CHAPTER ONE

1.0 INTRODUCTION

Business accounting is the representation of systematically developed and accurately recorded

financial reports about an entity engaged in economic activity to users of such reports. An

organization carries out a lot of activities, some are quantifiable monetarily while others are not,

and some officers are responsible for some activities while others play subordinate roles. At the

end of a period, every member of the organization and those non-members that are connected in

one way or the other want to know the summary of the events that have taken place for that

period to enable them determine (i) Whether the organization is worth associating with (ii)

whether to still continue with the organization or reduce involvement with the business.

Accounting can simply be described as the act of recording, analyzing, summarizing, interpreting

and communicating the effect of the financial statement to enable the users to make assessment

on it. Financial accounting has a lot of effects on the management of a business, hence for an

organization to succeed at the end of the year, it depends on the financial accounting information

of the business. The financial transactions are recorded sequentially as they occur individually.

Similar transactions are grouped or recorded together in what is known as an account or ledger

Account, I.e. expenses of the of the same nature are recorded under its major expenses heading

while assets of like manner are also grouped together.

Accounting information are those information generated from the business transaction of the

organization. They could be daily, weekly, monthly, bi-annually or yearly information. In other

words, they are those accounting statements prepared from the organization's records either for

the management or the public at large or for both.

1.1 BACKGROUND OF THE STUDY

Financial accounting information is often said to be language of business. It is used to access all

kinds of organizational financial accounting terms and ideas, therefore, are used by people

associated with business whether they are managers, owners, investors, bankers, lawyers or

accountants. Financial accounting covers those activities related to the preparation of certain

reports which are known as financial statements. These statement reports the financial status of a

firm at particular time, the firms activities and resulting profits or losses during the most recent

period and the flow of resources occurring within the same period.

The actual record making phase of accounting is called book keeping. However, financial

accounting is concerned with use to which these records are put, their analysis and interpretation.

An accountant should be concerned with more than the record making phase. In essence, he

should study the various alternatives open to the firm and be using his accounting experience in

order to aid the management to select the best plan for the firm.
The management of a business is influenced by things among which is the financial account

reports. The impact of financial information on the management of any business whether such a

business is large or small cannot be over looked. The extent of such impact may not be the same

for every business but the researcher believes that no business escape such an impact. There are

two main questions that the managers or owners of a business want answers to. Is the firm

operating at a profit or loss? And will the firm be able to meet both its short term and long term

obligations as they fall due? The two questions above use the information generated by the

financial accounts of the firm.

1.2 STATEMENT OF PROBLEM

Not everyone understands the significant role played by the financial accounting information on

the management of their business. Some manage their business intuitively. Others, like traffic

defaulters who disobey road signs, disobey the warning given them by financial accounting

information end up in business or information which have impact on the management of

business. The combination of these sources makes the information system complex in nature.

Accounting, on its own, does not form the management control system rather it is a part of it.

But accounting information is the only system through which both mangers and external users

get a picture of the organization as a total entity.

Moreover, financial accounting information usually comes in a disguised form by wearing the

cloak of technicalities, such

Technicalities include calculations, which need expert knowledge form of interpretation. But

some business, due to low financial layout cannot employ such experts and as such tend to

ignore financial accounting information. These accounting information are prepared in a

summarized form in order not to put the users off with all forms of detailed calculations and or

comprehensive analysis.

Financial accounting is an information system which has an impact on the management of any

business, whether such business is on large, medium or small scale. But the problem is do all

businessmen know this? This the researcher seeks to discover.

1.3 OBJECTIVE OF THE STUDY

For any research project undertaken to achieve its desired value, it must aim at a particular

purpose. Now that the problem has been identified, the principal objectives of this study can be

stated as follows:

a. To find out whether financial accounting information has any significant role to play in

the management of business.

b. To examine the influence of financial accounting information on the profitability and

success of the business.

c. To reveal other vital areas of research that will assist the accounting professional in

ensuring that the communication gap between accountants and the users of accounting

information is narrowed down as much as possible.

d. To provide local literature on the need for financial accounting information and to further

stimulate the research findings on this topic.

1.4 RESEARCH QUESTIONS

I. What are the users of accounting information?

II. What are the qualities of good accounting information that influence effective decision

making of MTN Nigeria?

III. What is the relationship between accounting information and decision making of MTN

Nigeria?

1.5 RESEARCH HYPOTHESIS

Hypotheses are simple set of assumptions about the problem statement in relation to the project

topic. For the purpose of this project work, the hypothesis can be stated as follows:

HYPOTHESIS 1

Ho: That financial accounting information has positive impact on the management of a business.

Hi: That financial accounting information has a negative impact on the management of a

business.
HYPOTHESIS 11

Ho: Accounting information is not an aid in the preparation of financial reports of a business.

Hi: Accounting information is an aid in the preparation of financial reports of a business.

1.6 SIGNIFICANCE OF THE STUDY

This study is significant in the following respects:

 It examines the impact of financial accounting as an information system.

 It provides useful facts to businessmen on the role played by accounting information on

the management of business.

 It advises managers of corporations, companies and any other form of business not to

neglect accounting information, since it serves as a bedrock to the success of any

business.

1.7 SCOPE OF THE STUDY

This work shall be limited to the significant role played by the use of financial accounting

information on the management of business. The researcher also intends to limit the study to a

selected company within Lagos municipality for a case study.

This is done for the purpose of minimizing time, costs, and other factors as it would not be

possible to conduct research on all companies in Nigeria. It is also assumed that the company

which has been taken as a case study reasonably represents every other business or organization.
1.8 OPERATIONAL DEFINITION OF TERMS

Financial Accounting: According to "Robert Igben (1999), it is the process of collecting

recording, presenting, analyzing and interpreting financial information for the uses of financial
statements.

Information: They can be refer to as being facts needed or received by a person or group of

persons which is or will be useful to such person or group of persons.

Management: This is the process of planning, organizing, leading and controlling the efforts of

an organizational members and resources to achieve stated organizational goals. (Stoner and

Wanked, 1998). It may also be defined as the process of getting things done through others

(many Parker Follet, 1920)

Business: This may be seen as the sum of total organizational efforts by which people engage in,

to provide the goods and services needed to maintain and improve the standard of living and

quality of life.
 CHAPTER TWO
LITERATURE REVIEW
2.1 CONCEPTUAL CLARIFICATION

Concept of Information

The dictionary of business and management defines information as "that which is attributed to
data by way of convention utilized in their representation." "Information is defined as data that
has been obtained, analyzed, or otherwise utilized for information or inference purposes, as well
as to supplement or serve as the foundation for forecasting and decision making." According to
the Encyclopedia of Professional Management, information must be separated from data, and
this difference is critical. Data are simply facts and numbers that have nothing to do with
decision making, whereas information is crucial raw material for decision making (Encyclopedia
for professional management: 2010). The network of organizational activities known as an
accounting information system is in charge of the information derived from data transactions for
internal reporting to management for use in planning and controlling present and future
operations, as well as external reporting to stockholders, the government, and other extended
users (Murdick, 2010).

Accounting Information

According to Scott (2012), accounting information is seen as a commodity that should ultimately
satisfy users (both internal and external). Before accounting information is acknowledged as
qualitative, there are a number of things to take into account, including relevance, dependability,
timeliness, correctness, comparability, and verifiability (Kargin, 2013). Relevance and
dependability are viewed by some writers as the most important components of accounting
information (Kargin, 2013; khanagha, 2011; Nayeri & Bidari, 2012; Scott, 2012). Furthermore,
Nayeri and Bidari (2012) argued that these two attributes (relevance and dependability) should
not be prioritized over one another because doing so would reduce the value of accounting
information for consumers. Since there are no criteria that can statistically describe relevance and
reliability, it is not possible to quantify them, leaving open for value relevance to combine the
two. Svenssor and Larsson (2009) held the opinion that relevance of values is really more
significant than conservatism and/or timeliness.
Accounting information is data that describes a utility account. In order to give external reporting
to third parties, including stockholders, investors, creditors, and government authorities, it
conducts financial transactions. Information that cannot be expressed in monetary terms is
known as non-accounting information, and it is used by investors to make investment decisions.
Investments of this kind are referred to as ethical investments. Making wise investment decisions
requires access to financial information, which will also help to address the issue of information
asymmetry between the firm's management and investors (Amahalu, Nweze, and Obi, 2017).
Accounting information needs to be accurate, thorough, and relevant in order for financial
reporting to be successful. The main goal of financial statements is to inform people, especially
investors, about a firm so they may make better decisions. (Meek and Germon 2001)
Additionally, it need to broaden users' knowledge and provide decision-makers with the ability
to forecast future behavior. Thus, it can be said that relevant accounting information is a
necessary prerequisite for the expansion of the stock market (Oyerinde, 2009).

Accounting information is data that may be found in a company's publicly available financial
accounts. Reports that include financial information might be released annually, biannually, or
quarterly (Olowolaju & Ogunsan, 2016). To many stakeholders, accounting information is of
utmost significance. Management uses them to increase efficiency, investors use them to make
investment choices, creditors use them to establish a debtor's creditworthiness, regulators use
them to gauge how well regulations are being followed, and the government uses them to make
tax and spending decisions (Olowolaju & Ogunsan, 2016, p.129). Accounting information is data
that may be found in a company's publicly available financial accounts. Reports that include
financial information might be released annually, biannually, or quarterly (Olowolaju &
Ogunsan, 2016). To many stakeholders, accounting information is of utmost significance.
Management uses them to increase efficiency, investors use them to make investment choices,
creditors use them to establish a debtor's creditworthiness, regulators use them to gauge how well
regulations are being followed, and the government uses them to make tax and spending
decisions (Olowolaju & Ogunsan, 2016).

Accounting information, according to Laura Chapman (2018), is data regarding the transactions
of a company entity. The activities that occur in corporate operations nearly always convert into
accounting information, from purchasing goods and machinery to engaging into long-term
building contracts. Accounting is a process of recognizing and documenting data and then using
it to produce relevant reports for a wide range of consumers. These users are divided into two
categories: internal users and external users. Accounting has two major views since the demands
of these customers are so diverse. Managerial accounting is a forward-thinking viewpoint aimed
towards internal users. Financial accounting is standardized for external users and is based on
previous data.

Accounting information is described as data pertaining to the transactions of a company firm.

Events in business operations nearly always convert into accounting information, from the time
merchandise and machinery are acquired until the time long-term building contracts are signed.
Accounting refers to the process of discovering and documenting data and then using it to make
relevant reports for various sorts of consumers, who are divided into two groups: internal users
and external users. According to Ahmed (2006), accounting information should have the
following essential features in order to fulfill its intended goals:

(i)Appropriateness: For accounting information to provide the desired benefit, it ought to be

appropriate for its purpose. Also, the appropriateness of accounting information is an essential
requirement for it to be used in assessing a company's administrative

(ii)Credibility: Accounting information must be significantly verifiable or objective based on

sufficient evidence; it should also be free from bias.

(iii)Accuracy: The failure to provide accurate accounting information makes it impossible for it
to be verified.

(iv)Timing: Timeliness is an important component to success in decision-making. Accounting

information may not yield any benefit, if the decision maker does not receive it at the right time.

(v)Understanding and Absorption: The impact that the accounting information creates on
administrative decisions depends on the extent of its understandability and absorption by the
management team. It has to be understandable, simple and meaningful even in the absence of
detailed data.

(vi)Importance: Accounting information performs its role well if it is considered important in

decision making-such that its neglect will create some problem.
(vii)Cost-benefit consideration and fulfillment: In order to meet the decision making needs,
accounting information should produce benefits that are greater than the cost of its preparation
and meet some expected standard.

Financial Accounting Information

All of the financial statements that have been made public serve to create quantifiable data
regarding the operation, development, and state of the company. Various stakeholders, including
shareholders, management, loan providers, creditors, financial analysts, and the government, are
served by these disclosures. The financial accounts, however, are primarily given to shareholders
so they may make wise judgments and decisions. The financial statements not only reveal the
management's stewardship to shareholders, but they also give both current and potential
shareholders or investors the necessary financial data to help them decide whether to purchase,
hold, or sell the shares of any listed firm of their choosing. Corporate bodies are required to give
information on their financial status, performance, and changes in financial position that is
beneficial to a wide variety of users in making economic decisions. The International Accounting
Standards Board (IASB) aims to develop an internationally acceptable set of high quality
financial reporting standards that depict the overall objectives and usefulness of financial
information to all users in order to ensure the desired relevance and reliability on financial
statements (Barth, Landsman & Lang, 2008). The financial statements of publicly traded
corporations may contain two types of accounting information: financial accounting information
and non-financial accounting information. Financial accounting information is often provided for
both internal and external users and is based on previous costs. Non-financial accounting
information may include predictions and management reports. Though nonfinancial accounting
information is used by investors in making investment decisions, traditional and rational
investors depend more on financial accounting information (Malhotra & Tandon, 2013).
Accounting Information's Value Relevance According to the American Accounting Association
(1966), accounting information must bear on or be constructively related with the action it is
supposed to support in order to fulfill the requirement of relevance. The power of the information
shown in financial statements to affect decisions of both potential and existing investors, whether
by modifying or confirming their expectations about the results of activities to be performed, is
therefore implied by relevance. Accounting information is value relevant, according to Scott
(2003), if it motivates investors to maintain or modify their views and behaviors; and in order to
be relevant, accounting information must, among other things, reach users on time. This
distinguishing attribute of timeliness stands out as a critical component of financial accounting
information relevance. Skinner (1997) provided three methods for measuring timeliness in his
contribution. The first method is to consider how the information is disclosed. This can include
management's voluntary disclosure of earnings forecasts, voluntary earnings preannouncement,
and mandated earnings announcement. According to Skinner (1997), the second technique to
determine timeliness is to compute the number of trading days between the end of the reporting
period and the reporting date. The third approach of determining timeliness is to examine a
company's own disclosure policy and compare reporting dates to past report dates. It should be
noted that creating dependable and correct information may take more time, but providing quick
or rushed information may make the information less reliable. As a result, an adequate balance
between timeliness and trustworthiness of financial accounting information must be reached
(Lehtinen, 2013).

Concept of Decision Making

Top management teams make strategic decisions, the quality of these decisions influence
organizational responsiveness and performance. Because consensus among stakeholder
facilitates the implementation of those decisions, consensus also influences employee
performance and organizational performance. Further, to sustain their ability to produce and
implement strategic decisions, top management teams must maintain positive affective
relationships among their organizational stakeholder. Thus, decision quality, consensus, and
affective acceptance are, together, all necessary for sustainable high performance of the
employees as well as the organization (Schweiger, Sandberg & Ragan, 1986).

Decision making can be defined as choosing between alternatives (Moorhead & Griffin, 1999). It
can be regarded as an outcome of mental processes (cognitive processes: memory, thinking,
evaluation) leading to the selection of a course of action among several alternatives. Decision
making involves mapping the likely consequences of decisions, working out the importance of
individual factors, and choosing the best course of action to take. (Muindi, 2011) The Decision
making is dynamic process, and there are many feedback loops in each of the phases. Feedback
loops can be caused by problems of timing, politics, disagreements among managers, inability to
identify an appropriate alternatives or to implement the solution, turnover of managers, or the
sudden appearance of a new alternative. The essential point is that decision making is a dynamic
process.

This dynamic process has both strategic and behavioural implications for the organizations.
Recent empirical research indicates that the decision making process that involves making the
right strategic choices does lead to success decisions for the organization. Leonard, Scholl, and
Kowalski (1999) argue that the decision-making is a fundamental function in organizations and
the quality of the decisions that managers make influences their effectiveness as managers, and
the effectiveness of managers, in turn affects the success or failure of the organization and also
these decisions very much affect employee and the organizational performance.

The effective implementation of a strategic decision requires the active cooperation of the team
members. To effectively usher a decision through this complex web of operational details, team
members must do much more than simply agree to or comply with the decision. They must both
understand and commit to the decision if it is to be implemented effectively and that will
enhance organizational performance through the individual/employee performance.

In order to increase the workers commitment and humanize the workplace with the intention of
improving work performance and good citizenship behaviour, managers need to permit a high
degree of stakeholder’s involvement. Thus, the involvement of stakeholder in decision making is
considered as a tool for inducing motivation and satisfaction in the workers leading to positive
work attitude and high productivity (Kuyea & Sulaimonb, 2011).

Factors Affecting Decision-Making Process in an Organization

Decision making is an essential part of study in cognitive psychology and organizational

management. Understanding the practice and procedures by which stakeholders make decisions
is vital to understanding the decisions they formulate. There are numerous factors that affect
decision making. Those factors have to do with historical experiences, cognitive biases, age and
individual differences, belief in personal importance, and an acceleration of commitment
(Dietrich, 2010). Psychologists and managers have developed several decision making
frameworks, which describe the course of action by which stakeholders efficiently make
decision. Past individual experiences and cultural values can influence future decision making.
Past decisions tend to influence the decisions stakeholders likely to make in the future.

There is the great chance that stakeholders could go back to some previous positive decisions
made in a comparable manner, given a similar condition. On the other hand, stakeholders have a
propensity to shun repeating past mistakes. This is significant to the extent that future decisions
made based on past experiences are not necessarily the best options. In addition to past
experiences, there are several cognitive biases that influence decision making. Cognitive biases
refer to thought patterns based on observations and generalizations that could cause memory
errors, imprecise decisions, and defective reasoning (Stanovich & West, 2008).

In decision making, cognitive sentiments put pressure on stakeholders by making them to

excessively lend more confidence in expected observations and preceding knowledge, while
disregarding information that are seemingly uncertain, devoid of looking at the comprehensive
picture.

Leadership role in decision making giving equal opportunity to stakeholders to contribute in

decision making process, recognize the various skills and expertise of various constituents is
important to the success of decision making. This has the capacity to create the necessary
psychological behaviour and motivation for optimum output. The world has transform into a
global system, therefore, the recognition of this serve as guide that organization must realize that
independence has largely replaced the olden philosophy of dependence and independence in
decision making process.

However, conflict of interest may affect interdependence which needs to be taken care of as well.
This will assist in forming strategic alliance to overcome several constraints in the organization.
As observed by Netting (2016) leaders of most organizations always tends towards Universalist
approach to overall all human problems everywhere they are; whereas an individual always has a
solution to his problem.

Therefore, striking a balance between universalism and particularism is key to the success of any
meaningful decision making process. Perpetuation of dominance in decision by leaders does no
help. Everyone has a specialism that can add quality to the learning environment. Looking down
on other stakeholders does help bring out the best ideas in them. Decision-making process
involves the existence of a decision problem which have be understood by the decision-making
stakeholders and correctly defined to unearth opportunities to resolve it. Quite a few hindrances
have been recognized in the way of a correct explanation of the problem which is the subject of
decision: paying interest and attention to effects and not to causes, selective sensitivity,
describing problems via solutions etc. (Cornescu, 2004). Based on the nature of Nigeria, copying
decision making frameworks from other environment without understanding the nature of the
local environment may not work.

Therefore, using a complex that takes care of most of the factors is necessary. A model that
incorporates the below characteristics will help significantly in achieving success in decision
making. The inputs consist of environmental factors, appropriate information,
knowledge/understanding, creative ideas of stakeholder group/team and ethical ideals.
Environmental dynamics/factors influence the decisions. Restriction and limitations in the
external environment, internal risks, particularly those associated with resources are taken into
cognizance.

Information gathered or had in possession, as well as past information, contemporary or

anticipated ones of the organization and of the external environment symbolize the initial point
in budding decision options in harmony with organization’s internal potentials.

The role of ethical principles is in refining the already gathered or accumulated knowledge of the
organization, teams and manager’s in the current context. The decision process entails as
submitted by Negulescu (2014) entails defining the problem, assembling required data,
recognizing/identifying the alternatives, finding agreement and selecting the alternative course of
actions, forecasting consequences/cost of the decision and finally executing it. Defining the
problem corresponds generally with the decision making though there are a sequence of disputes
concerning the disparity between solving a problem and decision-making method (FEMA,
2005). The comprehensible explanation of the problem assists the subsequent stages of the
practice. Information gathering presumes selecting that information which go with the most
excellent problem described and obtained from the classification inputs. Going on to recognize
alternatives is anchored on the background information accumulated. Choosing the most
appropriate state of affairs evaluated among the options identified is carried out engaging team
members and other stakeholders.
The communication with various stakeholders leads to both consensus and reduction of stress
and decision making timing. The outputs of the scheme or system could be: the management
accomplishment or failure, the knowledge of the organization in the managerial learning
practice, the team/stakeholder group strengthening, the values and beliefs of the organization.
Repeating the process by changing the alternatives in the event that the decision fails to meet the
objective of the overall stakeholders is necessary. Irrespective of whether stakeholder board of
the oil and gas industry is doing well or not in decision-making, organization has to achieve by
obtaining new or novel knowledge, by closing interactions within the group and by budding or
developing its values. A careful adherence to the above flow will create the most needed cultural
behaviour; reduce tensions, and understanding for achievement of the desired results.

Measures of Decision-Making Responsiveness

Responsiveness is yet another important characteristic of a sound stakeholder engagement

decision-making process. Transparency and interaction with stakeholders create the necessary
ingredient to making organization and stakeholders to become mutually responsive to each other.
Responsiveness to stakeholders’ shows that actors are really engaged and interwoven in various
innovative activities emanating from decisions arrived with organization and for society Kelleher
and Miller (2006) defined responsiveness as an organization willingness to respond promptly to
customer inquiries and complaint. Stromer-Galley (2000) described responsiveness as when the
receiver takes on the role of the sender and repliers in some way the original message source.
According to Davies (1982) responsiveness may be thought of as the probability to which each
partner responds to the other. The proportion of relevance responses and responses that match
the demand for appropriate elaboration that the speaker intended to elicit. Davies argued that
four factors affect responsiveness in an interaction; attention to the other partner, accuracy to
understand one another communication, possession of adequate response repertoires and
motivation to be responsive. The first factor contributes to one capacity for responsiveness, while
motivation is a choice that is affected by the reward of being responsive (Davies, 1982) Various
studies point to the important of responsiveness to the continuation of interaction. Kelleher and
Miller (2006) suggested responsiveness to be one of the organization relational maintenance
strategies. Davies and Holtgraves (1984) argued that as an dependence variable, responsiveness
has variety of consequences, both to the process and outcome of interaction as a process
responsiveness affects the maintenance of the interaction and the focus on particular topics,
communication efficiency and accuracy: as an outcome, it affect the degree to which goals are
achieved. Joyce and Kraut (2006) showed that receiving a response to an initial post in a
newsgroup increases the likelihood that the poster will post again; hence, responsiveness
encourage the continuation of an interaction and reinforce commitment.

2.2 THEORETICAL REVIEW

2.2.1 Contingency Theory

The main idea of contingency view is that there is no sole best way to solve a problem or do a
specific job. The best way depends on the situation. Contingency theory suggests that an
accounting information system should be designed in a flexible manner, such that it takes into
consideration the environment and organizational structure confronting an organization. It also
postulates that accounting information systems require to be adapted to the specific decisions
being considered ( Gordon & Miller,1976). In a related study, Gordon and Narayanan(1984)
found that environmental uncertainty is a fundamental driver for designing management
accounting systems among successful organizations. This study by Gordon and Narayanan(1984)
also found that as decision makers perceive greater environmental uncertainty, they tend to seek
more external, non-financial and ex ante information in addition to internal, financial and ex post
information. The contingency theory was first proposed by Fiedler in 1964 as managerial
leadership theory. According to Fiedler (1964) the contingency theory suggest that there is no
one best way of leading and that a leadership style that is effective in one situation may not be
successful in others. Gordon and Miller (1976) however laid out the basic framework for
considering accounting information systems from a contingency perspective where the
accounting information systems also need to be adaptive to the specific decisions being
considered within a framework. Contingency theory suggests that an accounting information
system need to be adapting to desired specific decisions while considering the environment and
organizational structure confronting an organization (Dandago and Rufai, 2014). Applying this
to the subject, contingency theory suggests that in order to improve performance, managers of
firms must devote particular attention to their use of accounting information system, taking care
to adopt the systems best tailored to their special circumstances. There are some criticisms of the
Fiedler’s contingency theory. However, one of the biggest criticisms of the contingency theory
that best relates to the study under review is lack of flexibility (Mitchell, Biglan, Oncken, and
Fiedler, 2017). Fiedler (1964) believed that because natural leadership style is fixed, the most
effective way to handle situations is to change the leader. The theory does not allow for
flexibility in leaders (Mind Tools, 2018). Relating this to the study indicates that managers will
incur more cost to change accounting information system that does not tender to their required
decision needs rather than carryout modifications. Resource-based view Theory The resource-
based view theory was propounded by Barney in 1991. According to Barney (1991) the
resource-based view avers that the source of sustainable advantage derives from doing things in a
superior manner; by developing superior capabilities and resources. The resource-based view
proffers a means of evaluating potential factors that can be deployed to confer a competitive
edge for business organizations. A key insight arising from the resource-based view is that not all
resources are of equal importance, nor do they possess the potential to become a source of
sustainable competitive advantage. The resource-based theory is divided into three levels;
capability, competence and skills. (Cragg, Caldeira and Ward, 2011). Capability refers to how
firms manage their resources; competence, refers to how well those resources are managed, and
skills are associated with ranges of skills such as technical, managerial and general management
skills. Accounting information systems also form part of resources available to firms. Inclining
the resource-based view theory with accounting information systems and performance will imply
that firms properly and adequately manage accounting information systems to utilize its
capability competence and skill sets for improved organizational performance. The resource-
based view theory has faced several criticisms. One of such criticism is that the theory lacks
substantial managerial implications or operational validity (Priem& Butler, 2001). It seems to tell
managers to develop and obtain valuable, rare, inimitable, and non-substitutable resources and
develop an appropriate organization, but it is silent on how this should be done (Connor, 2002;
Miller, 2003). (Lado, Boyd, Wright and Kroll, 2006) also argues the resource-based view theory
suffers a tension between descriptive and prescriptive theorizing. However, Barney and Clark
(2007) posits that the resource-based view theory is a theory aspiring to explain the sustained
competitive advantage of some firms over others and, as such, was never intended to provide
managerial prescriptions. In concurrence with this assertion, any explanations the resource-based
view theory might provide may not be indicative, yet still of value to managers, so there may be
no reason to oblige the resource-based view theory to generate theoretically compelling
prescriptions.

Information Theory

Information theory was initially introduced in 1948 by Claude Shannon. The first half of the 20th
century brought about a revolution in how humans think about information. Claude Shannon (the
father of modern information theory) was at the forefront of this revolution. His landmark 1948
paper, A Mathematical Theory of Communication, was the first paper to formally describe a
communication system in which information plays a central role. Concepts such as the capacity
of an information channel, uncertainty of a source and the optimal rate of information
transmission in a noisy environment revolutionized how we think about information. These
concepts laid the groundwork for much of the technology and the optimal rate of information
transmission in a noisy environment revolutionized how we think about information. According
to Shannon, the problem of communication is that of reproducing at one point, either exactly or
approximately, a message selected at another point. Frequently the messages have meaning; that
is they refer to or are correlated according to some system with certain physical or conceptual
entities.

Agency Theory

The agency theory was championed by Jensen and Meckling in 1976. The agency theory
describes theowners’ (principals’) delegated authority to manager (the agent) to run the firm on
his or her behalf with the owners’ welfare depending on the manager accordingly (Jensen and
Meckling, 1976). The agency theory seeks to address the potential conflict of interests between
owners and managers, because the interests of managers may opportunistically utilize firm
resources to satisfy their personal interests (Brammer and Millington, 2008). Basically, firms aim
to maximize the wealth of shareholders, and it might be different with personal interest of
managers. The agent (managers) might have more relevant information compared with
shareholders, the information asymmetry occurs, and this would raise the possibilities that agent
can behave in ways to pursue their own interests.

2.3 EMPIRICAL FRAMEWORK

Past literature concerning accounting information system and how it relates with financial
performance has been studied by several researchers using different analytical methods. For
instance, Ismail and King (2005) did a study that focused on measuring the alignment of AIS
requirements with AIS capacity and then investigating whether this AIS alignment is linked to
firm performance. A mail questionnaire was used on nineteen accounting information
characteristics. Data were collected from 310 Small and Medium Sized Enterprises (SMEs) firms
in Malaysia and analyzed using principal component analysis and varimax rotation with Kaiser
normalization. The results indicate that a significant proportion of Malaysian SMEs had achieved
high AIS alignment. In addition, the group of SMEs with high AIS alignment had achieved
better organizational performance than the firms having low AIS alignment.

Also,Alboali, Hamid and Moosavi(2013) sought to answer the question on whether contingency
components are considered in designing Municipals accounting systems in Khuzestan province
(Iran). This study its data by sending questionnaires manually to accountants, accountant
managers and experts in 34 municipal districts and Centre’s in Khuzestan province. The data of
selected samples were then analyzed based on single sample T- test, independent T, and Chi-
Square. The findings show that the accounting systems of Khuzestan province municipals were
mostly designed based on contingency components which in comparison with similar researches
were significantly contradictory. The respondents’ viewpoint about “human resources”
component was not been articulated profoundly and suitably. The results in this research, it has
been clearly found that the role that organization structure plays in designing accounting system
depends on the organization’s environment.

Furthermore, Adel and Abdallah (2013) sought to ascertain the accounting information systems’
impact on the quality of financial statements submitted to the Income Tax and Sales department
in Jordan. A questionnaire consisting of fourteen questions was designed was employed.
Cronbach's alpha test was used to measure the stability of measurement tool while simple linear
regression test was used to test the hypothesis of the study. The study found that there is a
presence of an impact when using the accounting information systems on the quality of financial
statements submitted to the Income Tax and sales Department in Jordan. Moving further, Ismail
and King (2014) researched on the factors that affect the use of accounting information systems
in factories, small and medium-sized Malaysian manufacturing firms. The study used a sample
comprising 214 companies that had accounting systems. The result indicate that the information
systems of accounting work smoothly as they link information from the top and bottom that help
workers in companies to achieve their goals. In addition, it was found that using accounting
information systems will enable companies to give accurate information to the relevant
government agencies.

Al-Dalaien, Nizar, Ahmad and Mohamad (2016) evaluated the role of accounting information
systems (AIS) in meeting the requirements of financial and managerial performance. The study
employed a survey research design and obtained its data from questionnaire administered to 38
sampled employees in various private hospitals in United Emirates. The data were analyzed
using mean and standard deviation statistics while the study’s hypotheses were tested using the
one samples t-test statistics. Findings from the study revealed that accounting information
systems in the United Arab Emirates private hospitals provide information to meet the
requirements of the financial performance function.

Akesinro and Adetoso (2016) examined the effects of computerized accounting systems on bank
performance in Nigerian banking sector. The study adopted a survey design. A convenience
sampling method was adopted to arrive at a sample size of 50 from 3 deposit money banks
(DMBs) in Nigeria. Correlation analysis was used to analyze data generated for the study.
Results show that computerized accounting system has a positive effect on bank's profitability
and as well customer patronage.

Taiwo (2016) investigated empirically the impact of information technology on accounting

systems and organizational performance. This study utilized both primary and secondary data.
The study sources its primary data from questionnaires administered to 20 staff in financial
services and other related accounting departments in Covenant University Nigeria. Pearson’s
correlation was employed for analyzing the data. Findings showed that there is a significant
positive relationship between ICT system and accounting system and a significant positive
relationship between ICT and organizational performance.
Isa (2017) sought to discover the impact of computerized accounting information system on
management performance in public sector in Nigeria. The study adopted an exploratory research
method. Data were obtained from secondary sources. The impacts of computerized accounting
information system (CAIS) on the executives’ officers of government’s ministries, departments
or agencies were considered in terms of accounting framework and operating procedure in the
public sectors in Nigeria. The study identifies some of the problems associated with the
implementation of CAIS such as high costs of implementations of hardware and software, costs
of maintaining the system and it require special skills. Other problems identified are reduction of
employee, inadequate security and having quality of backup and print accessories. The study
further evidenced the prospects of implementing CAIS such as to lower operating costs, improve
efficiency, increased functionality, better external reporting, improved accuracy and faster
processing of data in the system. .

Also, Ironkwe and Nwaiwu (2018) examined the effect of accounting information system on
financial and non-financial measures of companies in Nigeria. Qualitative and quantitative data
of 16 companies were obtained. Data were collected from questionnaires and the Nigerian stock
exchange (NSE) from 2011 to 2014. The data collected were analyzed using multiple linear
regression techniques with the aid of statistical package for social science (SPSS). The results
show that accounting information system exert significant positive effect on financial and non-
financial measures indicators of companies in Nigeria. Borhan and Nafees (2018) equally
reviewed the impact of accounting information system on the financial performance of selected
real estate companies in Jordan. The study employed a survey research design and collected its
data through questionnaires from 175 employees pooled from 5 companies in Jordan. The study
employed the linear regression statistics to analyze the collected data. The findings indicate that
there is a significant impact of accounting information system on the financial performance of
the companies under study.

Kashif (2018) evaluated the impact of accounting information system on the financial
performance of selected FMCG companies in India. The study adopted a survey research design
with a sample size of 400 participants and data were obtained from 177 returned and valid
questionnaires. The study analyzed the collected data using the simple linear regression analysis
and hypotheses were tested at confidence level of 95%. Findings from the study revealed that
that there is a significant impact of accounting information system on the financial performance
of selected FMCG companies in India.

A similar study was carried out in Nigeria by Akanbi and Adewoye (2018).The authors
investigated the effects of accounting information system adoption on the financial performance
of commercial bank in Nigeria. The study employed a descriptive survey research design where
data were obtained from questionnaires administered to 80 respondents randomly of 16
commercial banks. The study also employed secondary data from the financial statements of the
sampled banks. Data were collected in respect of return on capital equity (ROCE), return on total
asset (ROTA), net operating profit (NOP) and gross profit margin (GPM) within the 10 years
post AIS adoption years (2007-2017). Linear Regression was employed to test the significant
effect of AIS adoption on bank performance. The findings of the study show that commercial
banks in Nigeria adopted and use AIS in providing their services to their customers and the level
of usage is relatively high. The study concluded that AIS adoption has a positive significant with
all the performance indicators (ROCE, ROTA, GPM and NOP).

Ganyam and Ivungu(2019( examined the effect of accounting information system on financial
performance of firms. The main objective of the study was to review conceptual and theoretical
foundations as well as empirical literature relating to accounting information system and
financial performance of firms. Findings from the research reveal that past studies on effect of
accounting information on financial performance limitedly aligned their works to the cost
implication of accounting information system as it relates to financial performance of firms. The
review also found that most of the studies employed the use of survey research design to
examine this relationship and majority of the studies were carried out in advanced economies
where computerized accounting system techniques have been accepted to a large extent

This aspect of this research work deals with the identification of theories and observation of
theories. Furthermore, the next stage is to outline the factors that determine performance.
Therefore, that takes us to the assumptions previously mentioned. This study gives a summary of
all essential findings on the subject matter of corporate financial reporting. Similarly, this
empirical study examines the correlation between corporate financial reporting and Management
in organizations.
Jiang (2008) studied the association between corporate governance and earnings quality. Their
results suggest that only firms in the highest category of corporate governance experience
significantly improved quality of earnings. The document that corporate governance is
negatively associated with small earnings surprises. Their findings imply that firms with weak
corporate governance are more likely to manage earnings in order to meet or beat analyst
forecasts. Financial reporting should provide information that is useful to present and potential
investors and creditors and other users in making rational investment, credit, and similar decision
(Hasan, 2009). Information should be comprehensible to those who have a reasonable
understanding of business and economic activities and are willing to study the information with
reasonable diligence. Financial reporting should provide information to help present and
potential investors and creditors and other users to assess the amounts, timing, and uncertainty of
prospective cash receipts. Since investors' and creditors' cash flows are related to enterprise cash
flows. (Nwanji et al. 2020).

Connelly (2012) investigated the effect of ownership structure and corporate governance on firm
value in Thailand. They find that Tobin's q values are lower for firms that exhibit deviations
between cash flow rights and voting rights. They also find that the value benefits of complying
with "good" corporate governance practices are nullified in the presence of pyramidal ownership
structures, raising doubts on the effectiveness of governance measures when ownership
structures are not transparent. Finally, they assert family control of firms through pyramidal
ownership structures can allow firms to seemingly comply with preferred governance practices
but also use the control to their advantage.

Babalyan (2001) focused on the relative explanatory power and earnings responses coefficient in
regressions of reported accounting numbers on market returns of firms listed in the Swiss Stock
Exchange, but preparing financial statements under different accounting regimes. He showed
that earning numbers from International Accounting Standards (IAS) compliant firms are not
more value relevant than earnings from firms reporting under Swiss standards, after controlling
for firm size, foreign market listing, audit quality and sensitivity to some variable specifications.
He also provided evidence that firms reporting under US GAAP provide more informative
earnings numbers, though this result must be put in the context of the small sample of firms and
high presence of US GAAP firms on foreign stock markets.
 Gaston, Fernadez, Harne and Gadea (2003) employing a sample of 50 local firms listed on
national stock markets during the period 1995-1999 in 36 countries, undertook a comparative
study of relevance of earnings and their components. Their results showed that disaggregation of
earnings into components parts of income statement provides the investors with incremental
information regarding market value of companies. Their results are consistent with earlier studies
providing evidence of value relevance of earnings for valuation purposes irrespective of the
market analyzed, though the potency of this differ between counties.

Wulandri and Rahman (2004) addressed the effect of three accounting institutional environment
parameters, accounting standard quality, acceptability of accounting standards and enforceability
of accounting standards on value relevance of accounting earnings. Using a sample from 35
countries, they found a positive association between value relevance of earnings and quality of
accounting standards acceptability of standards and punitive enforcement of the standards. They
also find that accounting institutional environment has a stronger positive association with value
relevance of accounting earnings than legal environment. They also found that for code law and
emerging market countries, the association between accounting institutional environment and
value relevance is positive and stronger than that of common law developed countries.

Ndubizu and Sanchez (2004) examined the valuation properties of US GAAP and IAS in Chile
and Peru. They used the accounting regimes to formulate contracts and to represents the
contracts in the financial statement to minimize the likelihood of assessment noise. They found
that US GAAP and IAS earnings and book value are value relevant in both countries. However,
US GAAP as applied in Chile is more value relevant than IAS in Peru. They provide evidence of
the superior value relevance of US GAAP over IAS in emerging countries.

Ragab and Omran (2006) examined empirically whether national and international investors in
the Egyptian stock market perceive accounting information based on Egyptian Accounting
standards to be useful in stock valuation. Using a sample all available listed firms in the
emerging market data based from 1998 to 2002, evidence of value relevance of accounting
information in Egypt was obtained based on both return and price models. They found that stock
prices in Egypt are less information about the future value of the firm than accounting
information. They suggested that competing information sources such as earnings forecast, firm
research by financial analyst, management conference calls are far less relevant in Egypt than
accounting information.

Mao (2006) demonstrated that measurement error bias is a major factor driving the results of
previous studies of value relevance of earnings information decline over time. Using the variance
of measure error in earnings change as proxy for unexpected earnings, and after controlling for
impact of measurement error, trends of Earnings Responses Coefficient (ERC) and R2 estimated
using the latent variable model are not significantly different from zero. Mao provided
explanation for the low magnitude of OLS ERC observed in previous studies by showing
substantial measurement error in using either earnings change or analyst forecast to calculate
unexpected earnings.

Amahalu, Abiahu, Obi and Nweze (2018) in their study of effect of accounting information on
market share price of selected firms listed on Nigeria Stock Exchange (2010 – 2016), using
coefficient of correlation and simple linear regression (SLR) analysis, also concluded that
dividend per share, earnings per share and return on equity has a positive and statistically
significant effect on market share price.

Akadakpo and Mgbame (2018) also investigated the value relevance of accounting information:
the moderating effect of timeliness. In analyzing data collected covering the period of 2011 –
2014), using the panel data approach, they concluded that earnings per share has a positive but
insignificant effect on market value, dividend and cash flow have a negative and insignificant
effect on market value while book value of assets has a positive and significant effect on market
value.

Agundu and Wala (2017) in their study on the association of price and dividend in the Nigerian
capital market (2009-2014), using descriptive statistics, correlation and regression analysis, as
well as t-test, found that stock price is significantly associated with dividend per share.

Similarly, Olubukola, Uwalomwa, Jimoh, Ebeguki and Olufemi (2016) in their study on value
relevance of financial statements and share price, used secondary data from the Nigerian Stock
Exchange Market and the audited financial statements of listed banks spanning the period 2010 –
2014. The study adopted the use of both descriptive statistics and the use of fixed effects panel
data method of data analysis technique. Their findings also show that a significant positive
relationship exist between earnings per share (EPS) and last day share price (LDSP).

Nwaobia, Ogundajo and Kwarba (2016) conducted a study on value relevance of accounting
information and share price link, using ordinary least square and ANOVA tests and found that
there was no significant difference between the value relevance of accounting information prior
and after the adoption of IFRS. They finally concluded that financial information from SAS or
IFRS has no significant influence on the firms’ value.

Eriabie and Egbide (2016) in their study on accounting information and share prices in the food
and beverage, and conglomerate sub-sectors of the Nigerian Stock Exchange used the Ohison
(1995) model and the multiple regression method to analyze their data. From their findings,
market price per share (MPS) is positively but insignificantly related to book value per share
(BVPS) and earnings per share (EPS) in the conglomerate sub-sector. On the other hand, MPS is
positively and significantly related to both BVPS and EPS in the food and beverage sub-sector.

Omokhudu and Ibadan (2015) carried out a study on the value relevance of accounting
information using the ordinary least square (OLS) and dynamic model estimation. The study
found that earnings, cash flow and dividends were statistically and significantly associated with
firm value but that book value was not significantly related to firm value.

Adaramola and Oyerinde (2014) also carried out a study on value relevance of financial
accounting information of quoted companies in Nigeria. They conducted a trend analysis of
selected listed companies from 1992 to 2009 using the ordinary least square (OLS) regression
method and revealed that the accounting information does not following a particular trend within
the period under study. They discovered that the value relevance was weak in the periods of
political crisis caused by military dictatorship (1992 – 1998 and global economic crisis (2005 –
2009) but that it was strong in the other periods (1999 – 2004).

Oyerinde (2011) carried out a study on value relevance of accounting information in the Nigerian
Stock Market. The study generated data from primary and secondary sources while the ordinary
least squared (OLS), random effects model (REM), fixed effects, model (FEM) and independent
sample t – test were used in analyzing the data. The findings show that there is a significant
relationship between accounting information and share prices of companies listed in the Nigerian
Stock Exchange.

Ewereoke (2018) undertook a study titled ‘Value relevance of accounting information in a

transitional economy: The case of Nigeria stock market’. The sample comprised of 68 companies
selected using multiphase sampling technique. The study relied on secondary data obtained from
annual financial statements. The data were analyzed using the Ordinary Least Squares approach.
The results showed that EPS had a positive significant effect on share prices; while, book value
per share was positive but statistically insignificant. The results showed that dividend per share
had a negative insignificant effect on share prices of companies listed on Nigerian stock
exchange.

Hung, Ha, and Binh (2018) conducted a study titled ‘Impact of accounting information on
financial statements to the stock price of the energy enterprises listed on Vietnam’s stock
market’. The sample comprised of 44 energy enterprises listed on HSX and HNX. The study
relied on secondary data retrieved from financial statements from 2006 to 2016. The data were
analyzed using OLS and quantile regression models. The results showed a positive significant
effect of ROA and a negative non-significant effect of leverage on share price. The authors
recommended that investors pay particular attention to accounting information and firms should
provide sufficient accounting information on the financial statements, within the prescribed time.

Dang, Tran, and Nguyen (2018) undertook a study titled ‘Investigation of the impact of financial
information on stock prices: The case of Vietnam’. The sample comprised of 273 listed firms on
Ho Chi Minh City stock exchange (HOSE). The study relied on secondary data for the period
2006 to 2016. The data were analyzed using multiple regression technique. The results showed
that EPS, book value of stock, cash flow from operating activities, and firm size have a positive
effect on stock prices. They recommended among others that investors focus on accounting
information in the audited financial statements when purchasing stocks and the provision of
accounting information in a complete and timely fashion.

Uniamikogbo, Ezennwa, and Bennee (2018) conducted a study titled ‘Influence of accounting
information on stock price volatility in Nigeria’. The study adopts the cross-sectional research
design. The sample comprised of twenty two (22) companies judgmentally selected using simple
random sampling technique. The study relied on secondary data obtained from annual reports
and accounts for a period of five years (2013-2017). The data were analyzed using descriptive
statistic and Ordinary Least Square (OLS) regression. The results showed that earnings per share
and dividend per share have a negative and significant effect on stock prices while book value
per share has a positive and significant effect on stock prices.

Hassan and Haque (2017) conducted a study titled ‘Role of accounting information in assessing
stock prices in Bangladesh’. The sample comprised of 93 companies from six industries listed on
the Dhaka stock exchange (DSE), Bangladesh. The study relied on secondary data obtained from
companies’ official website and DSE from 2012 to 2016. The data were analyzed using multiple
regression technique. The results showed a positive significant effect of EPS; while, book value
per share had a positive non-significant effect on market price per share. The study however
offered no recommendation.

Olowolaju and Ogunsan (2016) conducted a study titled ‘Value relevance of accounting
information in the determination of shares prices of quoted Nigerian Deposit Money Banks’. The
sample comprised of 12 listed DMBs purposively drawn from the Nigerian stock exchange. The
study relied on secondary data from financial statements, NSE fact book and market prices from
NSE daily listing. The data were analyzed using multiple regression technique. The results
showed that book value per share and dividend per share had a significant positive influence on
market value of shares; while, EPS was positive but non-significant. The study recommends that
banks provide adequate and reliable accounting information in their financial statements to assist
potential and prospective investors in taking informed decisions. The results also showed that
number of shares in issue had a significant positive effect on demand for shares; while, EPS was
positive and non-significant. The study was however conducted and limited to banking
institutions.

Eriabie and Egbide (2016) undertook a study titled ‘Accounting information and share prices in
the food and beverage, and conglomerate sub-sectors of the Nigerian stock exchange’. The study
used a comparative analysis research design. The sample comprised of 14 companies randomly
selected from the conglomerate and food and beverage subsector (i.e., seven each). The study
relied on secondary data obtained from the annual reports of the sampled companies for periods
of 2005 to 2014. The data were analyzed using multiple regression technique. The results
showed that book value per share (BVPS) and earnings per share (EPS) were positive but
insignificantly related to market price per share for the conglomerate sub-sector. For the food
and beverage subsector, both BVPS and EPS were positive; however, only BVPS was
significant. The study recommends a sectorial approach in formulating accounting standards and
more stringent monitoring of application of accounting rules. Nguyen (2016) conducted a study
titled ‘The relationship between financial information and the price of stock of listed firms’. The
sample comprised of 147 listed firms on Ho Chi Minh City stock exchange (HOSE) and 179
firms on Hanoi stock exchange (HNX). The study relied on secondary data for the year 2008 to
2014. The data were analyzed using multiple regression technique, i.e., the adjusted Ohlson
(1995) model. The results showed that book value and profit positively affected stock price.
Oliveira and

Taques (2016) undertook a study titled ‘Relation between share price and financial indicators in
the Brazilian stock market’. The sample consisted of 194 companies across 9 sectors as defined
according to the BM &FBovespa. The study relied on secondary data from quarterly financial
reports of the companies listed on the website of BM&FBovespa from 2009 to 2013. The data
were analyzed using panel data regression technique. The results showed that EPS and book
value per share had a positive significant effect on share prices. Angahar and Malizu (2015)
conducted a study titled ‘The relationship between accounting information and stock market
returns on the Nigerian stock exchange’. The study used the ex post facto research design; and,
the sample included 40 firms purposively drawn from quoted firms on the NSE. The study used
secondary data obtained from financial statements for 2011- 2017. The data were analyzed using
multiple regression technique. The results showed that earnings per share (EPS) had a positive
significant effect on stock returns; while, earnings change had a non-significant effect on stock
returns of the sampled firms. The study recommended that companies should strive to increase
their earnings and investors should critically examine the earnings figure prior to investment
decisions. The study was limited to earnings per share and change in earnings. Camodeca,

Almici, and Brivio (2014) undertook a study titled ‘The value relevance of accounting
information in the Italian and UK stock markets’. The sample comprised of 100 companies listed
on the Milan and London stock exchanges ranked by market capitalization. The study relied on
secondary data obtained from annual reports and the London/Milan stock exchange for the
period 2011 to 2013. The data were analyzed using multiple regression technique. The results
showed that net income before extraordinary items and operating cashflows have a positive
significant effect on market capitalization for Italy. However, net income before extraordinary
items was positive but non-significant; while, operating cashflows was positive and significant in
the U.K. The results also showed that book value of equity for both Italy and the U.K. was
positive and significant. The study concludes that in the UK cash flows possess greater
explanatory power than earnings, while in Italy it is the opposite. However, the authors offered
no recommendation.

Vijitha and Nimalathasan (2014) conducted a study titled ‘Value relevance of accounting
information and share price: A study of listed manufacturing companies in Sri Lanka’. The
sample comprised of 20 firms on the Colombo stock exchange selected using convenience
sampling. The study relied on secondary data obtained from financial statements from 2008 to
2012. The data were analyzed using multiple regression technique. The results showed that EPS
and Net Assets Value per Share (NAVPS) had a significant positive effect on market price per
share at 5 and 10% respectively. ROE had a positive non-significant effect; while, Price Earnings
Ratio (P/R) had a negative non-significant effect on market price per share. The study concludes
that the value relevance of accounting information has a significant impact on share price;
however, the authors offered no recommendation.

Wang, Fu, and Luo (2013) undertook a study titled ‘Accounting information and stock price
reaction of listed companies - Empirical evidence from 60 listed companies in Shanghai stock
exchange’. The sample comprised of 60 listed companies in Shanghai stock exchange. The study
relied on secondary data obtained from annual report and websites for the year 2011. The data
were analyzed using Pearson correlation analysis and multiple regression technique. The results
showed a positive correlation between accounting information (Earnings Per Share, Price to
Earnings Ratio, Income from main operation ratio, Rate of Return on Common Stockholders’
Equity, Receivables Turnover Ratio, Inventory Turnover Ratio, Liquidity Ratio, and Quick
Ratio) and stock price; however, only EPS and ROE were significant. The multiple regression
results also showed a positive effect of EPS and ROE. The study recommended that the Chinese
government strengthen the supervision of listed companies so that the disclosure of information
is truer and more normative. The study however focused on a single year.
Kalhor, Hosseini, and Alipour (2013) undertook a study titled ‘The relationship between the
quality of accounting information disclosure and corporate performance in the capital market of
Iran’. The study used the quasi-experimental research design. The sample comprised of 130
companies listed in Tehran stock exchange. The study relied on secondary data from 2006 to
2010. The data were analyzed using multiple regression technique. The results showed a positive
significant relationship between selected accounting ratios (ROE, ROA, EPS, and stock prices)
and quality of accounting information disclosure.

Olaofe, Akanni, Ekundayo, Ajibola and Ajibola (2020) This research examines accounting
information system on performance of corporate organizations in Nigeria. The role of
professionals in accounting, information technology and academics were explored. To attain the
aim of the study, 30 questionnaires were administered and 25 retrieved which was analyzed and
the single factor ANOVA technique was used to test the hypothesis. Findings from the research
depicted accounting information systems have a positive impact on corporate organizations
performance in Nigeria because the observed F of 251.43 obtained was greater than F critical
value of 2.74. As recommended, corporate organizations should massively invest in accounting
information system, adopt merit-based recruitment and ensure periodic training of accounting
information systems personnel.

Abdallah, (2013) and Adrian-Cosmin (2015) test the impact of the accounting information
systems on the quality of financial statements. They found there is a strong effect of using the
accounting information systems on the quality of financial statements. Onaolapo and Odetayo
(2012) found that Accounting Information System (AIS) enhance organizational performance
especially in global technology advancement, agree with Patel (2015), who detect the importance
of accounting information systems, that helps in facilitating decision making and amend
organization’s environment, structure and requirements of task, furthermore, emphasizes
accounting information plays an necessary role in decision making process related to the
financial and economic issues such as cost accounting system, management accounting system,
price and profitability which provide the useful information to the manager to make the financial
and economic decisions, also they a certain that (AIS) played a significant role in survival of
organization.
Tan (2016), test the impact of AIS on internal auditors in Turkey, he revealed the importance
role of accounting information systems in companies through enable all levels of management to
access comprehensive information that goes into the planning and controlling of activities within
business organizations. In addition, AIS provide high quality of information to internal and
external users and typically cover six main aspects: people, procedures, data, software,
information technology infrastructure and internal controls.

Hla and Teru (2015), examined the efficiency of accounting information system and
performance measures – literature review. The main objective s of many businesses to adopt this
system are to improve their business efficiency and increase competitiveness. The qualitative
characteristic of any Accounting Information System can be maintained if there is a sound
internal control system. Internal control is run to ensure the achievement of operational goals and
performance. Therefore the purpose of this study is to examine the efficiency of Accounting
Information System on performance measures using the secondary data in which it was found
that accounting information system is of great importance to both businesses and organization in
which it helps in facilitating management decision making, internal controls ,quality of the
financial report ,and it facilitates the company’s transaction and it also plays an important role in
economic system, and the study recommends that businesses, firms and organization should
adopt the use of AIS because adequate accounting information is essential for every effective
decision making process and adequate information is possible if accounting information systems
are run efficiently also, efficient Accounting Information Systems ensures that all levels of
management get sufficient, adequate, relevant and true information for planning and controlling
activities of the business organization.

Akanbi and Aruwaii (2018) also examined the impact of accounting information systems (AIS)
adoption by manufacturing industries on their general accounting activities and also to estimate
the relationship that exist between AIS devices and accounting activities. Regression and
correlation analyses were used to analyze and interpret the objectives. The regression model
results that F-value (0.000 < 0.050) and Adj R2 = 0.6970 showed that AIS devices has 68.70%
impact on the efficiency of accounting activities in the manufacturing industries if properly
implemented. The result of Kendall’s correlation matrix showed the statistical coefficient of 62%
indicating that there is a strong correlation between dependent and independent variables, the
coefficient of determination (R2) = 0.418 revealed that there is a significant relationship in using
accounting information system to fast track accounting activities. The tested hypotheses of this
study were measured at level of 95% confidence interval. The study concluded that accounting
information systems devices are spontaneously and simultaneously appropriate for
manufacturing industries engaging in accounting activities, also revealed that there is a
significant relationship between accounting activities and Accounting information systems. The
study also concludes that accounting information systems adoption in manufacturing firms has
the following benefits: facilitation of financial statements preparation, enhancement of inventory
valuations, enhancement of budgetary management, and favoring General Accepted Accounting
Principles adoption. Therefore, manufacturing firms should embrace more and well-structured
accounting information systems to enhance accounting activities.

2.4 CONCEPTUAL FRAMEWORK

Figure 1 below is the conceptual framework for financial accounting information and decision
making of an organization. It shows the antecedent conditions financial accounting information,
its attributes as well as its outcomes.

Financial Decision
Accounting Making
Information
Objectives
Collecting Examination
Processing Selection
Store Achievement
Communication
 CHAPTER THREE

METHODOLOGY

3.1 RESEARCH DESIGN

The study used Cross Sectional research designs. Cross-sectional design was chosen because it

was the most appropriate given the nature of the objectives and limited time available to conduct

this research. It also used both qualitative and quantitative methods of data collection.

Descriptive research survey was used with the intension of obtaining both qualitative and

quantitative aspect of data and to organize data in an effective and meaningful way and also

helped the researcher collect data from population and got the description of existing phenomena

as it existed by asking individuals about their perceptions, attitudes, behaviors and values.

3.2 AREA OF STUDY

The study was carried out at MTN Nigeria located at Lagos, Nigeria.

3.3 POPULATION OF STUDY

Basing on the facts given by the human Resource manager of MTN Nigeria, the company

employed 40 people in different departments which included: marketing Agents, Accounting

Management, ICT, Procurement and other support staff member at its Lagos branch.

3.3 SAPLING TECHNIQUES AND SAMPLE SIZE

Purposive sampling method was used where by a few respondents having the required

information was selected from the whole population to participate in the study. Simple Random
sampling was used and each department got an equal chance of being selected for sample. The

researcher also used systematic sampling which aimed at eliminating mistakes, improved the

levels of data accuracy and ensured that every department at least every department was selected

using random numbers and this helped the researcher pick up the section with which to start

from.

A sample of 25 respondents was selected by the researcher and represented the whole population

and this sample size was determined using Krejcie and Morgan (1970). This is shown in the

table below:

Table 3.1: showing composition of the sample size.

3.4 METHOD OF DATA COLLECTION

3.4.1 Secondary data

The data was collected from the, internet, literature review, journalists and other resource

centers. Under this source, the data was obtained from financial reports, invoices, journals

magazines, newspapers and reports from the resource centers which backed up quantitative data.

3.4.2 Primary data

The researcher got information directly from the respondents at MTN Nigeria.

3.5 Data Analysis

The data was coded, edited and analyzed using both statistical and non-statistical methods and

the data collected was arranged in systematic way to ensure relevancy and adequacy. The

researcher presented the findings of the study using bar charts, frequencies, percentages and

tables.

3.5.1 DATA COLLECTION TOOLS

Data collection is the process of collecting and analyzing information on relevant variables in a

redetermined, methodical way so that one can respond to specific research question. Tools used

to gather information include;

a) Questionnaire

Questionnaire is a carefully designed instrument for collecting data in accordance with the

specifications of research questions. This contained a form of set questions that were answered

by the respondents and the researcher asked simple non logic questions every respondent could
comprehend fully. Self-administered semi structured questionnaire was designed to collect

quantitative data. It involved both open-ended and closed ended questionnaires. This research

tool was considered to be central for this study simply because it was a convenient tool whereby

the respondents could choose when to answer the research questions without panic.

b) Interviews

This is the physical interactions between interviewers and interviewee in the data collection

process and the researcher used face to face interview and which helped the researcher collect

information from the target population. Both formal and informal interview were adopted to

maximize information from different respondents who participated in the research study. The

researcher interviewed all the respondents through physical contacts in the process of collecting

data about the effect of accounting information on decision making of an organization. The

researcher adopted structured interview which was in form of simple questions which the

respondents asked through face-to-face method.

3.6 VALIDITY AND RELIABILITY OF RESEARCH INSTRUMENT

3.6.1 Validity of the data

Validity refers to the amount of systematic or built-in error in measurement. Validity determined

whether the research instruments truly measured what it intended to measure or how truthful

research results would be. Confidentiality was assured to the participants and the report was

edited to protect identification of individuals. Data collected was subjected to some preparation

such as editing, coding and data entry which helped the researcher to detect errors and omissions.

Piloting was carried out to test the validity of the instruments. A pilot study was conducted by

the researcher by taking some questionnaires to the staff security group which was filled by some
respondents at random. From this pilot study, the researcher was able to detect questions that

needed editing and those that were ambiguous.

3.6.2 Reliability of the data

Reliability refers to random error in measurement. It indicated the accuracy or precision of the

measuring instrument. Reliability analysis allowed examination of the properties of measurement

scales and the variables making them up. The reliability analysis procedure calculated a number

of commonly used measures of scale reliability and provided information on the relationship

between individual variables in the scale. The reliability analysis procedure calculated a number

of commonly used measures of scale reliability and provided information on the relationship

between individual variables in the scale.

3.7. LIMITATIONS TO THE STUDY

The researcher also faced a financial problem and lack of enough time to carry out research fully.

However, this problem was solved by the researcher by getting enough time and financial

support from family members and relatives who enabled her carry out the research effectively.

The researcher faced a problem of limited cooperation from the respondents. This was due to

their own reasons being that they had limited time and interest in providing the information

required. However, the researcher explained the purpose of the research to the target respondents

and convinced them very well hence participating in the study.

Communicating to some target respondents was difficult due to cultural differences, language

barriers and differences in behaviors which were going to limit the research study. However, to

ensure effective communication, the researcher used English language which at least every

literate respondent comprehended and then local language for those with English limitation.