TRADE PROJECT

THE IMPACT OF MANAGEMENT ACCOUNTING

TECHNIQUES ON ORGANIZATION DECISION MAKING
IN COMMERCIAL BANKS

PRESENTED BY: ANLORD MOMANYI KEBANDE

INDEX NO.: 5520010390

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILLMENT FOR THE AWARD OF DIPLOMA IN
ACCOUNTANCY

PAPER CODE: 2804/307A

SUPERVISOR: MR. KOECH

EXAM SERIES: NOVEMBER 2022

DECLARATION

I declare that this trade project is my original work neither has it been written by other person or
submitted for any award.

No part of this trade project is penetrated by any means of its photocopying, duplicating or any other
means without my knowledge as the author.

NAME : ANLORD MOMANYI KEBANDE

SIGN : ----------------------------------- DATE : ------------------------------------

SUPERVISOR’S NAME : MR. KOECH SHADRACK

SIGN : ------------------------------------ DATE : ------------------------------------ DEDICATION.

This trade project, I dedicated it to my parent especially Leon Momanyi , my true friends and my teacher
MR. SHADRACK KOECH who supported and assisted me throughout the complications of this trade
project.

I thank you all, may our almighty father bless you abundantly.

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DEDICATION
With gratitude and respect I dedicate this project to my family, friends for the support and love during
my training at Rift Valley Institute

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ACKNOWLEGEMENT

My foremost thanks goes To Almighty Father who is above for the gift of life and good health he has
given me while I was in the process of writhing and compiling this trade project.

Much applications and my sincere gratitude goes to my parents, my brothers and sister for their support
throughout my studies.

I won’t forget my supervisor MR. KOECH SHADRACK for his kindness and tireless efforts to see I achieve
my goals.

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Contents
DECLARATION...............................................................................................................................................i
ACKNOWLEGEMENT...................................................................................................................................iii
ABSTRACT...................................................................................................................................................vi
CHAPTER ONE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................................1
1.1 BACKGROUND OF THE STUDY..........................................................................................................1
1.2 STATEMENT OF THE PROBLEM.........................................................................................................2
1.3 THE OBJECTIVES/AIMS OF THE STUDY.............................................................................................3
1.4 SCOPE OF THE STUDY........................................................................................................................3
1.5 SIGNIFICANCE OF THE STUDY...........................................................................................................4
1.6 RESEARCH QUESTIONS......................................................................................................................5
1.7 RESEARCH HYPOTHESIS....................................................................................................................6
1.8 OPERATIONAL DEFINITION OF TERMS.............................................................................................7
CHAPTER TWO.............................................................................................................................................8
REVIEW OF RELATED LITERATURE...............................................................................................................8
2.1 INTRODUCTION.................................................................................................................................8
2.2 HISTORICAL REVIEW OF MANAGEMENT ACCOUNT.........................................................................8
2.3 DEFINITION OF MANAGEMENT ACCOUNTING...............................................................................10
2.4 ESTABLISHMENT OF EFFECTIVE MANAGEMENT ACCOUNTING SYSTEM.......................................11
2.5 MANAGEMENT AND DECISION MAKING EXERCISE........................................................................11
RELEVANTAND IRRELEVANT COSTS.......................................................................................................12
2.6 COSTS VERSUS DECISION MAKING TECHNIQUES...........................................................................12
2.7 EFFECTS OF WRONG DECISIONS.....................................................................................................16
CHAPTER THREE........................................................................................................................................17
RESEARCH METHODOLOGY.......................................................................................................................17
3.1 INTRODUCTION...............................................................................................................................17
3.2 RESEARCH DESIGN..........................................................................................................................19
3.3 POPULATION OF THE STUDY...........................................................................................................20
3.3 SAMPLE SIZE....................................................................................................................................20
3.5 METHOD OF DATA COLLECTION.....................................................................................................21

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 3.6 METHOD OF DATA ANALYSIS..........................................................................................................23
CHAPTER FOUR..........................................................................................................................................24
DATA PRESENTATION AND ANALYSIS........................................................................................................24
4.1 INTRODUCTION...............................................................................................................................24
...............................................................................................................................................................24
4.2 DATA ANALYSIS...............................................................................................................................24
4.4 FINDINGS OF THE STUDY................................................................................................................29
4.5 SUMMARY FOR THE FINDING.........................................................................................................30
CHAPTER FIVE............................................................................................................................................31
SUMMARY, CONCLUSION AND RECOMMENDATION................................................................................31
5.1 INTRODUCTION...............................................................................................................................31
5.2 SUMMARY.......................................................................................................................................31
5.3 CONCLUSION...................................................................................................................................32
5.4 LIMITATION.....................................................................................................................................33
5.5 RECOMMEDNATIONS.....................................................................................................................33
REFERENCES..............................................................................................................................................35

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vi
ABSTRACT

Accounting information is necessary to understand financial situation of the firm and used as
the basis of decision making. The purpose of this research was to study the impact of
management accounting techniques on organization decision making in commercial banks. The
researcher used a survey research design to study accounting information and its relationship
with decision making in commercial banks. For the purpose of this study population consisted
of 50 employees in commercial banks. The sample size of the study was 5 employees who
constituted 10% from each stratum. There was collection of primary data from the respondents
using self-administered questionnaires. Descriptive statistics (mean and standard deviation)
were used to analyze the data. Results indicated that reliability and comparability were
important in determining decision making in firms. From the study findings, the researcher
recommends that there should a clear methodology designed on how decision should be
undertaken in an attempt to address.

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 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Management accounting is concerned with business problems. Thinking

about business problems; conceptually means being able to ask the right

questions. Business problem are diverse. One class of the problems concerned

with resources allocating (planning and decision) is essentially economic

problems. Another class with business problem is the evaluation of observed

consequences of behavioral information and a number of another aspect. Both

classes call for a systematic approach to the business enterprise both is likely to

involve the use of quantitative techniques to achieve a wholesome enterprise

objective.

Therefore, operation of management accounting system is the application

of accounting designed to assist of levels of management in planning and

controlling the activities of the organization. So management accounting is a

system with financial executive and management accountant’s use for planning

and control, and also to provide information to the people responsible for internal

reporting. It also have to do with cumulative to fulfill organization goals and

objectives.

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 Major qualitative information system in almost every business

organization is of importance. It could be said that the objective of the person or

persons responsible for designing, planning and controlling of the operation

management counting system is to ensure proper use of various accounting

techniques available.

Management accounting as a discipline is also used to ensure proper

internal reporting to managers for use in planning and controlling routine

decision and information major plans and policies and finally reporting to

stakeholders, governments and other outside parties.

A study of techniques used by operation of management accounting

system in COMMERCIAL Institutions cannot be undertaken in vacuum. The

techniques that can used by the management for evaluating performance

appraisals in making decision, such as whether cost are fixed or variable, and

how these costs have behaved when the valued of the sales expand or contrast.

When the performance reports are needed that pin points some major variance so

as to get better basic or analysis between actual results and budget results. For the

purpose of the project, it is necessary to restrict our assumption.

1.2 STATEMENT OF THE PROBLEM

The aim of this research work is to identify the problem of management

accounting in an organization. In the present competitive environment, the

fixation of prices is mostly determined by through products cost. Profit

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adequately decides to survival of a firm in the future competitive environment is

very much concerned with effective of available resources for production.

1.3 THE OBJECTIVES/AIMS OF THE STUDY

The objectives of this project is first to highlight the various management

accounting techniques used in the operation of management accounting system,

and the role of techniques are out to achieve improving business performance

through effective cost and management account which renders the useful

information account to decision markers for proper planning, evaluation and

control. Some of the information rendered comprises, forecasting to product cost

of an order, budget preparation, determination of standard costs and analysis of

variance etc.

1.4 SCOPE OF THE STUDY

It is the responsibility of the management to ensure that planned actions of

the organization are followed with little or no deviation. Therefore, there must be

a system of internal control to monitor human and resources is desired ways. The

internal control is always of institutional effective management control.

However, it is not our intention to study how accounting system would be

confirmed to the specific management accounting techniques used and how to

make them more effective.

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 Furthermore, the area in which the project covered it is based on the

management accounting techniques as a basis for business decision in

commercial banks Nakuru.

1.5 SIGNIFICANCE OF THE STUDY

Although management accounting is not as popular as financial accounting

yet it has its own distinct feature that makes it very useful to various categories of

user which includes:

i. Significance to management personnel: Which assist in determining

product cost and price, break event point, cost classification, budget profit

planning.

ii. Significance to workers: These helps in setting and applying a

satisfactory wage system, appropriate incentives that justify proper

efficiency of workers.

iii. Significance to government: It helps in ascertainment of appropriate

computation of company tax, relief to individual tax.

All these will go along in helping the organization to find the suitable

financial information needed at any point in time to make financial

decisions which would give the organization a good purpose of direction.

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1.6 RESEARCH QUESTIONS
Since managerial accounting is now going an inevitable attitude of

management for successful conduct of any modern business. One could not but

wonder how does this managerial accounting system aid management of an

organization in coming to a decision? What are the significance of applying those

systems in an organization? How successful is organization like EMCON.

Benefit from the applications of these decisions making benefit from the

applications of these decisions making/what is the consequences from wrong

decisions as applicable to a manufacturing industry.

These questions will form for basis for establishing basis assumption for

this study.

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1.7 RESEARCH HYPOTHESIS
This research work will aim at finding out whether:

1H0: There is different between management accounting and cost accounting and

financial accounting.

1H1: There is no different between management accounting, cost accounting and

financial accounting.

2H0: The operational statement displayed by the management accountant is

extremely useful to the management in taking vital decisions.

2H1: The operational statement displayed by the management accountant are not

extremely useful to the management in taking vital decision.

3H0: The management accounting has been a source of help or misleading

activities to the company?

3H1: The management accounting has not been a source of help or misleading

activities to the company?

4H0: Has the nature of planning and control whether budgetary control or

otherwise influence the managerial accounting behavior in Nakuru?

4H1: Have the nature no of the planning and control whether budgetary control or

otherwise influence the managerial accounting behavior in Nakuru?

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1.8 OPERATIONAL DEFINITION OF TERMS
i. Standard: Standard is a determined measurable quantity set in defined

conditions against which performance can be compared usually for an

element of work, operation or activity.

ii. Standard cost: A standard cost is carefully free determined calculation of

how much cost should be under specified condition. This is usually

expressed as a standard cost per unit of activity. This could be contrasted

to budget cost, which are total rather than unit cost.

iii. Variance: This explains the difference between actual result and expected

result. The expected results are the standard cost and standard revenue.

iv. Planning: Planning is use an integral part of all human activities. It is the

established and the actions required to achieve these objectives.

v. Decision making: Decision making is the final stage in planning it

involves the decision makers, the opportunity to choose between

alternative course of action and selecting the one that meets the firm’s

objectives.

vi. Budget: A budget is formalized plan of action (a quantitative expression of

the objectives and goals of an enterprise prepared prior to define prior to

defined period of time of the policy to be pursued during the period for the

purpose of attaining a given objective).

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 INTRODUCTION
There have been dramatic changes in the meter industry over the past years

and it is like that the trend will bring even more changes as the environment and

industrial condition have become vehicle, there is increasing and over changes

competitive threat a especially from overseas. In addition, the role of

management accounting as a primary supplier of information to management is

of considerable important to achieve the satisfaction of the conflicting needs.

2.2 HISTORICAL REVIEW OF MANAGEMENT ACCOUNT

Historically speaking, Johnson and Kaplan (1987) state that the origin of

modern management account can be traced to the emergence of managed

hierarchical enterprise in the early nineteenth century. They went further that the

emergence and rapid growth of railways in the mid nineteenth century was the

major driving force in the development of management accounting system.

Johnson and Kaplan conducted that management accounting system evolve to

motivate and evaluate the efficiency of internal processes and not to measure the

overall profit of these organization, a separate financial profits of this

organization. A separate financial accounting system recorded transactions for

preparing annual financial accounting statement for the owners and creditors of

8
the firm. Thus the two systems, management and financial accounting operated

independently of the each other.

During the late 1980’s criticisms of current management accounting

practice were wide publicized in the professional and academic accounting

literature. The principal criticisms of current management accounting practice

can be summarized the following headings:

i. Conventional management accounting does not meet the needs to today’s

manufacturing and competitive environment.

ii. Traditional, product costing system provide information for decision

making purpose.

iii. Management accounting focuses almost entirely on internal activities and

relatively little attention is given to the external environment in which the

business operations.

iv. Management accounting practices follow and have become subservient to

financial accounting requirements.

As a result of various criticisms, the chartered institution of management

accounting commission on investigation to review the state of development and

of various claims published by Bromwich and Blimonin (1989) in a book titled

“management accounting”. Evaluation not revolution, they concluded that the

evidence and arguments advanced by advocates of wholesale changes in

9
management accounting are not yet sufficient to justify the whole soil revision of

management accounting.

2.3 DEFINITION OF MANAGEMENT ACCOUNTING

CIMA’s official terminology defines management accounting as the

application of professional knowledge and skill in the preparation and present of

account information so as to assist management in the formulation of policies and

in planning and controlling of the activities of a business enterprise.

Based on the aforementioned definition, the focus of attention in

management accounting is the provision of reliable and sufficient information

instructive to posit that different in decision making. It is however instructive to

post that different of information will be required by different cadre of decision

maker because of the following reasons.

- Nature of decision to be taken

- Timing of decision

- Cost and benefit analysis of the required information

- The corporate objectives to be achieved

- Organization structure

- Education background and level of experience of decision maker

- Different in human perspective to life

It is therefore necessary to classify to life the information needs of management

from the view point of organizational structure as follows:

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 i. Strategic information for top management

ii. Tactical information for middle management

iii. Operational information for low management

2.4 ESTABLISHMENT OF EFFECTIVE MANAGEMENT ACCOUNTING SYSTEM

For management to establish effective account activities in a business

organization it involves a lot of procedure to be put on ground. This is because,

they need correct information from the management, financial and cost

accounting to enable them to achieved their designated goals. So management

audit should be used to facilities control in an organization, this management or

performance audit helps managers to do better job by identifying waste and

inefficiency and recommending correct measure on:

i. The nature and function of the organization and managerial system.

ii. The effectiveness and efficiency with which the organization services are

provided.

iii. The effectiveness of the organization performance in achieving objectives.

iv. An analysis of financial statistic, unit cost and other performance by

comparing past statistic and other organization of similar character.

2.5 MANAGEMENT AND DECISION MAKING EXERCISE

Information may be supplied by the accountant by the financial decision

rests with management to study and undertake the rational behind the accounts,

suggestion and figure. He should bear in mind that every solution suggestion

11
there is in mind that every solution suggested there is an alternative, its aim

should therefore be to identify the possible alternative and their effects.

At the decision stage, both quantitative and non-quantitative information

received must be well considered. The calculations made both the management

account are not a substitution for the judgment to be exercised by the

management who must accept responsibility for any decision aid. Having

obtained the information considered necessary, the management must take any of

the following step:

1. To defer the suggested action until further events, to indicate the correct

course of action is ascertained.

RELEVANTAND IRRELEVANT COSTS

It is important for the management accountant to distinguish between

relevant and non-relevant cost of decision making purposes.

2. To request additional information: This is possible when the available time

and cost of getting the additional information is accepted. To make a

temporary decision.

3. To make a final decision and take action accordingly.

2.6 COSTS VERSUS DECISION MAKING TECHNIQUES

The need for the decision arises in business because a manager is faced

with problem and alternative course of action are available. For every decision

there is an associated cost be it tangible or otherwise. A decision is therefore only

12
worthwhile if the benefits derived from such a decision making are one which

provides a satisfactory solution to that problem. In deciding to choose which

alternative is the best, the manager will desire all the information which is

relevant to his decision, and provide the best alternative. These costs can be

treated under the following headings.

Relevant and Irrelevant Costs

It is important for the management accountant to distinguish between

relevant and non-relevant cost of decision making process. The ability to make

this decision enable him to concentrate solely on these costs which are affected

by the decision and therefore be include in the analysis.

Horn green defines or relevant cost as “expected future cost which differs

among alternative which such cost is relevant to a particular decision”. The

essence of this is that if a cost is unaffected by a particular decision, it is not

relevant to that decision, and be omitted from the analysis. Put simply, relevant

cost are those cost which are pertinent to decision making situation, there are

future cost that will differ under given alternatives.

Irrelevant cost on the other hand are the cost which are not irrelevant to the

decision making e.g. in a decision whether or not to replace an machine with a

new one. However irrelevant cost can be a basis for predicting future cost, and so

13
many included in the cost comparisons for decision providing that they are

include properly and do not mislead the decision maker.

Cost can be classified into:

Differential Cost: Differential cost concept is a relevant cost concept in those

decision situation which involved the alternative choices. Differential cost is the

difference in the total cost, fixed cost and variable cost of two alternatives. E.g. If

alternative A cost N200, 000 and alternative B cost N200,000. The different of

N20,000 is the differential cost. This technique is used to prepare information for

decision making, where only the differences in cost and income between

alternative courses of action are stated.

i. Opportunity cost: An opportunity cost is a sacrifice of vatic from a

missed opportunity when one course of action is chosen, then the other

possible benefit cost, from the perfected alternative is the opportunity cost

of the alternative accepted. In making decision, the manager should not

only consider the cost and benefit of the proposed alternative, but also the

profit that will be sacrificed in making the decision. The underlying logic

opportunity cost is that management must evaluate all possible opportunity

and commit resources to the best, the most profitable available

opportunity.

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ii. Sunk cost: Sunk cost are incurred in the past, they are the result of the past

decision and they cannot be changed by future decisions, since they do not

influence future decision making. They are regarded as irrelevant costs

unavoidable and irrecoverable historical costs. Investments in fixed asset

are example of sunk costs. As soon as a fixed asset has been installed, its

cost is sunk. The amount of cost cannot be changed. The management may

either use the asset and generate revenue and recover the cost or sell its

revenue and recover the cost or sell its tresses market value. Sunk cost –

poor value – salvage value.

iii. Inputting cost: Inputting cost is the cost or value ascribe to a resource

used of a service. Which does not entail cash outlay? e.g. Interest on owner

equity,

iv. renal value and premises owned by the firm, actual interest on the

concessions, loan granted by the financial institutions loans granted by the

financial institutions, loss asset cost and opportunity cost may sometime be

used changeably.

v. Replacement cost: In accounting records, assets are recorded at book

value. At the time of purchase, the cost of an assets time of purchase the

cost an asset represents its market value. However, if the asset used to be

replace sometime in the future, it market value would be different from

15
 what it was the asset was originally purchase. Replacement cost is the

amount that the firm would have to spend, if it were to replace its asset in

current condition. Replacement cost is a relevant cost concept when

financial statements have to be adjusted for inflation.

2.7 EFFECTS OF WRONG DECISIONS

According to Maurice Spice (1975) two basic characteristics of decision

maker are:

1. He is clearly that he is in a choice situation i.e. he recognizes more than

one alternative course of action and fells reasonably certain that if he takes

any of them, he can predict its outcomes with reasonably certainly.

2. He is able to make a ranked preference selection between these courses. He

preferences are in a logical and consistent order.

General speaking, decision making is where the manager must prove his

worth-making is his management accountant. In fact, every aspect of an

organization requires decision to be taken and these decisions retaken either by

individual managers or generally by management.

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 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION
Research is simple the process of arriving at dependable solutions to the

problems through planned and systematic collection, analysis, and interpretation

of data. Research is a most important tool for advancing knowledge, for

promoting process and foe enabling man to relate more effectively to his

environment, to accomplish his purpose and to resolve his conflicts.

The procedure applied in gaining or obtaining information regarding this

research through observation method, questionnaire method, oral interview

method and document any resources. More emphasis is placed on observation,

questionnaire method, few question were asked on the questionnaire method, few

questions were asked on the questionnaire sheet to tick ‘yes or no’ such gives less

or little information which need to be obligated for information purpose.

As already discussed above, research is simple the process arriving

(investigation) of a dependable solution of a given problem, the selection of

method such investigation of a given problem is key consideration for the

investigator. According to Osuala, there are basically three classification of

research.

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The Historical Research Method: The method of research interprets past

friends of attitude, even and facts. Osuala (1993:137) argues that history is an

integrate narration or description of past events or facts written in a spirit of

critical inquiring for the whole forth. The historical method of research has its

purpose as:

i. It to gain a clearer perspective of the present, it is generally profitable to

acquaint ourselves with the history if we really in appreciate measure.

ii. It can provide us with hypothesis for solution of current problems and also

with a greater appreciation of the cultural and the role which new

knowledge can play in the progress of society.

Descriptive Research Method: This is the research which specifies the nature of

a given phenomenon. The specification can be simple or it can be complicated,

the importance of descriptive in the social science well as in other fields of

education endeavor.

(Oshoiler 1993; 145) descriptive research gives a picture of a situation or a

population. Any consideration of phenomena generally begins with a full

understanding of the phenomena. Accurate descriptive are imperative = for

making a wide range of police decision. The confusion of descriptive research

with decision making or policy formulation is common.

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The Experimental Research Method: Experimentation is the most scientifically

sophisticated research method. It is often confused with the scientific method by

the layman who equates experimentation with the physical sciences and further

equates the physical sciences with sciences.

The purpose of experimentation is to derive varieties functional

relationships among phenomena under controlled conditions. More simply, it is

used to identify the condition underlying the occurrence of a given phenomenon

from an operational point of view.

The Survey Research Method: Survey research method studies both large and

small population by selecting and studying the sample chosen for the population

and psychological variables. Surveys are oriented towards the determination of

the status of a given phenomena rather than towards the isolation of causative

factor. A fairly clear time of demarcation can be drawn between survey studies

and historical studies on the basis of time.

3.2 RESEARCH DESIGN

According to James R. Taylor (1983) “Research design is the plan which

guides the data collection and analysis phases of research project. It is the

framework which specifies the type of information to be collection, the sources

of data and the collection procedure”.

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 Thus, the research design specifies the framework for controlling the data

collection, the main function of the research designs is to ensure that the required

data are collected economically and with high degree of accuracy.

The structure of the research shows the followings:

a. The interrelationship of variables

b. How objective are attained

c. The problems encountered

d. How such problems were tackled by the research

The research design has been carefully prepare to ensure minimum base in the

collection of data needed so as to reduce errors to the barest minimum.

3.3 POPULATION OF THE STUDY

A population is made up of all conceivable element, subject or

observations relating to a particular phenomena of interest to the research.

For the purpose of this work, the population of study is restricted to the

staff of the accounting department, production department, and sales department

of EMCON Nigeria Plc.

3.3 SAMPLE SIZE

The major function of sampling is to obtain external validity, in addition.

Sampling the practical purpose of marking possible the study of problem which

otherwise could not be undertaken due to prohibition of cost time, personal or

scope. However, sample size determination is the mathematical process of

20
deciding, before a study begins how many subjects should be studies? Sample

size calculations for research projects are an essential part of a study protocols for

submission to ethnical committees, research funding bodies and some peer

review journals. But putting aside the requirement of various bodies, why is it

important to determine the sample size prior to study commencement.

3.5 METHOD OF DATA COLLECTION

More emphasis has been placed on the personal interview method. The

methods used for data collection for the purpose of this research as already, stated

with the observation method questionnaire method, oral interview and

documentary.

i. Primary Method: Under this method, the researcher uses the tow sources

namely questionnaire and interview viz;

a. Questionnaire: Relevant questionnaires the question were framed to suit

the topic under consideration. To assist in the answering of the

questionnaire were distributed to the senior officers of the finance

department of EMCON. Also some officers in the department whose rich

idea about EMCON would be great help to this study. After filling the

questionnaire with necessary answers supplied then analysis stage

followed which lead to the interview stage. The sample of the

questionnaire is found at his appendixes section of this project.

21
 b. Interview: The appropriate answer extracted from the questionnaire were

of considerable help toward the interview exercise of some selected

officers of the company, who at their convenience, their response to the

question raised during the interview cleared many unsolved issues that

cannot be inserted in the questionnaire.

Also, interviews are those who act as the middlemen between buyers. The

interview was conducted at some collected markets and of course some buyers

were also interviewed to known their reaction to use the performance of the

company in general.

c. Observation: In this method, the researcher on several on occasion

witnessed the payment of wages and salary to the workers and staff of the

company, the task of which management accounting system oversees.

Also observed is the information processing system of the established and the use

of which management desired from it.

ii. Secondary Method: For the purpose of this, documentary research works

were the secondary of data collection is used. Relevant materials were

obtained from text books, journals, lecturer notes and findings of EMCON.

Financial Statement and Report: This method is generally helpful in collected

of relevant financial data about the company to examine the manner with which

management accounting techniques are applied in the preparation of the financial

22
statements. This involved reaching through the existence of financial statement

and report such as is contained in the company’s annual report and accounts, for

the purpose of this project, sample percentage analysis technique.

3.6 METHOD OF DATA ANALYSIS

This chapter presents historical background of the case study. EMCON and

the impact of accounting information system of the survival of EMCON. The

data collected during the course of study would be presented and analysis in the

form of tabulation and explanation of the data collected through the primary and

secondary sources, shall be analysis and compares with the hypothesis and

finding shall be stated, but should be noted that only the important question the

relate to the objective of the research work are used. Also in order to analyze

responses based on the questionnaire administered.

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 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION
Analysis and interpretation of data are the central steps in the research

process. The goal of analysis is to summarize the collection data in such a way

that they preside answer to the research question interpretation refers to the

research implication of the answer within the broadcast framework of existing

knowledge Asika (2004).

The role that analysis on data collecting for the purpose of a research

project of this kind is of utmost importance hence cannot be over emphasized.

This is because it enhances the research made and gives a scientific taught of

report and findings of the research exercise, for any research to be useful, the data

for such research must be interpreted in the light of the condition under which it

was carried out.

.
4.2 DATA ANALYSIS
Analysis of data collected through questionnaire administrated to the

EMCON officials and their customers. The aim therefore is to present analysis

and interpret the data obtained from the questionnaire distributed. Here

percentage meet God is used in aiming at any statistical references.

Table 4.1: Does the organization pay higher salaries so as to maintain the most

of their professional staff?

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 Responses Respondents Percentage

Yes 6 60

No 4 40

Total 10 100
Source: Researchers Survey, 2015
In the above, it was observed that 60% of the respondents agreed that the

organization pay higher salaries so as to maintain most of their professional staff

while 40 of the respondents were in opposition.

Table 4.2: What type of budget does the organization maintain?

Responses Respondents Percentage

Zero based 7 70

Yearly standardized 2 20

Half yearly 1 10

Total 10 100

Source: Research’s Survey, 2015

The table above shows that 70% responses says zero based budget 20% yearly

standardized budget and 10 half budget.

Table 4.3: Does the management maintain a regular communication with both

the middle and operational management staff?

Responses Respondents Percentage

Yes 8 80

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 No 2 20

Total 10 100

Source: Researcher’s Survey, 2015

From the table above, 80% of the respondents said the middle management

control the production of their goals while 20% were in opposition. The

dedication here the middle management control the production of their goods.

Table 4.5: How does the organization determine the selling price of their

product?

Responses Respondents Percentage

By balloting - -

By fixing price 6 60

Through market survey 4 40

Total 10 100

Source: Researcher’s Survey, 2015

The table shows that 60% of the respondent agreed the organization determine

the price of their product but fixing the price while 40% of the respondent said is

through market survey the dedication were is, that the organization determine the

selling price of product by fixing the price.

Table 4.12: Indicate from which source do you source financing?

26
 Responses Respondents Percentage

Commercial bank 9 90

Merchant Bank 1 10

Total 10 100

Source: Researcher’s Survey, 2015

The table shows that company obtain their source of financing from commercial

bank, since 90% agreed only 10% with merchant bank.

Table 4.13: Do you lease some of the equipment used in the company?

Responses Respondents Percentage

Yes 2 20

No 8 80

Total 10 100

Source: Researcher’s Survey, 2015

From the table 20% of the respondents agreed that company lease it equipment

with 80% does not agreed that, the company lease its equipment the dedication

here is the company does not lease some of the equipment used in table.

27
Table 4.14: Does the company annual budget includes cash forecast?

Responses Respondents Percentage

Yes 3 30

No 7 70

Total 10 100

Source: Researcher’s Survey, 2015

From the above table, 70% of respondents said cash forecast while 30% of

respondents said it includes cash forecast. The dedication here is, the company’s

annual budget does not include cash forecast.

Table 4.15: Have you ever encountered problem in applying some management

accounting techniques principles?

Responses Respondents Percentage

Yes - -

No 10 100

Total 10 100

Source: Researcher’s Survey, 2015

The table above shows that the company’s management accounting

techniques/principles.

28
Table 4.16: Does if the company put in place an effective internal control?

Responses Respondents Percentage

Yes 10 100

No - -

Total 10 100

Source: Researcher’s Survey, 2015

The table above shows that the internal control systems have been adhered to.

4.4 FINDINGS OF THE STUDY

When carrying out this research work. It was that through responses from

questionnaire and personnel interview, some of the problem associated with

Electricity Meter Company of Nigeria is neglecting the implication of modern

management concept of principles in the operation. It is true that companies

cannot operate successfully and properly in an economic environment such as

ours without necessary considering the management accounting implications.

There is also the problem of production they hardly make production these

days, because most of their machines are too old and outdated.

For the company to continue with the production, most of the machines

that are new machines purchase. Their sources of financing are from commercial

bank.

29
4.5 SUMMARY FOR THE FINDING
From the foregoing analysis, it is detected that:

i. EMCON, help NEPA solve their ever-increasing need for efficient

generation and distribution of electricity in Nigeria as well as the accurate

billing of it customers though accurate, metering of energy.

ii. It obtain source of finance from commercial banks.

iii. Change in government policy affect organization management and costing

system especially if there is change in exchange rate. Tariff system

insurgence.

30
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 INTRODUCTION
This chapter gives summary of the research work, draw logical conclusion

and proffer some value able recommendation for government and management of

accounting techniques as specifically Electricity Meter Company of Nigeria

Limited.

5.2 SUMMARY
Chapter one of the project assessed the role of management accounting in

the managerial function of planning, control and decision making and more

specifically how the management of EMCON have been able to utilize the

management and information in planning, control and decision as means of

bringing it to its maximum. The aims of study, statement of problem are stated in

this chapter alone with the scope and significance of the study were clearly

stated, to give a clear view of the research topic.

Chapter two give an insight of related in the literature of the field and

various writers on management accounting with different definition of

management accounting and term related to it.

In chapter three of this research discussed the method of data collection,

population and instrument used for gathering of information on theory practice of

data analysis.

31
 Chapter four deal with data presentation and analysis, it was discovered

that the company’s main objective is profit maximization and other objective

were considered as strategic options.

Chapter five consist of the summary of the chapters of the work,

recommendation on EMCON as contained in the study with way as of helping in

bringing dynamic change in the operation of manufacturing companies in

Nigeria.

5.3 CONCLUSION
One can conclude by saying that management accounting is an important

management tool which aid management in planning, control and decision

making. A sound management accounting system is therefore vital in any

organization.

In recognition of the statement above the problems of Electricity Meter

Company of Nigeria have been traced to the following factors:

Neglecting the implication of modern management concept or technique in

its operation, hence its ability to generate enough funds that would enable it to

adapts to constant change in the meter manufacturing.

Change in government policy would affect that organization costing

system especially in their exchange rate, tariff system, insurances, like in local

petroleum price and part and handling charges, etc. which will result to a very

32
high increase in the price of the raw materials. The costing system in this aspect

will not be realistic especially where the weighted average system is being used.

Accident could occur as a result of importation through sea act from

Switzerland. Inadequacy of utilities and other infrastructure like water and

electricity supply affects the companies.

The machinery being used by Electricity Meter Company Nigeria Limited

are far too old and outdated. This result to constant break down of machines with

cost and loss of production involved. There are also shortages of parts as some

old machines are no longer producing for example prepayment meter and cm

meter are too longer produced but instead CL- series of meter is currently

produced.

5.4 LIMITATION
Due to the limited time allocated to this research an extensive analysis of

the management system of the organization may not be possible.

I encountered the problem of insufficient funds. It was not an easy task

carrying out a research project in the outskirts of Zaria. A lot of money was sunk

into transportation and other travelling expenses.

Non-availability of adequate data especially for reasonable length of time.

This was partly due to the organization policies as regards the release of

information despite the assurance that all the information discussed would be

treated as confidential.
33
5.5 RECOMMEDNATIONS
Based on the observations and findings available data arising this work

(research), it is necessary that propose the following major recommendations

which I feel and contribute meaningfully to the enhancement of management

accounting in management planning control and decision making. In the height of

the problems facing Electricity Meter Company of Nigeria Limited, the following

recommendations are made.

In a company of EMCON’s status cost and waste control shall be some of

the strategic objective of both the board of directors and top management

officials. Others include:

1. The weighted average system of valuation of stock in use in the company

should continued.
2. The lag period of stock into the store should be clearly specified and more,
manpower is needed in the costing section.
3. Comparative analysis should be on monthly basis instead of quarterly
basis. Also management should introduce performance evaluation not only
at the end of the year but anytime the need arises.

34
REFERENCES

Adeniyi A.A. (2001): An Insight into Management Accounting Value Analysis;

Adeniyi A.A. (2002): Simplified Management Accountant Value Analysis

Consult (Publisher).

Athol S.C. (1967): Accounting Standard and Profession: Pitman Publish House,
U.K.

Benthey T. (1996): Accounting Standards and Business. The Piper of the 1990’s

Block S. (1994): Management Accounting Standards, Pitman Publish UK.

Bromwich M. and Bhimoni A. (1994): Management, Accounting: Pathway to

Progress.

Charles , T.H. (1950): Cost Accounting: A Managerial Emphasis, Prentice Hall.

Cydugs J.P. (1975): International Journal of Accounting, Research and

Education.

Druncy C. Braund, Osborne, S.P. and Tayles M. (1993) A Survey of

Management Accounting Practice in UK Manufacturing Company ACCA.

Emmanuel C. Merchant A. and Outlay D.T. (1990): Accounting for Management

Control, Chapman and Hall.

35
Horngren C.T. Fooster G. and Datta (1994): Cost Accounting: A Managerial
Emphasis.

Ibrahim F.O. (1994): Principle of Finance: J. Age Kome Co-publishers, Zaria

Jain, S.P. and Morang K.C. (1998): Advanced Cost Accounting, New Delhi,
India.

Moore P.G. Thomas H. (1991): Anatomy of Decision, Penguin.

Nwagboso J.C. (2002): Cost and Management: A thematic Approach.” NCA Jos.

Saidu I.H. (2006): Management Accounting: For Planning Control and Business
Decision, Book Makers International, Kaduna.

36
 APPENDIX

1. Does the organization higher salaries so as to maintain most of their

professional staff? Yes ( ) No ( )

2. What types of budget does the organization maintain?

_________________________________________________________

3. Does the management maintain a regulation communication with both

their middle and operational management staff? Yes ( ) No ( )

4. Does the middle management control the production of their goods?

Yes ( ) No ( )

5. How does the organization determine the selling price of their goods?

_________________________________________________________

6. Does the organization management easily takes directive from the top

management? Yes ( ) No ( )

7. Does the organization use imported and local raw material? Yes ( ) No ( )

8. Does the organization have adequate working materials? Yes ( ) No ( )

9. Does the top management meet the welfare back age of the operational

management in order to boost their moral? Yes ( ) No ( )

10.Is the company accounting, policy different from its operational policies?

Yes ( ) No ( )

11.How often does the company undertake capital project?

__________________________________________________________
37
12.Indicate from which source do you obtain your source of finance (tick?)

a) Commercial Bank ( )

b) Merchant Bank ( )

c) Development Bank ( )

13.Do you lease some of the equipment used in the company? Yes ( ) No

( )

14.If yes, what duration does the lease arrangement takes (tick)?

a) Below one year ( )

b) Below two years ( )

c) Below Five years ( )

d) Below Five years ( )

15.Does the company’s annual budgets include cash forecast? Yes ( ) No

( )

16.If yes, how does government policies (in terms of interest rate and other)

monetary policies) affect the liquidity position of the company?

__________________________________________________________

17.Profit is the main motive of a company; do you consider profit planning

more than liquidity planning in your company? yes ( ) No ( )

18.Have you ever encounter problems in applying some management

accounting/principles? yes ( ) No ( )

38
 If yes, list some of the problems

____________________________________________________________

____________________________________________________________

_________________________________________________________

19.Does the company put in place an effective internal control? yes ( ) No

( )

20.If yes, is it adhered to? yes ( ) No ( )

39