Entity Concept.
In accounting we make a distinction between business and the owner. All the books of
accounts records day to day financial transactions from the view point of the business
rather than from that of the owner. The proprietor is considered as a creditor to the
extent of the capital brought in business by him.
 Money Measurement Concept
In accounting, only those business transactions are recorded which can be expressed
in terms of money. In other words, a fact or transaction or happening which cannot be
expressed in terms of money is not recorded in the accounting books.
 Dual Aspect Concept
This states that there are two aspects of accounting, one represented by the assets of
the business and the other by the claims against them. The concept states that these
two aspects are always equal to each other. In other words, this is the alternate form of
the accounting equation:

Assets = Capital + Liabilities
That is, every debit amount should have a corresponding credit amount.
 Going Concern Concept
Accounting assumes that the business entity will continue to operate for a long time in
the future unless there is good evidence to the contrary. The enterprise is viewed as a
going concern, that is, as continuing in operations, at least in the foreseeable future. In
other words, there is neither the intention nor the necessity to liquidate the particular
business venture in the predictable future.
 Accounting Period Concept
This concept requires that the life of the business should be divided into appropriate
segments for studying the financial results shown by the enterprise after each
segment. That is, financial statements are prepared at regular intervals e.g. every year,
every semester or term.
 Cost Concept
According to this concept an asset is ordinarily entered on the accounting records at

the price paid to acquire it. That is, assets are shown at their historic cost.
 The Matching concept
This concept is based on the accounting period concept. In reality we match revenues
and expenses during the accounting periods. Matching is the entire process of periodic
earnings measurement, often described as a process of matching expenses with
revenues. In other words, income made by the enterprise during a period can be
measured only when the revenue earned during a period is compared with the
expenditure incurred for earning that revenue.
 Realization Concept
As accounting principle, it is used to identify precisely the amount of revenue to be

recognized and the amount of expense to be matched to such revenue for the purpose
of income measurement. According to realization concept revenue is recognized when
sale is made.
 The accruals concept
The accruals concept says that net profit is the difference between revenues and the
expenses incurred in generating those revenues.

2.1.9 Theoretical review
Accounting and accounting information nature, scope and purpose of

management accounting
Drury (2000) reported that the nature of management accounting is to provide

information that links the daily actions of managers to the strategic objectives of an
organization. In addition, this information should enable managers to effectively be
involved in the entire extended enterprise of customers, suppliers, dealers, and
recyclers in achieving the strategic objectives. Furthermore, management accounting
takes a long-term view of organizational strategies and actions.
Meanwhile, the scope of management accounting systems is to report the results of

operations using financial and non-financial measures. Its purpose is to help the
organization to reach its key strategic objectives. It can also note the key differences
between management accounting information which is primarily for internal purposes
and helps managers to make decision and financial accounting which provides
information to parties outside the organization (Drury, 2000).
ACCOUNTING AS AN INFORMATION SYSTEM
According to Collier (2003, p. 4) accounting is a collection of systems and processes

used to record, report, and interpret an economic entity's business transactions, which
provides in financial terms an explanation or report about the transactions of an
organization. That can be simply described, as the process of recognizing, evaluating
and communicating information to allow informed judgements and decisions by users
of the information.
This is to say that accounting information is valuable to those who need to make
decisions and plans about business and control the businesses. (Atrill, et al., 2014,p. 3)
Thus, the key aspects of accounting are identifying the key financial component of an
organization, measuring the monetary values of these to represent a true and fair
view of the organization, and communicating this financial information in a
way useful to the users of that information (Black, 2005, p. 2)

Figure 2.1: Accounting as an information system.
Action
Business Activities Decision Makers
Data
Information
Accounting
Measurement Processing
Communication
SOURCE: Islam Mohammed Olwan (2011)
2.2.1 QUALITATIVE CHARACTERISTICS OF ACCOUNTING

INFORMATION
According to IFRS (2003), identified the qualitative characteristics of accounting

information that distinguish better (more useful) information from inferior (less
useful) information for decision making purposes.
Relevance
Relevance is directly related to the concept of useful information. Relevance implies

that all those items of information should be reported, that may aid the users in
making decisions. In general, information that is given greater weight in decision
making is more relevant. Specially, it is information’s capacity to make a difference
that identifies it as relevant to a decision.
Reliability
To be useful information must also reliable. Information has the quality of

reliability when it is free from material error and bias and can be depended upon by
users to represent faithfully that which it either purports to present or could reasonably
be expected to represent.

Comparability:
Information that measured and reported in a similar manner for different companies is
considered comparable, comparability enables users to identify the real similarities and
differences in economic events between companies and between the fiscal period and
other at the same economic entity and with other economic entities at the same
activity.
Verifiability:
Verifiability occurs when independent measures, using the same method, obtain
similar result, and access to the same results by more than one person, if we not use
the same techniques and methods that are used to measure the accounting information.
Timeliness:
Timeliness means having information available to decision makers before it loses its
capacity to influence decision; accounting information must be available at the right
time for the decision making process.
Understandability:
Understandability is enhanced when information is classified, characterized and

presented clearly and concisely, and it is the quality of information that lets reasonable
informed users sees its significance.
2.2.2 ACCOUNTING INFORMATION TOOLS
 Statements of Financial position (balance sheet)
The statement of financial position follows the basic accounting equation assets equal
liabilities plus owners' equity. The difference between what a company has and what
it owes equals equity, or net worth. A high net worth may indicate that a
company is relatively debt free, particularly if its owners' equity is higher, expressed
as a percentage of assets, than other companies in its industry.
 Statement of comprehensive income (income statement)
The statement of comprehensive income shows how much profit a company has
earned during a given period. The format includes a gross profit calculation, followed
by an operating income section. This produces operating income. Non-operating
income or losses, including one-time or special sources of revenue or expense, are
then added to derive net income. Gross profit is based on revenue minus the cost of
producing the goods or services that a company sells, called the cost of goods sold.

This shows how efficiently the company generates income from its production.
Operating income considers many other costs along with the cost of goods sold,
including overhead and depreciation on equipment. This is important in determining
the company's basic profitability, especially when compared to prior periods or to
other companies in its field. Growing operating income is a good sign. Special items
may positively or negatively affect a period's net income, but they are less likely to
affect long-term concerns.
 Cash Flow Statement
The statement of cash flows also reveals useful information when making investment
decisions. It shows the net change in the company's cash position during a given
period. In general, stable or growing cash flow means the company can cover its
short-term debt payments and expenses, while also keeping up with any long-term
debt obligations. You can also look over the structure of the cash flow to see how
much cash is generated from operating activities versus financing and investing. It is a
good sign when a company's cash from operating income routinely exceeds its net
income. This shows income is turning into cash. Typically, an effective cash position
is favor able in an investment because it shows less risk of loan defaults or
bankruptcy.
 Statements retained earnings:
The statement of retained earning presents the changes in a company's or

organization’s retained earnings over a specific period of time. These statements show
the beginning and final balance of retained earnings, as well as any adjustments to the
balance that occur during the reporting period. This information is sometimes included
as part of the balance sheet or it may be combined with an income statement.
However, it is frequently provided as a completely separate statement.
 Statement of Owners' Equity
The statement of owners' equity isolates the equity section of the balance sheet. Its
primary purpose is to show the trend in retained earnings for the company. Retained
earnings are accumulated profits not paid out in dividends. This is useful in
investment decisions because higher retained earnings relative to dividends means you
get less dividend income. However, this often means the company is looking to grow
and is holding onto income for reinvestment versus paying it out in the near term.
 Statement of Accounting Policies
The statement of accounting policies comprises specific policies and procedures used
by a company to prepare its financial statements. These include any methods,

measurement systems and procedures for presenting disclosures. Accounting policies

differ from accounting principles in that the principles are the rules and the policies
are a company's way of adhering to the rules.
 Notes on the accounts
The notes to the accounts are a series of notes that are referred to in the main body of
the financial statements. The notes give further details on the numbers given in the
accounts. The importance of these numbers should not be underestimated. The
accounts are not complete without the notes. Investors who rely on the main body of
the accounts and ignore the notes are likely to find themselves misled.
 The Auditor’s Reports:
The role of auditors has become increasingly important since audit was first made
compulsory under the companies and Allied Matters Act (CAMA 2004) as amended.
An audit must be carried out by accountants belonging to a recognized body by the
department of trade; auditors are guiding the presentation of accounts
not only by the legal requirements as confirmed by
 Recommendation of accounting principles and
 Statement of standard accounting principles (SSAP) One

of the first tasks of any user of financial report write R. G May, G. G Mueller
and T. H. Williams (1995) is to check to see that the auditors have not qualified
their approval in any way. The reports and the accounts must be sent to all their
shareholders and holders of the debentures and loan stocks not less than 21
days before the annual general meeting (AGM). A copy must be lodged with
the registrar of companies not more than 7 months after the company’s
financial year ends. Auditing standard paragraph 6 “the auditors’ operational
standard” 1st April 1990, the auditing practices committee (APC), auditing
guidelines on review of financial statement states that: The auditors should
carry out a review of the financial statement as in conjunction with the
conclusions drawn from the audit evidence obtained, is sufficient to give him a
reasonable basis for his opinion in the financial statement.
2.2.3 USERS OF ACCOUNTING INFORMATION
1. Internal users:
Parties inside the reporting entity or company who are interested in accounting
information
Types of internal users include:

2. Management:
Management in every level of the business from director level to supervisor level
relies on accounting information to do their job properly. They all use the same
information for different purposes. For example, directors use it for strategic purposes
and middle management can use it to see if they are meeting their financial targets.
3. Investors:
Investors generally provide money to individual or organization to start a business.

Before investing money investors generally want to know whether they should invest
or not or if they would invest to start a business now then how much return they will
get from their investment. The investors will decide based on the financial accounting
information of that business.
4. Employers:
Employers use accounting information for their own benefit, accounting information
help the employee to ensure their future benefit from the company like pension, health
provision, retirement benefit etc.
5. Owners:
Business owners want to know whether their funds are being properly used or not.
Accounting information helps them to know the profitability and the financial position
of the concern in which they have invested their funds.
External users:
Parties outside the reporting entity or company who are interested in the accounting
information
Types of external users include:
1. Shareholders:
Shareholders use the balance sheet and profit and loss account produced by limited
companies to decide if they are going to increase or decrease their holding.
2. Creditors:
Creditors (lenders) are generally focused on the information which is related to the
borrower before making a large loan such as the Bank (creditors) will want
information about the borrower regarding some criteria: the ability of the borrower to
repay the loan, the amount of assets and liabilities of the borrower, evidence of

income, tax policies and so on. The creditors will make the loan after having this
detail information through financial accounting statement of the borrower.
3. Government Regulatory Agencies:
Government regulatory agencies like Federal and State Government Agencies and
Security and exchange commission want financial accounting information which is
related to the investors, business organization or any individuals, these regulatory
agencies want the information to know that whether the business organization are
following the business rules and regulation or not or whether the investors are able to
invest or make decision or not, Security and exchange commission want accounting
information to evaluate the financial accounting disclosures of companies who sell
their share or borrow money.
4. Taxing authority:
Taxing authority wants financial accounting information related to tax policies, tax
laws, amount of payable tax etc. from the individual or organization., taxing authority
wants financial accounting to know that the business organization are following tax
rules or not and their ability to pay income tax because income tax is based on the
financial accounting reports.
5. Labor unions:
Labor unions want accounting information to know their future salary.
6. Suppliers:
Suppliers want to know about company‘s future goals so that they can serve best
material in coming days.
7. Customers:
Sometimes customer also want to know about company on issues like warranty,
product development etc.
2.2.4 MANAGEMENT DECISION MAKING LEVELS
Decision making can also be classified into three categories based on the level at
which they occur.
 Strategic:
Strategic decisions set the course of organization they are the highest level; here a
decision concerns general direction, long term goals, philosophies and values. These

decisions are the least structured and most imaginative; they are the riskiest and of the
most uncertain outcome.
 Tactical:
Tactical decisions are decisions about how things will get done, they support strategic
decisions, and Tactical decisions are decisions about how things will get done. They
tend to be medium range, medium significance, with moderate consequences.
 Operational:
Operational decisions are decisions that employees make each day to run the
organization, used to support tactical decisions; they are often made with little thought
and are structured, their impact is immediate, short term, short range, and usually low
cost. The consequences of a bad operational decision will be minimal, although a
series of bad or sloppy operational decisions can cause harm. Operational decisions
can be preprogrammed and pre-made.
2.2.5 SHORT TERM DECISIONS AND LONG TERM DECISIONS
Horngren et al (2002) stated that decisions can be grouped into short and long term
decisions. It is necessary to consider decisions from both
perspectives. According to Langley et al (1995), the short-term is usually defined as
being one year or even less. In short term decisions, the importance of the time value
of money is low. These decisions are mainly based on current or today’s data. Short
term decisions can usually be changed easily as opposed to long term ones. Long-
term decisions have effects on longer periods of time. Consequently, such
decisions demand a firm’s resources for a longer period of time. Such decisions can
influence future decisions and can have an impact on long-term potentials. Examples
might be capital investments, such as the purchase of new machinery.
2.2.6 DECISION MAKING PROCESS
Drury (2008) describes the decision-making process, visualized in Figure 7, as

comprising of five stages which belong to the decision-making (or planning) process,
followed by two final stages which represent the control process.
First: Identifying a problem or opportunity:
The first step towards a decision making process is to define the problem. Obviously,
there would be no need to make a decision without having a problem. So, the first
thing one has to do is to state the underlying problem that has to be solved.

You also have to clearly state the outcome or goal that you desire after you have made
the decision, because stating your goals would help you in clarifying your thoughts.
Second: Gathering information:
This is knowledge about the decision the effects of its options, the probability of each
options, and gathering the relevant information and excludes not relevant information
to the decision; too much information can actually reduce the quality of a decision.
Third: Analyzing the situation:
Determine the alternative courses of action may be available to decision maker and
determine the different interpretations of the data; the Problem Solving Activity uses a
set of structured questions to encourage both broad and deep analysis of your situation
or problem.
Fourth: Developing options:
These are the alternatives one has to choose from, generate several possible options,
be creative and positive, merely searching for preexisting alternatives will result in
less effective decision making.
Fifth: Evaluating alternatives:
Determine the criteria that should use to evaluate the alternative; these criteria are the
characteristics or requirements that each alternative must possess to a greater or lesser
extent. Usually the alternatives are rated on how well they possess each criterion.
Sixth: Selecting a preferred alternative:
Explore the preferred alternative for future possible adverse consequences; determine
the problems might the preferred alternative create and the risk of making this
decision this is the stage where the hard work.
The evaluation process would help you in looking at the available options clearly and
you have to pick which you think is the most applicable and appropriate.
Seventh: Acting on the decision and implement:
Put a plan to implement the decision and allocated the resources that needed to
implement the decision, the next obvious step after choosing an option would be
implementing the solution (decision), Just making the decision would not give the
result, you have to evaluate the decision you have made and know the implications of
making the decision, this is very essential for the decision to give successful
results.

Figure2.2 Decision Making Process
SOURCE: Research survey 2018
2.2.7 TYPES OF DECISION MAKING
Rational decision making:
This model has the advantages that you are unlikely to miss alternatives or important
goals or criteria. It is also clear how the decision was reached and can be reviewed by
other independent parties.
The drawbacks of this model the selection criteria might be incomplete and the
weightings used may be inaccurate and may be doing not fully address the things you
really care about.
Bounded rationality decision making:
Is the idea that in decision making, rationality of individuals is limited by the

information they have, the cognitive limitations of their minds, and the finite amount
of time they have to make decisions.

Another way to look at bounded rationality is that, because decision-makers lack the
ability and resources to arrive at the optimal solution, they instead apply their
rationality only after having greatly simplified the choices available.
Intuitive decision making:
To make a decision intuitively the person or group just goes with the option that
satisfies their emotional reactions to the alternatives.
The advantage of this type of model is that it is quick and it helps ensure that it takes
into account what you really care about. Because you have positive feelings about the
decision you will be well motivated to carry it out.
Intuitive decisions can have some serious drawbacks, you might not have fully
considered all the alternatives and therefore have missed an even better solution, and
you might also have based the decision on inaccurate or incomplete information.
Creative decision making:
In this type Solutions to the problem are not clear and new solution need to be
generated and you have time to immerse yourself in the issues.

CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter describes the statistical methods used in analyzing the data
obtained during the course of this study and the relevant interpretation for the
statistical output, and this interpretation was used to determine the nature of
relationship that exist between the dependent and independent variables. The variables
considered by this study are accounting information and management decision making
process. Which were represented by qualitative characteristics of accounting
information
This chapter comprises of the area of the study, research design, study variable,
population of the study, sampling techniques, sample size, sources of data, method of
data collection, study variables, method of data analysis and model specification.
3.1.1 AREA OF THE STUDY
The area of study for this research work is Douala, this area was chosen because this
is where Akwa headquarters is found and also because it is where there`s major
commercial activities. Douala is located in the Littoral region of the Cameroon
Republic.
3.1.2 RESEARCH DESIGN

A research design is a plan, structure and strategy of investigation so conceived as to
obtain answers to research questions or problems (Kerlinger 1986). The research
designs used for this study are survey research design and cross sectional research
design. According to Sekaran & Bougie (2011) descriptive study is undertaken in
order to ascertain and be able to describe the characteristics of the variable of interest
in a situation. The survey research design was used because the study involved the
distribution of questionnaire to some selected respondents in the companies
considered by the study, while, the cross sectional design was used.
3.1.3 POPULATION OF THE STUDY

This is the set of people or entities to which findings are to be generalized. In

determination of the effects of accounting information on management decision
making, the study focused on 7 commercial organizations and 204 employees in
Akwa. Details of the company selected are available under the Sample Size/Sample
Technique section below;
3.1.4 SAMPLE SIZE AND SAMPLING TECHNIQUE

Sampling is the process of selecting a few from a bigger group to become the basis for
estimating or predicting the prevalence of an unknown piece of information, situation
or outcome regarding a bigger group. The sampling technique used for this study is
stratified sampling technique.
In this study the sample size was taken by putting into consideration the number of
departments existing in these organizations which made a total of 35 questionnaires
distributed to the employees and of which 5 make up the portion of questionnaires that
may not be returned by respondents.
Table 3.1 Sample Size
CATEGORY NUMBER NUMBER SELECTED

Top Management 9 5
Administrative & Finance 28 23
Head of Department/units 12 7
TOTAL 49 35
Source: UNICS plc Akwa Littoral administrative department (2021)
3.1.5 VALIDITY AND RELIABILITY
According to Mugenda and Mugenda (2003) validity is the significance of inferences

and their accuracy that are normally based on the results of a research. There was
assessed of the questionnaire to make sure it was understood by the respondents. The
questionnaire was verified for content validity by discussing with two random
participants.
Reliability refers to consistency of a set of measurement items (Hair, Bush & Ordinal,
2000). Reliability is the uniformity of one’s measurement, or it can also be the degree
of measurement of an instrument to which an instrument when subjected to the same
conditions using similar objects. The most common internal consistency measure will
be used i.e. Cronbach’s Alpha (α). It helps in giving indications of the degree to which

items can be treated as measuring one variable (Cronbach, 1951). A cut-off value of
0.7 was the bench-mark as it is the recommended value for reliabilities. Thirty-five
questionnaires were given participants and then analyzed using SPSS version 24
software.
3.1.6 SOURCE AND METHOD OF DATA COLLECTION TECHNIQUES
Data are facts or observation about a physical phenomenon or a business transaction.

They are objective measurement of attributes (characteristics) of entities such as
people, place, things and events (Wiley, 2004).
There are many types of data on the basis of several classification criteria. On the
basis of the source, data can be classified as either primary or secondary data. The
research used both primary and secondary data
 Primary data
According to Kothari (2008) primary data are information gathered directly from
respondents. The researcher gathered primary data directly from respondents through
observations and questionnaires. Thus, they appear to be original in character, they are
needed because the information obtained relate to what is currently being researched
(Kothari, 2008)
 Questionnaire
According to Kothari (2008) a questionnaire is defined as a set of pre-formulated

questions to which respondents fill out by recording their answers. It can be also
defined as the series of questions which providing a number of alternative answers
from which respondents can choose. The questions were divided into two types.
Section captured personal information ofthe respondent, while section B captured
information which addressed the research questions.
These questionnaires were delivered by hand to the respondents at their workplace.

They were collect after one week so that there was enough time to answer the
questions.
 Observation
This is a systematic way of recording, describing, interpreting and analyzing people’s

behavior, perception and attitude. This observation was planned to ensure validity and
reliability of data.

So, the observation was used by the researcher to observe at the same time participate
fully in different activities of Akwa organizations. The researcher carried out the
observation on accounting information of Akwa organization to know how they could
influence the managerial decisions.
 Secondary Data
Krisluzaswami and Ranagnathan (2006), define secondary data as data that is already
available in the public domain and includes both raw data and published summary.
They also categorize secondary data into three main subgroups documentary data,
survey based data, and compiled from multiple sources.
In conducting this research, mass media was used like newspaper, magazine, internet,
publication, journals.
3.1.7 METHOD OF DATA ANALYSIS
Descriptive statistics were used to analyze the data that was collected i.e. (mean and
standard deviation) and regression model. All this played an important role in helping
to draw inferences on the relationship that exists between study variables. Regression
and correlation analysis was included to represent inferential statistics. The researcher
used statistical package for social sciences (SPSS) when analyzing the information
which helped in determining and testing regression and correlation between dependent
and independent variables.
Test of correlation was done to test the strength and association between the
dependent and independent variables. Regression analysis included fit of the model,
Analysis of Variance (ANOVA) and Regression of Coefficients.
Fit of the model was construed by assessing R Square to assess the extent to which the
independent variable (Accounting Information Quality) explained the dependent
variable (Decision Making).

CHAPTER FOUR
FINDINGS, PRESENTATION AND DISCUSSION
4.1 Introduction
This chapter presents the analysis of answers to the questions in the questionnaires
administered to the respondents. The use of table and charts will be adopted to clearly
show the responses obtained in each question of the questionnaires and the research
hypothesis from chapter one will be used to test hypothesis guiding the study through
the use of percentages and fit of the model.
4.1.1 THE RESPONSE RATE
A response rate of 89% was obtained. This rate translates to 89% of the total
respondents. According to Babbie (2004) response rates of 50% are acceptable, 60%
is good and above 70% is very good analyze and publish. The study response rate was
very good according to Babbie (2004) a standard which implies that this study
achieved a good response rate.
Table 4.1 Response Rate

Response Response %
Successful 31 89%
Unsuccessful 4 11%
Total 35 100%
Source: Research Survey (2021)
4.1.2 SAMPLE CHARACTERISTICS

The sample demographics on gender, age, education, work experience and duration in
the company were presented in this section.
Gender

The researcher also wanted to establish gender status of the respondents. Figure 4.1
presented these findings. Majority of the respondents were male who accounted for
65% while female respondents accounted for 35%. The findings show that this study
was a male dominated study.
Figure 4.1 Gender
respondent percent
35% male
female
65%
Age Range
Respondents aged between 36 - 45 years were 61%. Those aged between 46 – 55years
were 16% with those of 26 - 35 years were 16%. Above 55years respondents were
7%. The findings imply that the respondents were people who were relatively
advanced in age as they lay above 36 years as were at their career peaks.
Figure 4.2 Age Range
Respondent age range %
7%
36 - 45 years
16% 46 – 55years
26 - 35 years
55years +
16% 61%

Post Occupied
The researcher sought to find out the post occupied by the respondents. Figure 4.5
presented these findings. Majority of the respondents (32%) worked as accountant and
32% as others respectively while 23% of the respondents worked as head of
departments/units. The remaining 13% of the respondents worked as financial
controllers.
Figure 4.3 Post Occupied
Respondent post at UNICS plc
13%
accountant
32% others
head of departments/units
23% financial controllers
32%

Educational Level
The researcher sought to find out the highest achieved education level of the
respondents. Figure 4.4 presented these findings. (48%) of the respondents, who were
the majority had attained a bachelor’s degree on the other hand, 26% of the
respondents had attained a master degree. 19% of the respondents had attained other
qualifications while 7% had attained an advanced level as their highest attained level
of education. From the findings, the respondents were well informed as majority had
attained higher education hence were informed individuals who would make rational
decisions in terms of being accurate in answering the research questions as they were
well versed with the environment within which their organizations operated in.
Figure 4.4 Educational Levels

Respondent Edu Level %

7%
bachelor’s degree
master degree
19% other qualifications
48% advanced level
26%
Longevity in service
Figure 4.5 represents longevity in service of the respondents that the researcher sought
to find. 39% of the respondents had worked in the firm between 7 – 11years while
32% of the respondents had worked for above 11years. 19% of the respondents had
worked between 3 - 6years and 10% had worked for below 3years. The findings
indicate that most participants had extensive experience and hence were adequately
appropriate to take part in this study.
Figure 4.5 Longevity in service
Respondent Edu Level %
10%
7 – 11years
11years
19% 39% 3 - 6years
3years
32%
4.1.3 TEST OF HYPOTHESIS
ACCOUNTING INFORMATION AND DECISION MAKING

This section presents descriptive results and discussion of the predictor and dependent

variables.
4.1.4 HYPOTHESIS ONE
Ho: Proper use of accounting information does not help business organizations in
making efficient and effective decisions.
Information Reliability and Decision Making

Statements Strongly Disagree Neutral Agree Strongly Mean Standard
Disagree Agree Deviation
Accounting
systems 0% 0% 3,2 % 16,1 % 80,6 % 4,7742 ,49730
displays
elements of
Completeness
Faithful 0% 0% 6,5 % 71,0 % 22,6 % 4,1613 ,52261

Representation
Accounting
information 0% 0% 0% 38,7 % 61,3 % 4,6129 ,49514
are verifiable
Average 4,51613 0,50502
The researcher sought to study the effect of reliability of accounting information on

decision making. The findings were presented in Table 4.2. About eighty-one percent
(80.6 %) of the respondents strongly agreed that Accounting systems displays
elements of completeness. 71,0 % of the respondents agreed that financial information
was faithfully represented and this is key in the decision making process 61.3 % of the
respondents agreed that accounting information used by management in decision
making in the UNICS plc is verifiable. The overall mean was 4.5 with a standard
deviation of 0.51. The findings imply that information reliability is a key determinant
of decision making.
Table 4.2 Information Reliability and Decision Making


Management Decision Making Process: Case study;
UNICS Plc. Akwa, Littoral
4.1.5 HYPOTHESIS TWO
H1: Proper use of accounting information help business organizations in making

efficient and effective decisions.
Information Comparability and Decision Making
The researcher sought to study the effect of comparability of accounting information

on decision making. Table 4.3 below presented the findings. 41, 9 % who were the
majority strongly agreed that financial statements of one accounting period are
comparable to another and this helped users to derive meaningful conclusions. A 100
% of the respondents strongly agreed accounting information makes it easy for users
to choose between alternatives. 29, 0 % of the respondents both strongly agreed and
agreed that users of financial information were able to compare financial reports
generated in different periods. The overall mean was 4.3 with a standard deviation of
0.64. The findings imply that information comparability is an important determinant
of decision making.
Table 4.3 Information Comparability and Decision Making

Accounting
periods are 0% 0% 25,8 % 32,3 % 41,9 % 4,1613 ,82044
Comparable
Easy for
Users 0% 0% 0% 0% 100,0 % 5,0000 ,00000
Users are
Able to
compare
financial 0% 19,4 % 22,6 % 29,0 % 29,0 % 3,6774 1,10716
reports
Average 4,27957 0,64233

Written and Presented by Tanyi Patricia Page 33

Decision Making at UNICS plc

The findings were presented in Table 4.4. About fifty-five percent (54,8 %) of the
respondents strongly agreed that Information needed for decision making are extracted
from accounting information systems. Sixty-four percent (64 %) of the respondents
were neutral about Management decision based on financial information emphasizes
the success of UNICS plc to meet their stated goals. 51,6 % of the respondents agreed
that there was a clear methodology designed on how decisions were undertaken in
attempt to address any concern in UNICS plc.
Table 4.4 Decision Making

Accounting
information 0% 0% 0% 45,2 % 54,8 % 4,5484 ,50588
systems
Financial
statements 0% 3,2 % 64,5 % 22,6 % 9,7 % 3,3871 ,71542
emphasize
Source: research Survey (2021)
the success of
UNICS plc
Clear 0% 12,9 % 9,7 % 51,6 % 25,8 % 3,4839 1,02862
methodology
Average 3,80647 0,74997
4.1.6 PEARSON CORRELATION ANALYSIS

Pearson correlation analysis findings were presented in table 4.6. The correlation
existing between decision making and all the independent variables; reliability and
comparability was strong and positive (0.876, 0.583 respectively). All the predictor
variable; comparability, reliability was satisfactory with a significant level of 0.000
and 0.001.
Table 4.5 Pearson Correlation Analyses

Variables Decision Reliability Comparability
Making
Decision Making Pearson 1
Correlation
Sig. (2-tailed)
Reliability Pearson 0,876 1
Correlation
Sig. (2-tailed) 0,001
Comparability Pearson 0,583 0,876 1
Correlation
Sig. (2-tailed) 0,000 0,001
4.1.7 DISCUSSION OF FINDINGS
From the study sample characteristics results majority of the respondents (65 %) were
male while most respondents (61 %) of the respondents were aged between 36 to
45years. 32 % of the respondents worked as accountants and 48 % of the respondents
had attained a bachelor’s degree. Most respondents (64.1%) of the respondents had
worked in their respective department for 7 to 11years.
Reliability as a variable overall mean was 4.52 with a standard deviation of 0.51. The
findings imply that information reliability is an important determinant of decision
making. The correlation between reliability and decision making was strong and
positive (0,876). Regression results show that there is a positive relationship between
decision making and reliability (0.822) and that the variable was statistically
significant (0.000). These results indicated that an increase in reliability by one unit
leads to an increase in decision making by 0.822 units. The results further showed that
reliability was an important determinant of decision making. The findings are
consistent with those of Faith Gacheru (2015) who studied the effect of financial
accounting information quality on decision making and found that there was a positive
relationship reliability of information and decision making..
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction
The chapter gives a summary with major findings aligned to the objectives. A
conclusion on the relationship between the study variables was deduced in line with
the objectives. Suggestions for recommendations.
5.1.1 SUMMARY
The study general objective was to study the effect of accounting information on
decision making in UNICS plc, Douala-Cameroon.
The first objective was to study the effect of reliability of accounting information on
decision making in Akwa com. organizations. Results indicated that reliability was
important in determining decision making in UNICS plc. This was supported by
majority of the respondents who strongly agreed that that information generated from
accounting systems displayed an element of completeness, Accounting information
are verifiable and this is key in the decision making process and agreed that financial
information was faithfully represented.
According to correlation results, there was a strong, positive and statistically
significant association between reliability and decision making. There is also a
positive relationship between reliability and decision making in Akwa com.
Organizations according to the regression results.
The second objective was to assess the comparability of financial accounting

information on decision making in UNICS plc Results indicated that comparability
was important in determining decision making in public benefit organizations in
Akwa. This was supported by majority of the respondents who strongly agreed that
Accounting periods are comparable, Accounting information make it easy for users to
choose between alternatives, Users are able to compare financial reports and help
users to derive meaningful conclusions, financial information made it easier for users
to choose between alternatives, and that users of financial information were able to
compare financial reports generated in different periods.
According to correlation results, there was a strong and positive association between
the comparability and decision making and this was statistically significant. There is
also existence of a positive relationship between comparability and decision making
according to regression results.

5.1.2 RECOMMENDATIONS
 Through this study the researcher recommended the following specific task as a
way of insuring that accounting information is important in management to
make decisions.
 From the study findings, the researcher recommends that the management puts
in measures to improve both quantitative and qualitative characteristics of
financial statements so that they are easily comparable to other industries.
 All systems have to be computerized and modern speed system network should
be established so that the information could reach the accounting department
time. The management should also train its workers on the accounting package
for quick and efficient accounting records
 The management should ensure that all staff in the administrative and finance
department is well trained. Sufficient funds should be set aside to provide for
staff training in order to Increase their skills in comparing financial reports.
The staff in accounting department must be a holder of any professional degree
such as Advanced Diploma, Degree, Masters and Certified Public Accountant
(CPA).
 Qualified and capable personnel should be employed for accounting

information preparation and presentation.
 Monitoring and control actions should be enhanced in the decision making

process on specific decisions according to the stipulated processes associated
so that desired goals are achieved in improving the functionality and
performance of the organization.
 The researcher recommends that there should be a clear methodology designed

on how decisions should be undertaken in an attempt to address any concern in
the organization
5.1.3 CONCLUSIONS

From the study findings, it can be concluded that accounting information reliability as
a characteristic on accounting information used by management in decision making in
Akwa com. Organizations was verifiable, financial information was faithfully
represented and had an element of completeness. It can further be concluded that
accounting information in Akwa com. Organizations Cameroon was characterized by
reliability and this reliability was a key predictor of decision making in UNICS plc.
It can also be concluded that accounting information comparability as a characteristic

depended on whether financial statements of one accounting period are comparable to
another, whether financial information made it easier for users to choose between
alternatives and whether the Users of accounting information are able to compare
financial reports generated in different periods. Further, accounting information in
UNICS plc Douala Cameroon had adequate comparability characteristics and this
comparability was a key determinant of decision making in Akwa com. organizations.
5.1.4 References

 Anil Keimer (2008), “Uses of Accounting and Limitation of Financial

Accounting”, Gupta Platinum Ezine Articles.
 Arnold and Hope (1990), “Accounting for Environmental Decision making”,

www.imanet.org
 Boockholdt, J., (1999), “Accounting Information Systems, Transaction

Processing and Control”, Mac-Graw-Hill
 Chenall, R.H. and Morris, D.(1986), “The impact of Structure, Environment

and Interdependence of Perceived Usefulness of Management Accounting
System”, The
 Accounting Review, Vol.61, pp. 16-35.
 Choe, J.M. (1998), “The Effects of User Participation on design of Accounting

Information System”,Information and Management, Vol. 34, pp.185-198
 Chong, V. (1996), “Management Accounting Systems, Task, Uncertainty and

Managerial Performance: A Research Note”,Accounting Organisation Society,
Vol. 21 pp. 430-514.
 Christianson, J.K. and Mouritsen, J. (1994), “Information Resource

management: A Critical Analysis of new Intellectual Technology.”
Proceedings from The Second European conference on Information Systems,
30–31 May, Breukelen, The Netherlands, Nijenrode University Press.
 Douglas, R. and Carichael, R.W. (2007), “Accountants”Handbook: Accounting

Policies” ,Business and Economics, 1056.
 Essex, P.A. and Magal, S.R. (1998), “Determinants of Information Centre

success”,
 Journal of Management Information Systems, Vol. 15, No.2, pp. 95-117.
 Gray (1996), “Accounting will only be relevant in 356868 ”, .
 Huber, G. (1990), “A Theory of the Effects of Advanced Information

Technologies on Organisational Design, Intelligence and Decision making”,
Academy Management Review, Vol. 15, p . 47 –71.
 Ives, B. (1983), “The Measurement of User Information Satisfaction”,

Communications of ACM, Vol.26, No. 10 pp. 785 –793.

 Kim, K. (1999), “Organizational Coordination and Performance in Hospital

Accounting Information System: An Empirical Investigation”, The Accounting
Review, Vol. 6, pp. 85-99.
 Kren, L. (1992), “Budgetary Participation and Management Performance: The

Impact of Information and Environmental Volatility”, The Accounting Review,
Vol. 67, pp. 511 -525.
 Longe, O.A. and Kazeem, R.A. (1999), “Essential Book-keeping and

Accounts”, Ikeja Lagos, Tonad Publishers.
 Markus, M.L. and Pfeffer, J. (1983), “Power and the Design and
Implementation of accounting and Controlling Systems”, Accounting,
Organisation and Society, Vol. 8, No.2 –3, pp. 205 -218.
 Melissa, B. (2007), “Overview of Management Accounting”.
 Mia, L. and Chenhall, R.H. (1994), “The Usefulness of Management

Accounting Systems, Functional Differentiation and Managerial
Effectiveness”, Accounting Organisation Society, Vol. 19, pp. 1 –13
 Nicolaou, A. (2000), “A Contingency Model of Perceived effectiveness in

Accounting Information System: Organisational Coordination and Control
Effects”, International Journal of Accounting Information Systems, Vol. 1, pp.
91-105.
 Otley, D. (1980), “The Contingency Theory of Management Accounting:

Achievement and Prognosis”, Accounting Organisation and Society, Vol. 5, pp.
194 -208.
 PAT. (2002), “Accounting Standards volume II”, Somolu, Lagos.Simon, R.

(1987), “Accounting Control Systems and Business Strategy: An Empirical
Analysis”, Accounting Organisation Society, vol. 12.
APPENDICES

APPENDIX 1: QUESTIONNAIRE
I am Tanyi Patricia an undergraduate student pursuing a BBA in Accounting

and Finance in the Higher Institute of Science and Technology (HIST),
University of Douala. I am writing a research project which is a requirement for
the award of the Degree. The research topic is “The Impact of Accounting
Information on Management Decision Making Process”. I kindly request
your assistance by availing time to respond to the questionnaire. All data
collected will be treated in strict confidence and used only for purpose of this
study.
Your co-operation will be highly appreciated.
INSTRUCTION: Tick (√) the box with your appropriate answer and that best
describes the extent to which you agree with each of the statements afterward.
A. RESPONDENT’S PERSONAL INFORMATION AND SOCIAL ECONOMIC
PROFILES
Please indicate your gender
Male [ ] Female [ ]
1. Please indicate your age range
26-35 [ ] 36-45 [ ] 46-55 [ ] > 55 [ ]
2. Please indicate your occupation
……………………………………………………………………………………
…….
3. Please indicate your level of education
Advance Level [ ] Bachelors [ ] Masters [ ] Others [ ]
4. How long have you been in service?

<3 [ ] 03-06 [ ] 07-11 [ ] > 11 [ ]
The following subsections is concerned with assessing reliability and

comparability of accounting information, and its relationship with decision
making in UNICS plc.
Rate your response on a scale of 1 to 5;
(1= Strongly Disagree; 2= Disagree; 3= Neutral; 4= Agree; 5= Strongly Agree)
A. RELIABILITY OF ACCOUNTING INFORMATION AND DECISION
MAKING
NO. STATEMENTS 1 2 3 4 5
6. Information generated from accounting Systems disp
lays an element of completeness and this helps in dec
ision making.
7. Financial information is faithfully represented and thi
s is
Key in the decision making process.
8. Accounting information used by management in d
ecision
making is verifiable
B. COMPARABILITY OF ACCOUNTING INFORMATION AND

DECISION
MAKING
9. Financial statements of one accounting period
are comparable to
another and this help users to derive
meaningful conclusions.
10. Accounting information make it easy for users to
choose between alternatives.

11. Users of accounting information
are able to compare financial reports
generated in different periods.
C. DECISION MAKING
12. Information needed for decision making are extra
cted from accounting information systems.
13. Management decision based on financial informat
ion emphasizes the success of UNICS
plc to meet their stated goals.
14. There is a clear methodology designed on how
decisions are undertaken in an attempt to address
any concern in UNICS plc.
THANK YOU


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The Impact of Accounting Information on

Management Decision Making Process in an

A RESEARCH PROJECT SUBMITTED IN PARTIAL

FULFILMENT OF THE REQUIREMENTS FOR THE

AWARD OF A BACHALORS DGREE IN

Written and Presented by Tanyi Patricia B. Page i

Supervisor: Mr. MBAH NELSON ZHEA

Signed: ……………………… Date …………………………

Written and Presented by Tanyi Patricia B. Page ii

Written and Presented by Tanyi Patricia B. Page iii

Written and Presented by Tanyi Patricia B. Page iv

Keywords: information systems, accounting information, accounting information

Written and Presented by Tanyi Patricia B. Page v

Written and Presented by Tanyi Patricia B. Page vi

CHAPTER ONE: INTRODUCTION……………………………………………………... 1

CHAPTER TWO: LITERATURE REVIEW……………………………………………..7

Written and Presented by Tanyi Patricia B. Page vii

2.2.7 TYPES OF DECISION MAKING

CHAPTER THREE: RESEARCH METHODOLOGY…………………………………23

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION OF

CHAPTER FIVE: SUGGESTIONS AND CONCLUSION……………………………...35

Written and Presented by Tanyi Patricia B. Page viii

The making of decision, as everyone knows from personal experience is a

Written and Presented by Tanyi Patricia B. Page 1

Decision making is the process of choosing alternative courses of action using

The making of decision, as everyone knows from personal experience is a

Accounting information also aids lending or dividend decisions as number of common

Written and Presented by Tanyi Patricia B. Page 2

1.2 Statement of the problem

1.3 Research questions

Written and Presented by Tanyi Patricia B. Page 3

Does proper use of accounting information helps the commercial organization in

Does accounting information affect the commercial organization positively or

1.4 Objective of the study

 To know the value of accounting information in decisions made in an

 To make suggestions that will enhance or promote the effective use of

 To find the causes of failure in the attainment of organization objective, as a

1.5 Statement of hypothesis

H1: Alternative Hypothesis

H1: Proper use of accounting information help business organizations in making

1.6 Significance of the study

Written and Presented by Tanyi Patricia B. Page 4

profitability of the organization as well as ensuring its continuity as a business

 This research study will help us to know the beneficiaries of accounting

1.7 Scope & limitation of the study

The confidential nature of accounting information in the business organization posed

1.8 Rationale of the research

Written and Presented by Tanyi Patricia B. Page 5

 Management: The financial information helps them to analyze the

Written and Presented by Tanyi Patricia B. Page 6

2.1 Conceptual framework

2.1.1 What is accounting?

According to Fess and Niswonger, accounting is the process of identifying, measuring

2.1.2 What is accounting information system?

2.1.3 What is accounting information?

Written and Presented by Tanyi Patricia B. Page 7

All quantitative and non-quantitative information that concern with the

2.1.4 What are financial statements?

Patricia's Project 1

Patricia's Project 1

Patricia's Project 1