Full Project-THE EFFECT OF FINANCIAL ACCOUNTING REPORTING ON THE MANAGEMENT OF A BUSINESS

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ABSTRACT

The topic of this study is entitled “The Effect of Financial Accounting reporting on the Management of a Business”. In carrying out this study therefore, the study was divided into five chapters. Chapter one deals with introduction, background study, formation of hypothesis, significance of study. Chapter two centers on the theoretical frame work of the study and literature were review.  Here the relevant literature were gathered and review. Chapter three deals with research design and methodology focusing mainly on a data definitions and limitation faced while carrying out the research. Chapter four, which the brain of the study deals on data analysis. Here the data collection are presented and analysed and the finding presented. Chapter five deals with recommendation and conclusions

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Financial accounting encompass activities related to the preparation of certain reports, which is known as financial statement.  These statement reports the financial position of a firm at a particular time, the firms activities and resulting profit or losses during the most recent period, and the flow of resources occurring within the firm during the same period. WALGERNBAC and Co (19) defined financial Accounting as the process of (1) recording  (2)  Classifying  (3) Reporting and interpreting the financial data of an organization. Following this definition, financial accounting is faced with three major roels recording, classifying and reorting financial data of an organization or business.  In recording financial accounting is engaged with the role of taking note of all he financial activities that takes place in the business. Classifying includes the grouping of these activities in uninformity while reporting is concerned with the preparation of reports known as financial statements.

These statement reports the financial position of a business at a particular time, the forms activities and resulting profit or loss and source and application of fund of the firm at the most recent period. However, the question arises what are the effects of these financial accounting reports on the management of a business?  The answers to this pose a problem which they seek to solve.  Not every business person comprehend the importance of financial accounting information of the management of their business.  Some manage the business instinctively, others like traffic defaulter who disology road signs, disobey the waring communicated by financial accounting information and end up in business accident.

There are other sources of information, which have impact on the management of a business and the combination of these source given an information system in its complex nature. As Frank Wood puts it:  It must not be thought that accounting of any firm is the management control system through, which both manager and external user get a picture of the organization as a total entity. Moreover, financial accounting information usually comes in a diswished form by “wearing the cloak of technicaties.  Such technicaties include calculation which need expert knowledge in its interpretation.  But some business, due to financial incapacity cannot employ such expert they tend to over look financial accounting information system which has an effect on the management of any business concern, the problem is to all business known this, this the question that the researcher seeks answers.

1.2  STATEMENT OF PROBLEM:

As said earlier, an effective information system is very vital for the function of any business undertaken. The financial accounting system in most business undertaken do not show fully the principle of accounting system. The flow of information, the cost of collecting any information and the internal control procedures have some problem.

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