THE ROLE OF ACCOUNTING INFORMATION IN PRODUCTION

DECISION MAKING; A CASE STUDY OF UNGA LTD COMPANY IN

ELDORET.

NAME : MERCY AMOIT

INDEX NO : 5780011059

COURSE CODE :2804

DEPARTMENT :BUSINESS STUDIES

INSTITUTION : THE ELDORET NATIONAL POLYTECHNIC

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILLMENT FOR THE AWARD OF DIPLOMA IN
ACCOUNTANCY.

SUPERVISOR : MR. WAMEYO DANIEL

EXAM SERIES : JULY 2022

i
 DECLARATION

I hereby declare that this project is my original work and has never been submitted to any
other institution for any academic award.

NAME: MERCY AMOIT

SIGNATURE:_________________________ DATE: ___________________

SUPERVISOR

This project has been submitted to the Kenya National Examination council with my
approval as the college supervisor.

NAME: MR. DANIEL WAMEYO

SIGNATURE:__________________________DATE: ___________________

ii
 DEDICATION
I dedicate this work to all my family members and my colleagues who gave me humble time,
moral and financial support. God bless you all.

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 ACKNOWLEDGMENT
I wish to acknowledge Almighty God for granting me the privileged and strength throughout
my academic life.

I also wish to acknowledge the work of my supervisor Mr. Makori for his unconditional
advice and support that remained a constant encouragement throughout my research project
writing period. My gratitude to all my entire family members for their untiring support. God
bless you all.

iv
 TABLE OF CONTENTS
DECLARATION.......................................................................................................................ii

DEDICATION..........................................................................................................................iii

ACKNOWLEDGMENT...........................................................................................................iv

LIST OF TABLES/FIGURES.............................................................................................viii

ABSTRACT..............................................................................................................................ix

CHAPTERONE......................................................................................................................1

1.1 INTRODUCTION.............................................................................................................1

1.2 BackgroundOfThe Study..............................................................................................1

1.3 Statementoftheproblem......................................................................................................2

1.4 PURPOSE OF THE STUDY.................................................................................................3

1.5 Objectives of the study.......................................................................................................3

1.6 Researchquestions..........................................................................................................3

1.7 Scopeofthestudy...........................................................................................................3

1.8 Significanceofthestudy.......................................................................................................3

1.9 Assumptions of the study................................................................................................4

1.10 Limitations of the study..................................................................................................4

1.11 Definitionofterms..........................................................................................................4

CHAPTER TWO....................................................................................................................5

LITERATUREREVIEW...........................................................................................................5

2.1 Introduction.........................................................................................................................5

2.2 Usersofaccountinginformationinanorganization.........................................................5

2.3 Qualities of good accounting information that influences effective production

decision making of anorganization.........................................................................................7

2.4 Accountinginformationandproduction decisionmakingofanorganization.......................8

CHAPTERTHREE................................................................................................................11

METHODOLOG Y................................................................................................................11

3.1 Introduction.....................................................................................................................11

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3.2 ResearchDesign..........................................................................................................11

3.3 Areaofstudy.................................................................................................................11

3.4 Population....................................................................................................................11

3.5 Samplesize....................................................................................................................12

3.6 Samplingtechniques.....................................................................................................12

3.7 SourcesofData..............................................................................................................13

3.7.1 Secondarydata..........................................................................................................13

3.7.2 Primarydata:.............................................................................................................13

3.8 Datacollectiontools......................................................................................................13

3.8.1 Questionnaire...........................................................................................................13

3.8.2 Interviews.................................................................................................................13

3.9 ProcedureofDataCollection.......................................................................................14

3.10 Validityandreliabilityofdata........................................................................................14

3.10.1 Validityofthedata......................................................................................................14

3.10.2 Reliabilityofthedata..................................................................................................14

3.11 Dataprocessing,dataanalysis,presentation..................................................................15

3.12 EthicalConsiderations..................................................................................................15

CHAPTERFOUR.................................................................................................................16

PRESENTATION,ANALYSISANDINTERPRETATIONOFTHEFINDINGS...............16

4.1 Introduction.......................................................................................................................16

4.2 Generalinformationoftherespondents............................................................................16

4.2.1 Genderofrespondents...............................................................................................16

4.2.2 Ageofrespondents....................................................................................................17

4.2.3 Maritalstatus.............................................................................................................18

4.2.4 Educationlevelofrespondents..................................................................................19

4.2.5Categoriesofrespondents................................................................................................25

4.3Presentationsoftheresearchfindingsaspertheresearchobjectives..........................................30

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CHAPTERFIVE...................................................................................................................36

DISCUSSION OF THE FINDINGS, SUMMARY, CONCLUSIONS

ANDRECOMMENDATIONS..............................................................................................36

5.1 Introduction.....................................................................................................................36

5.2 Discussionofthefindings:.................................................................................................36

5.2.1 Theusersofaccountinginformation...............................................................................36

5.2.2 The qualities of good accounting information that influence effective production
decision makingofUnga Ltd CompanyEldoret.....................................................................37

5.2.3 The relationship between accounting information and production decision making
in Unga Ltd CompanyEldoret................................................................................................38

5.3 Summaryofthefindings.....................................................................................................39

5.3.1 Theusersofaccountinginformation................................................................................39

5.3.2 Thequalitiesofgoodaccountinginformationthatinfluenceeffectiveproduction
decisionmakingofUnga Ltd CompanyEldoret......................................................................39

5.3.3 Therelationshipbetweenaccountinginformationandproduction
decisionmakingofUnga Ltd CompanyEldoret......................................................................40

5.4 Conclusion.......................................................................................................................40

5.5 Recommendations............................................................................................................41

REFERENCES.........................................................................................................................42

APPENDIX1:INTERVIEWGUIDE.....................................................................................44

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 LIST OF TABLES/FIGURES
Table3.1:Showingcompositionofthesamplesize.............................................................................1.5
Table4.2:ShowingtheGenderofrespondents....................................................................................19
Table4.3:Showingtheageofrespondentsparticipatedin thestudy.....................................................20
Table4.4:Showingmaritalstatusoftherespondents...........................................................................21
Table4.5:Showingeducation levelofthetargetrespondents..............................................................22
Table4.6:Thedifferentcategoriesofrespondents..............................................................................24
Table4.7:Showingthetypeofinformationneededbytheusers............................................................26
Table4.8:Showingthereasonswhytheusersneedtheinformation......................................................27
Table4.9:Showingthechallengestheusersfaceingeneratingthisinformation.....................................28
Table4.10: Theusersof accountinginformation..............................................................................29
Table 4.11 : The qualities of good accounting information that influence effective
decision1nakingofUnga Ltd CompanyUganda.......................................................................................3.1
Table 4.12 : The relationship between accounting information and decision making ofUnga Ltd
CompanyUganda............................................................................................................................33

Figure4.1:ShowingtheGenderof respondents……………………………………………...20
Figure4.2:Showingthe Ageofrespondents………………………………………………….21
FigureA.3:Showingthe Maritalstatusoftherespondents……………………………………22
Figure4.4:ShowingtheEducationlevelofthetargetrespondents…………………………...23
Figure4.5:Showingworkingexperienceofthetargetrespondents…………………………..23
Figure4.6:ShowingtheNumberofrespondents……………………………………………..25
Figure4.7:Showingthetypeofinformationneededbytheusers……………………………26
Figure4.8:Showingthereasonswhytheusersneedtheinformation………………………..27
Figure4.9:Showingthechallengestheusersfaceingeneratingthisinformation…………… 28

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 ABSTRACT
Thestudyfocusedontherole of accounting information in production decision making. The study
was carried out in Unga Ltd Company, Eldoret, Kenya. The
objectivesofthestudyweretoexaminetheusersofaccountinginformation,thequalitiesofgoodaccounti
ng information that influence effective decision making and the relationship betweenaccounting
informationand production decisionmaking inUnga Ltd Company, Eldoret.Related literatureon
qualitymanagement and financial performance of an organization was reviewed. Cross-sectional
studydesign was chosenbecause it was the most appropriate given the nature of the objectives
andlimited time available to conductthis research. Qualitative and Quantitative research
designswere used and processedusing qualitative models to show what existed at Unga Ltd
Company, Eldoret. Asample of 25 respondents was selected using simple random sampling
technique together
withpurposivesamplingwhichhelpedtheresearcherselectrespondentsofdifferentcategories.
A population of 40 individuals was chosen in which a sample of 25 respondents was
selectedusing purposive and simple random sampling technique. Primary data was collected
using closedendedquestionnaireswithquestions draftedfromtheobjectives
ofthestudyratedusingthe 5point like11 scale and secondary data was collected from the
secondary data sources
waspresentedusing,frequencytablesandanalyzedusingfrequencytabulation.

The study found out that various individuals in accounting department, suppliers,
governmentagencies, employers and their union representatives, managers need accounting
information.
Thefindingsindicatedthatgoodaccountinginformationmustberelevant,shouldachievecostbenefits
balance, timeliness is required for good accounting information; it must be accurate,clarity and
conciseness. The study concluded that the information supplied by the accountantshows the
effect of risk and uncertaintyand the range of likely production decision making outcomes.
Therecommendationwasmadethat Unga Limited CompanyEldoret,
Kenyashoulduseaccountinginformationsystemseffectively to verify the accuracy of accounting
information provided by the accountants and
aprecedentdatabaseshouldformulatetheaccountingstandardsbasedonthesystemsofmanagement.
Further studies should be conducted on the effect of accounting information on

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 CHAPTERONE
1.1INTRODUCTION
Thischapterpresentsthebackgroundofthestudy,statementoftheproblem,
purpose,generalobjectives,specificobjectives,researchquestions,scope,significanceanddefiniti
on of keyterms.

1.2 BackgroundOfThe Study

Accountingisconcernedwithprovidinginformation,whichwillhelpproduction
decisionmakerstomakeproduction
decisions.Toenhancecreditabilityandutilityoftheinformation,theproduction decisionmaking
process,establishedconcepts,principles,standardandlegalrequirementsarestrictlyfollowedinord
ertotranslatephysicalfactsintomoneyvaluesandensuresthatalltypesofr e p o r t s areintegratedan
dpreparedonconsistentbasis,Weber(2010).
Makingtherightproduction
decisiondependsonthepossessionofappropriate,accurateanduptodateinformationprovidedandpr
esentedinameaningfulway.Thisstudysetouttoexaminethecontributionofaccounting
information in production production decision makingindealingwithproduction
decisionproblemsthatarisesfromtheirorganizationaloperations,Stuart2015.Theinformationprov
idedbyfinancialstatement,cashflow,variance
analysis,managerialcostinginplanning,organizingproduction decision-
makingandcontrolareinvaluabletoachieveobjectivesofthevariousinterestgroups.Inspiteofallthe
arraysofaccountingtoolsatourdisposal,organizationsstillwobble,troubledownthedrainMachael(
2011).
Thecomputationandinterpretationofanalyticalratiosfromfinancialstatementenableorganiza
tiontodeterminetheiroperationtrendsandprovideabasisforproductionproduction
decisionmaking.Otherusersoffinancialanalysisareusedinmakingfinancialproduction
decisionandachievingthegoalofsustainabilitydeterminescompliancewithregulatoryrequire
ments.Financialanalysisisaninvestmentthathaspositivereturninthefutureonhowproduction
decisionwillbemade,howtomanagethefinancestoachievethestrategicgoalsoftheinstitutiont
hroughproduction decisionmaking,Weber(2010).

1
 AccordingtoStuart(2012),Manypeoplethinkthataccountingasahighlytechnicalfieldwhichcanbe
understoodonlybyprofessionalaccountantsactuallynearlyeveryonepracticesaccountinginonefor
mortheother.Inmoderntimes,management
requiresawidevarietyofinformationtosuccessfullyaccomplishitsaimandobjectives.Thisinformat
ionismainlydeterminedbytheelementof uncertainty
aboutthefutureandlackofknowledgeaboutthepresent.Someoftheseproduction
decisionsareofstrategic importance
havingalargeimpactonthebusiness;othersareroutineoperatingproduction
decision,Machael(2010).Thereforeaccountinginformationisbasedonlaws
andregulationsgoverningthehandlingofaccountingreportcontainedinthefinancialrep01tsoforga
nization.Makingtherightproduction
decisiondependsonthepossessionofappropriate,accurateanduptodateinformationprovidedandpr
esentedinameaningfulway.
Unga Limited Companyisaregisteredcompanydealingwith food productionbasedinEldoret,
Kenya.Accountinginformationin Unga Limited
Companyisgenerallyusedbyexecutivestomakeproduction decisions,
developcompanystrategies,andgeneratereportsforshareholders,internalpersonnel,andregulator
yagencies,streamlineaccountingcyclesandreducetheincidenceofaccountingerrors.

1.3Statementoftheproblem
Unga Limited Company Compelstocarryoutagreatdealofbook-
keepingrecordsbasedonaccountingprinciplesandinformationprovidedwiththeperpetualincrease
inthenumberofconsumersofthecompany'sproducts,ithasbecomenecessarytodeviseasystematic
meaninhandlingtheresultantbook-keepingandaccountingactivities.Unga Limited Company,
Eldoret
facesthechallengesofproperandadequatecontemporalaccountinginformationformanagementpr
oduction
decision.Thecompanyitselftriestocoordinateallthesechallengeslyandefficientlysoastominimize
anyanticipatedandunanticipatedpitfalls,butthechallengesstillarise(Unga Limited Company,
Eldoretreport,2015).Accordingtothisreport,improperattentiontotheaccountingsystemandhandl
ingofaccountinginformationhasgivenbirthtothepoorplanningandproduction
decisionmaking,poororganizationandcontrolofbusinessactivitiesandinadministrativeactivitieso
2
 ftheorganization.Thisthereforehaspromptedtheresearchertoconductfurtherinvestigationonther
oleofaccounting informationonproduction production decisionmakingofthe organization.

1.4PURPOSE OF THE STUDY

The major purpose that lead to the research study is to investigate the role of accounting
information on production decision making, a case of Unga LTD company.
1.5 Objectives of the study

1. Toexaminetheusersofaccountinginformation

ii. Toexaminethequalitiesofgoodaccountinginformationthatinfluenceproduction
decisionmakingof Unga Limited Company.
iii. Toestablishtherelationship betweenaccountinginformation andproduction
decisionmaking ofUnga Limited Company.

1.6 Researchquestions

i. Whataretheusersofaccountinginformation?

ii. Whatarethequalitiesofgoodaccountinginformationthatinfluenceproduction
decisionmakingof Unga Limited Company?
iii. Whatistherelationshipbetweenaccountinginformationandproduction
decisionmakingof U n g a Limited Company?

1.7 Scopeofthestudy

Thestudywasbasedontheroleofaccountinginformationonproduction
decisionmakinginanorganization.Thestudyfocusedontheusersofaccountinginformation,thequal
itiesofgoodaccountinginformationthatinfluenceproduction decisionmaking
andtherelationshipbetweenaccountinginformationandproduction decisionmakingof Unga
Limited Company, Eldoret.

1.8 Significanceofthestudy

3
Thisresearchstudywillhelptomaximizethebeneficialimpactofaccountinginformationontheprod
uction
decisionmakingprocessofanorganization.Thisbooststheprofitabilityoftheorganizationaswellas
ensuringitscontinuityasabusinessentity.
Thestudywillhelpintheefficientallocationofscareresourcesthathavealternativebeinguseaswellas
increaseproductivity therebyupliftingthestandardofliving.Itwillreviewtheimprovementinthe
organizationorcompanyhandlingtheaccountinginformationandshowequallythewaysthroughwh
ichimprovementcouldbeaccomplished.
Infact,allinterestedgroupslikeshareholders,employers,investors,creditors,governmentetc.willb
enefitimmensely.Thisproject willequallyserveasareference tostudents who maybe
interestedtoembarkonaresearchofthisnature.
1.9 Assumptions of the study
It was assumed in the study that all respondents filled their specified questionnaires and gave
them to the researcher.

1.10 Limitations of 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
supportfromfamilymembersandrelativeswhoenabledhercarryouttheresearcheffectively.
The researcher faced a problem of limited cooperationfrom the respondents. This was due totheir
own reasons being that they had limited time and interest in providing the informationrequired.
However, the researcher explained the purpose of the research to the target
respondentsandconvincedthemverywellhencepa1ticipatinginthestudy.
Communicating to some target respondents was difficult due to cultural differences,
languagebarriers and differences in behaviors which were going to limit the research study.
However, toensureeffective communication, theresearcherused Englishlanguagewhichat least
everyliteraterespondentcomprehendedandthenlocallanguageforthosewithEnglishlimitation.

1.11 Definitionofterms

AccountingInformation:Thisisasystemdesignedtoobtainthefinancialpositionofan
organizationas attheendoftheperiod.
Information:Isaprocesseddatausedinobtainingdetaileddataaboutaparticularperson,thingo
4
 rplace.
FinancialInformation: Thisisinformationsummarizedbyacompany'sactivitiesoverthe
lastyear.Theyconsistoftheprofitandlossaccount,thecashflowstatementetc.

CHAPTER TWO
LITERATUREREVIEW
2.1Introduction
Thisliterature reviewprovides theconceptualarchitectureand theoreticalreview for
thisresearch by grounding it on prior knowledge. It is an attempt to review the existing
literaturerelatedtothestudy.
2.2 Usersofaccountinginformationinanorganization

Wahab (2013) stipulates that various individuals and institutions use the economic data that
aregatheredandcommunicatedbytheaccountingsystemforassistanceinmakingproduction
decisionregarding future actions. For example, investors in business enterprise need
information on thefinancial condition and result of operations of the enterprise in order to
access the profitabilityandriskoftheirinvestorsintheenterprises.
Bankersandsuppliersneedaccountinginformationwithwhichtoappraisethefinancialsoundness
of a business organization and to access the risk involved in making loan and grantingcredit.
Government agencies are concerned with the financial activities of business
organizationsforpurposeoftaxationandregulation,Meigs(2008).
Employer and their union representatives are virtually interested in the stability and
probabilityof the organizationthat hire them, Wilson (2014). The dependent individualswho
are mostinvolved with the end product of accounting are those charged with responsibility
of directingthe operations of the enterprise. They are often referred to as "management"
managers rely uponthe accounting information to assist them in evaluating current
operations and in planning futureoperations. Accounting is a language which communicates
financial information to people
whohaveaninterestinorganizationmanager,shareholderandpotentialinvestors,employees,credi
torsandthegovernment,Wilson(2014).
Managers require accounting information which will assist them in their production decision
5
making andcontrol activities for example, information needed on the estimated selling price,
cost, demandcompetitive position and profitability of various products which are made by
the organization.Shareholders require accounting information on the value of their
investment and the incomewhich is derived from their ·shareholding.Employees require
accounting information on
theabilityofthefirmtomeetwagesdemandsandavoidredundancies,Meigs(2011).
Creditorsand providers of loans capital require accounting informationon a firm’s ability
tomeet financial obligations, Levis (2011). Government agencies like statistical offices
collectaccounting information which is needed such as information for the detail of sales
activity, profitinvestments, stocks, and dividend paid, and the proportions of profits absorbed
by taxation and so on.In addition the Inland Revenue is needed in accounting information
for purpose of taxation. Allthese informationare importantfor determiningpoliciesto
managetheeconomy, Jackson(2016).
Accounting information is not confined to business organization as stated above.
Accountinginformation for the individual is also important. For example, credit will only be
extended to anindividual after the prospective borrower has furnished reasonable accounting
information of hisprivate financial affairs. Non -profit making organization such as local
authorities also requireaccounting information for production decision making and for
reporting the result of their activities. Forexample, a spo1t club with required information on
the cost of undertaking the various activitiesso that a production decision will be made on
the resources which must be used to finance them, Levis(2011).
An examination of the various users of accounting information indicates that they can be
sub -divided into two categories: Internal users within the organization and External users
outside theorganization. The above broad category of users into internal and external users
presupposes thatthey need the information for different purposes. Thus the kinds of
accounting information theyneed are also different. In fact accounting information system is
one of the largest informationsystemsinmostorganization,Jackson(2016).
Accountantsuse accountinginformationtoenhance theirrole within theorganization.
Theaccountant fought a constant battle against the failure of record. During the 1960s the
accountantwas able to respond tomanager's requests for repo1ts on the business activities.
Computersprovided a more efficient means of keeping the books, and they afforded the
6
accountant quickaccesstofinancialinformationforreportingpurposes(LeoBurnet,2012).
Useful financial reporting establishment is based on accounting information. Many
traditionalaccountingtasksdealingwithrecordingandprocessingofaccountingtransactions can
bereliably automated thus; technologies add more incremental value to organizations in this
regardanymore.Rather,anaccountant'sworthisnowreflectedinhigher-ordercritical-
thinkingskills,such as designing businessprocesses, developing e-business
models,providingindependentassurance,andintegratingstrategicaccountingknowledgeautomat
ically(Hunton,2012).

2.3 Qualities of good accounting information that influences effective production

decision making of anorganization
CostBenefitsBalance:Thecharacteristicsofmanagerialaccountingreportinformationprovidegen
eral guidelines fortheir preparation of report to meet the various needs of
management,Peterson (2011). In applying these guidelines, considerations must be given to
the specific needsof manager and the reports should be tailored to meet these needs. In
preparing reports, costs areincurred and a primary consideration is that the value of the
management reports must at least beequal to the cost of producing them. This overriding
cost- benefits evaluation must be consideredno matter how information report may be.
Therefore a report should not be prepared if its
costexceedsthebenefitsderivedbyusers,Wahab(2013).
Relevance: Relevance
meanst h a t a c c o u n t i n g s p e c i f i c a c t i o n h a s b e i n g c o n s i d e r e d bymanagement
.Inapplyingtheconceptofrelevance itis importanttorecognizethatsomeaccounting information
may have a high degree of relevance for one use but may have little
ornorelevanceforanotheruse,Kaplan(2009).
Timeliness:Timelinessreferstotheneedforaccountingreporttocontainthemostuptodateinformat
ion. In manycases,outdateddata can lead tounwise production decision.In some cases
thetimeliness concepts may require the accountant to prepare repo1is on a pre-arranged
schedulesuchasdaily or weekly. Inothercasesreportsarepreparedonaregularbasisoronly
whenneeded,Peterson(2011).
Accmacy:Accuracyreferstotheneedforthereporttobecorrectwithintheconstraintsoftheuse of

7
the repo1t and the inherent in accuracies in the measurement process. If the repo1t is
notaccurate management production decision may not be precise, Meigs (2011). For
example if inaccuratereport on a customer's past payment practice is presented to
management, an unwise production decision ingranting credit may be made. As previously
indicated, the concept of accuracy must be appliedwithin the constraints of the use to be jade
of the report. In other words there are occasions whenaccuracy should be sacrificed for less
precise data that are more useful to management.Forexamples, in planning production,
estimates (forecast) of more accurate data from past sales,Wahab(2013).In addition, it
should be noted that there are inherent inaccuracy in accounting data that are
basedinestimatesandapproximates.Forexampleindetem1iningtheunitcostofaproductmanufact
ured,anestimateofdepreciationexpensesonfactoryequipmentisusedinthemanufacturing
process must be made. Without this estimate, the cost of the product would be
oflimitedusefulnessinestablishingtheproductinthesellingprice,Kaplan(2009).
Clarity: It refers to the need for report to be clear and understandable in format and
contentrepo1ts that are clear and understandable, it will enable management to focus on
significantfactor in planning and controlling operations that is, reports on actual and
expected costs instandardcostandvarianceanalysis,Jackson(2016).
Conciseness:Concisenessreferstotheequipmentthatthereporthasbeingbriefandstraighttothe
point.Althoughthereport mustbe complete andincludeall relevantinformation,theinclusion of
unnecessary information wastes management's time and makes it more difficult
formanagement to focus on the significant factors relevant to a production decision. For
example
repo1tspreparedforthetoplevelofmanagementshouldusuallybebroadinscopeandpresentsumma
riesofdataratherthansmalldetails,Jackson(2016).

2.4 Accountinginformationandproduction decisionmakingofanorganization

Practical production decision is the risk and uncertainty involved. This means that it is
imp01tant that theinformation supplied by the accountant shows the effect of risk and
uncertainty and the range oflikely outcomes. Information for production decision making
must therefore be oriented towards the futureinvariably involves forecasting, estimating and
extrapolation. Information has no value in itself;its value derives from improvementsin the
8
production decisionwhich are taken upon the information,Jackson(2016).
Accountingprovidesfinancialreportsthatareneededbyoutsidepersonwhoinvestinbusinessunits,
lendmoneytothemorextends credit to them. Accounting furnishes repo1tswhich are to
be used by government agencies which regulate business. It helps tax authoritiessuch as the
internal revenue service determine the correct amount of tax collected if the unitaccounted
for it is not for profit organization such as school, hospital, church or other charitablegroups,
its members andthose who contribute to it need to knowfor what purposes and
inwhatproportionstheirmoneyisbeingused,Levis(2011).Accounting is often said to be the
language of business in the business world to describe thetransaction enteredinto by all
kinds of organizations. Wahab (2013). Accounting te1ms and ideasare
thereforeusedbypeopleassociatedwithbusinesswhetherthey aremanager,
owners,investors, bankers, lawyers or accountants, Kaplan (2009). Accounting extends
far beyond theactual making of records. Accounting is concerned with more than the
record making phase. Inparticular, accountant should be interested in the relationship
between the financial results andthe events which have created them. He should be
studying the various alternatives open to thefirm, and be using his accountancy
experience in order to aid the management to select the
bestplanofactionforthefirm,Lovis(2011).
Accountantsprovidetherightinformationtotherightpeopleintherightquantity,attherighttime and at
minimum cost. This raises the questions as to what is the optimal quantity, content,accuracy and
speed of transmitting information. These alternatives have different cost and
valuesanditisclearthataccountantshouldbearthisinmindwhencollectingandpresentinginformation
,Lovis(2011).
Furthermore, accounting information directs attention to problem areas, thus facilitating
theoperations of management by exception. It should also be problem solving, in other
futureactions, highlighting possible alternative solution to organizational problems and aid
in theestablishment of best alternative, Jackson (2016). Accounting information must aid
efficiencyandnotonlymustithighlight-
texistingdeficienciesandprovideabasisforappropriateaction,but it must further the interest of
the business organization by recommending changes for theimprovementof the
plans,policies,proceduresandvariousphasesbusiness operations.Accounting information

9
should be of assistance in estimating the future earning potential of thefirms and it should
generally disclose information relevant to the users of financial statements.Besides these
desirable objectives of accounting information must also be timely becausewithout that
quality, the desired information becomes ancient history by the time it comes to themanager's
desk. Indeed accounting information is news, if it is not timely presented, and then
itsvaluesdeteriorate,Carol(2012),
Thedatacontainedinaccountinginformationsisallthefinancialinformationpertinenttotheorganizatio
n's business practices. Any business data that impacts the company's finances shouldgo into
accountinginformation. The data included in accounting informationswill depend
onthenatureofthebusiness,butitmayconsistofthesalesorders,customerbillingstatements,sales
analysis reports, purchase requisitions, vendor invoices, check registers, general
ledger,inventorydata andpayrollinf01mation.The data can
thenbeusedtoprepareaccountingstatements and repo11s such as accounts receivable aging,
depreciation or amo11ization schedules,trialbalance,profitandloss,andsoonClinton(2010).

10
 CHAPTERTHREE
METHODOLOGY
3.1Introduction
Thischapterincludedtheresearchdesign,samplesize,populationstudy,toolsfordatacollection,
sources of data, analysis of data and presentation, limitation of the study, the
referenceandappendix.

3.2 ResearchDesign

ThestudyusedCrossSectionalresearchdesigns.Cross-sectionaldesignwaschosenbecauseitwas
the most appropriate given the nature of the objectives and limited time available to conductthis
research. Italsoused bothqualitativeand quantitativemethodsof data collection.Descriptive
research survey was used with the intension of obtaining both qualitative andquantitative
aspect of data andto organize data in an effective and meaningful way and alsohelped the
researcher collect data from population and got the description of existing
phenomenaasitexistedbyaskingindividualsabouttheirperceptions,attitudes,behavioursandvalues.

3.3 Areaofstudy

ThestudywascarriedoutatUnga Ltd Company,Eldoret.

3.4 Population

Basing on the facts given by the humanResourcemanagerof Unga Ltd CompanyEldoret, the
companyemployed 40 people in different departmentswhich included: marketing Agents,
AccountingManagement,ICT,ProcurementandothersupportstaffmemberatitsEldoretbranch

3.5 Samplesize

11
Asampleof25respondentswasselectedbytheresearcherandrepresentedthewholepopulation
and this sample size was determined using Krejcie and Morgan (1970).

This is shown in thetablebelow:

Table3.1:showingcompositionofthesamplesize.

Department No. of Percentage

respondents (%)
Auditing ,., 12
.J
Tax administration department 4 16

Financeandaccounting .,.,, 12

Humanresourcemanagement 2 8

Planninganddevelopment 4 16

Procurementandmarketing ,., 12
.J
ICT 3 12

Generalemployees 3 12
Total 25 100

3.6 Samplingtechniques

Purposivesan1plingmethodwasusedwherebyafewrespondentshavingtherequiredinformati
on were selected from the whole population to participate in the study. Simple
Randomsampling was used and each depa1iment got an equal chance of being selected
for sample. Theresearcher also used systematic sampling which aimed at eliminating
mistakes, improved thelevels of data accuracy and ensured that every department at
least every department was
12
selectedusingrandomnumbersandthishelpedtheresearcherpickupthesection.w ithwhichtos
tart from.

3.7 SourcesofData

3.7.1 Secondarydata

Thedata was collectedfrom the,internet,literaturereview,journalistsandother

resourcecenters. Under this source, thedata was obtained from financial reports,
invoices,journals,magazines,newspapersandreportsfromtheresourcecenterswhichbacked
upquantitativedata.

3.7.2 Primarydata:

TheresearchergotinformationdirectlyfromtherespondentsatUnga Ltd CompanyEldoret.

3.8 Datacollectiontools

3.8.1 Questionnaire

Questionnaireisacarefully designedinstrumentfor collectingdata in accordancewith

thespecifications of researchquestions.This containeda form of set questions that were
answeredby the respondents and the researcher asked simple non logic questions every
respondent couldcomprehendfully.Self-
administeredsemistructuredquestionnairewasdesignedtocollectquantitative data. Itinvolvedboth
open-endedand closed ended questionnaires. This researchtool was considered to be central for
this study simply because it was a convenient tool
wherebytherespondentscouldchosewhentoanswertheresearchquestionswithoutpanic.

3.8.2 Interviews

This is the physical interactions betweeninterviewers and interviewee inthe data

collectionprocess and the researcher used face to face interview and which helped the researcher
collectinformation from the target population. Both formal and informalinterview were adopted
tomaximize information from different respondents who participated in the research
study.Theresearcher interviewed all the respondents through physical contacts in the process of
collectingdata aboutthe effect of accountinginformationon production decision making of an

13
 organization. Theresearcheradoptedstructuredinterviewwhichwas informof
simplequestionswhich therespondentsaskedthroughfacetofacemethod.

3.9 ProcedureofDataCollection

The research proposal was first approved by the supervisor and then designed the
researchinstruments which were used in data collection activities with the help of the
supervisor. Theresearcher obtained an official introductory letter from the research
coordinator school ofmanagement and entrepreneurship where the researcher belongs
which was presented to theUnga Ltd CompanyEldoretwhere the study was carried out. The
letter officially introduced the researcher tothe management and other officials in the study
area which enabled her officially conduct thestudyintheareaswithease.

3.10 Validityandreliabilityofdata

3.10.1 Validityofthedata

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

dete1minedwhether the research instruments truly measured what it intended to measure or how
truthfulresearch results would be. Confidentiality was assured to the participants and the repo1i
wasedited to protect identification of individuals. Data collected was subjected to some
preparationsuch as editing, coding and data entry which helped the researcher to detect errors
and omissions.Piloting was carriedout to test the validity of the instruments. A pilot study was
conductedbythe researcher by taking some questionnaires to the staff security group which was
filled by somerespondents at random. From this pilot study, the researcher was able to detect
questions thatneedededitingandthosethatwereambiguous.

3.10.2 Reliabilityofthedata

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

themeasuring instrument. Reliability analysis allowed examination of the properties of
measurementscales ai1d the variables making them up. The reliability analysis procedure
calculated a numberof commonlyused measures of scale reliability and provided information on

14
 the relationshipbetween individual variables in the scale. The reliability analysis procedure
calculated a numberof commonlyused measures of scale reliability and provided information on
the relationshipbetweenindividualvariables inthescale.

3.11 Dataprocessing,dataanalysis,presentation.

The data was coded, edited andanalyzedusingboth statisticalandnon-statistical methods andthe

data collectedwas arrangedin systematicway toensurerelevancyand
adequacy.Theresearcherpresentedthefindingsofthestudyusingbarcharts,frequencies,percentagesa
ndtables.

3.12 EthicalConsiderations

The nature of the project anonymity was observed as some people did not want their names
andagetoberecorded.Inthiscasetheresearcherobtainedconsentfromalltherespondents.

15
 CHAPTERFOUR
PRESENTATION,ANALYSISANDINTERPRETATIONOFTHEFINDINGS

4.1 Introduction
This chapter presents field data, gives interpretation and analysis of findings made as an
attemptto establish the effect of accounting information on production decision making
of a11 organization. Theresults obtained from the study are presented in form of tables,
frequencies and percentages
inlinewiththestatedobjectivesandresearchquestions.Thefindingswereasresultsofquestionn
aires which were given to respondents to fill. The study was conducted in
differentdepartmentsofUnga Ltd CompanyEldoret:
This chapter contains the presentation of the study findings collected from various
departmentswhichwerederivedfromthestudyobjectivesusingpercentages,bargraphs,tables
andfigures.

4.2 Generalinformationoftherespondents

Demographicinformationcontainsthegender,categoriesofrespondents,Age,workingexperienc
eandeducationlevelofrespondents.

4.2.1 Genderofrespondents
16
Respondentswereaskedtoshowtheir genderandfindingswerepresentedasinthetablebelow.

Table4.2:ShowingtheGenderofrespondents
SEX Frequency Percentage(%)
Females 12 48
Males 13 52
TOTAL 25 100
Source:Primarydata

Genderofrespondents

Females
Males

Figure4.1:ShowingtheGenderofrespondents

The study results in table 4.2 and figure 4.1above reveal that 48% of the respondents
werefemales and then 52% of respondents were males. This indicates that male respondents
largelyparticipated in the study which was due to the fact that the majority of the company
employeeswere males. Female respondentswere veryfew due to the policy of the company
toemploymanymalescomparedtofemales.

4.2.2 Ageofrespondents

Here, respondentswere requested to show their age brackets inorder to find out which

17
agebracketisdominantatUnga Ltd CompanyEldoretandthefindingswereasinthetablebelow:

Table4.3:Showingtheageofrespondentsparticipatedinthestudy.
Agebracket (years) Frequency Percentagerate(%)
20-25years 5 20
26--30years 7 28
31-40years 9 36
Over40years 4 16
Total 25 100
Source:Primarydata

Ageoftherespondents

20-25years
26-30years
31- 40years
Over40years

Figure4.2:ShowingtheAgeofrespondents

The study findings from table 4.3 and figure 4.2 indicate that many research participants were
intheagebracketbetween31and40 yearsandthese respondentswere representedby36%.Whereas
respondents aged between 26 and 40 years were represented by 28%. However, 20% ofthe
respondents aged less than 20-25years, respondents represented by 16% aged above 40
years.The findings indicate that that atleast all respondents from different age bracketswere
includedinthestudy.
18
 4.2.3 Maritalstatus

Respondentswere askedtoindicatetheirmaritalstatusandthefindingsareasinthetablebelow:

Table4.4:Showingmaritalstatusoftherespondents
Marital Status Frequency Percentage (%)
Single 10 40
Married 15 60
Total 25 100
Source:Primarydata

Maritalstatusoftherespondents

Single
Married

Figure4.3:ShowingtheMaritalstatusoftherespondents

The study results presented in table 4.4 and figure 4.3 above show that 60% of respondents
weremarried, while 40% of respondents were single. This indicates that many research
participantsinterviewed by the researcher were married. It further gives an implication that
to work at Unga Ltd
CompanyEldoretyouhavetobemarriedasitsmanagementconsidersmarriedpeopletobemoreresp
onsibleenoughfor theiractions.
4.2.4 Educationlevelofrespondents

In order to establish the most prevalent education level that would give the most desirable
19
 data,respondents were asked to show their education level and the .findings are shown as in
the tablebelow:
Table4.5:Showingeducationlevelofthetargetrespondents
Academic Frequency Percentagerate(%)
qualification
Certificate 2 8
Diploma 7 28
Degree 15 60
Mastersandothers I 4
Total 25 100

4.2.5Categoriesofrespondents
Thestudyincludeddifferentcategoriesofrespondentsfromdifferentdepartmentsasgi
ven inthetablebelow.

Table4.6:Thedifferentcategoriesofrespondents

Department Frequency Percentage(%)

Auditing 3 12
Taxadministrationdepartment 4 16
Financeandaccounting 3 12
Humanresourcemanagement 2 8

Planninganddevelopment 4 16
Procurementandmarketing 3 12

ICT 3 12

Generalemployees 3 12
Total 25 100

Source:Primarydata
Figure4.6:ShowingtheNumberofrespondents

20
 NumberofRespondents

Auditing
Taxadministrationdepartment
Financeandaccounting
Human resourcemanagement
Planninganddevelopment
Procurement andmarketing
ICT
Generalemployees

The study results in table and figure 4.6 indicate that the biggest number and percentage
ofrespondents came from the tax administration department represented by 16% and this is
becausethey were the target respondents. Although those from planning and development
were alsorepresentedby 16%. The
remainingrespondentsfromauditingdepartment,financeandaccounting, procurement and
marketing and general employees were all represented by 12%.However, research
participants from the department of human resource management wererepresented by 8%.
The study results indicate that the target respondents participated in thestudy.
Thestudyfindingsfromtable4.5aboveindicatethatAuditingdepartmentisresponsibleforasyst
ematic andeffective examination of data, statements,records, operations andperformancesof
an organization and this has helped the company minimize corruption and fraud
henceimprovedcompanyfinancialperformance.
Taxationdepartmentincludespeoplewhomanagethecompanyandothertransactionsor activities
in such a way so as to make maximum use of tax holidays, exemption,
concession,rebates, tax credits, deductible allowances available under law and as a result
the company isabletoderivethebenefitof minimizingitstaxliability.

The study findings from tableand figure 4.7above indicate that the users
needaccountinginformation, 28% of the respondents argued that the users need financial

21
information to makeproduction decisions,however,thesame percentage(36%)reportedthat
manyusers needmanagerialinformation. basing on the highest percentage of respondents
who participated in the study,
itwasrevealedthatmanyusersneedaccountingandmanagerialinformation.

Table4.8:Showingthereasonswhytheusersneed theinformation

Response Frequency Percentage(%)

Forinvestmentproduction 10 40
decisions
Forproperallocationof 15 60

resources
Total 25 100
Source:Primarydata

Figure4.8:Showingthereasonswhytheusersneedtheinformation

Reasonswhytheusersneedtheinformation

Forinvestmentdecisions

Forproperallocationofresources

Thestudyresultspresentedintableandfigure4.8aboveshow that60%representedtherespondents
who argued that the users need the information for investment production decisions, while
22
 40%of the respondents said that the users need the information for proper allocation of
resources. Itfurthergivesanimplicationthat
differentusersneedinformationforproperallocationofresources.

Table4.9:Showingthechallengestheusers faceingeneratingthisinformation

Response Frequency Percentage rate

(%)
Possibilityoflosingthedataduetoinsecurityand 2 8
computervirus
Computerviruscaneasilycrushthecompanydatathe 7 28
company
ChangingTechnologygives challengetonewstaff 15 60
Relyingonout datedinformation I 4
Total 25 100
Source:Primary source

Figure4.9:Showingthechallengestheusersfaceingeneratingthisinformation

Challengestheusersfaceingeneratingthisinformation

Challengesfaced

Possibilityof Computervirus Changing Relyingon

losingthedata caneasilycrush Technologygives outdatedinformation
duetoinsecuritythecompanydatachallengetonew
andcomputer the company staff
virus

23
 The study results presented in table 4.8 show that 8% of the respondents said that possibility
oflosing the data due to insecurity and computer virus is one of the challenges the users
face ingenerating this information, 28% argued that computer virus can easily crush the
company datathe company, while 60% represented the respondents who said that
computer virus can easilycrush the company data the company. However, 60% of the
respondents said that changingTechnologygiveschallengetonewstaffand4%
wasfortherespondentswhosaidthatrelyingonoutdatedinformationisanotherchallengefacedby
usersingeneratingthisinformation.

4.3Presentationsoftheresearchfindingsaspertheresearchobjectives

The study findings were based on the users of accounting information, the qualities of
goodaccountinginformationthatinfluenceeffectiveproduction decisionmakingof Unga Ltd
CompanyEldoret and therelationshipbetweenaccountinginformationandproduction
decisionmakingofUnga Ltd CompanyEldoret.

Table4.10:Theusersofaccountinginformation

The usersofaccountinginformation. SA A NS D SD

Fre % Fre % Fre % Fre % Fre %

q q q q q
Various individuals andinstitutions use 5 2 10 4 5 2 5 2 0 0
accountinginformation. 0 0 0 0
Bankersandsuppliersneedaccountinginformation 9 3 10 4 2 8 4 16 0 0
6 0
Government agencies arealso users of 11 4 6 2 3 1 5 2 0 0
accountinginformation. 4 4 2 0
Employer and their 16 6 4 16 0 0 5 2 0 0
unionrepresentativesarevirtuallyinterestedin 4 0
accounting

24
inforn1ation.
Managersrequireaccountinginformationwhichwillassist 9 3 10 4 2 8 4 16 0 0
them in their production decisionmaking and 6 0
controlactivities.

Creditors and providers ofloans capital 9 3 10 4 2 8 4 16 0 0

requireaccountinginformationonafirm;s ability to 6 0
meetfinancial obligations.

Employeesrequireaccountinginformationonthe 16 6 4 16 0 0 5 2 0 0
ability of the firm tomeet wages demands 4 0
andavoidredundancies.

Accountants use accountinginformation to enhance 11 4 6 2 3 1 5 2 0 0

theirrolewithintheorganization. 4 4 2 0

Source:prima,ydata

According to table 4.7 above, 20% of respondents strongly agreed that various
individuals inaccounting department atUnga Ltd CompanyEldoretuse accounting
information, 40% agreed while 20%
oftherespondentswerenotsureand20%didnotagree
withthestatement.Basingontheresponsesfromthetargetpopulation,variousindividuals
andinstitutionsuseaccountinginformation.
The study results from table indicate that bankers and suppliers need accounting
information and36% of respondents strongly agreed with the statement, 40% of
respondents agreed where as 8%were not sure of whether the statement was true
or not and 16% of respondents disagreed.
Thehighestpercentageofrespondentsstronglyagreedwiththefinding.
Thestudyresultsindicatethat44%ofrespondentsstronglyagreedthatGovernmentage
nciesarealso users of accounting information and this was agreed by 24% while
12% respondents werenotsure,20%disagreedwith thefinding.
The study findings inthetableabove show that 64% of
respondentsstronglyagreedthatEmployer and their union representatives are virtually
25
interested in accounting information and16% represented agreed, while 20% of respondents
disagreed with the finding. Basing on
thestudyresults,majorityofrespondentsstronglyagreedwiththefinding.
The studyresultsfromtable indicatethatcreditorsandprovidersofloanscapitalrequireaccounting
information on a firm's ability to meet financial obligations and 36% of respondentsstrongly
agreed with the statement, 40% of respondents agreed where as 8% were not sure ofwhether
the statement was true or not and 16% of respondents disagreed. The highest
percentageofrespondentsstronglyagreedwiththefinding.
The studyfindingsinthetable above show that 64%
ofrespondentsstronglyagreedthatEmployees require accounting information on the ability
of the firm to meet wages demands andavoid redundancies and 16% represented agreed,
while 20% of respondents disagreed with thefinding.Basingon
thestudyresults,majorityofrespondentsstronglyagreedwiththefinding.
Thestudyresultsindicatethat44%
ofrespondentsstronglyagreedthatAccountantsuseaccounting information to enhance their
role within the organization and this was agreed by
24%while12%respondentswerenotsure,20%disagreedwiththefinding.

Table 4.11 :The qualities of good accounting information that influence effective
production decisionmakingofUNGA LTD COMPANYEldoret.
Qualitiesofgoodaccountinginformation. SA A NS D SD

Fre % Fre % Fre % Fre % Fre %

q q q q q
Goodaccountinginformation. 9 3 10 4 2 8 4 160 0
6 0
mustbeRelevant.
Goodaccountinginformation 12 4 10 4 3 1 0 0 0 0
shouldachievecostbenefitsbalance. 8 0 2

Timelinessisrequiredforgoodaccountinginformationsh 16 6 4 1 0 0 5 2 0 0
ould 4 6 0

26
consider.
Goodaccountinginformation 11 4 6 2 3 1 5 2 0 0
4 4 2 0
mustbeaccurate.
Clarityisnecessaryforgood 10 4 9 3 2 8 4 160 0
0 6
accountinginformation
Concisenessisakeyforgood 16 6 4 1 0 0 5 200 0
4 6
accountinginformation.
Source:primary

The study results from above indicate that Good accounting information must be
Relevant and36% of respondents strongly agreed with the statement, 40% of the
respondents agreed where as8% were not sure of whether the statement was true or not
and 16% of respondents
disagreed.Thehighestpercentageofrespondentsstronglyagreedthatthestatementwastrue.

The study findings from the table above show that Good accounting information should
achievecost benefits balance and 48% strongly agreed, 40% agreed with the findings
while 12% werenot sure whether the statement was true or not. The results from table 4.8
above reveal that 64%of respondents stronglyagreed that Timeliness isrequiredfor good
accounting
informationshouldconsiderand16%ofrespondentsagreed,while20%ofrespondentsdisagree
dwiththefinding. Basing on the percentage response,it was found out that the finding was
true andrelevanttothestudy.
The studyresultsindicatethat44% ofrespondents stronglyagreedthat
Goodaccountinginformationmustbeaccurateandthiswasagreedby24%while12%responden
tswerenotsw-
e,20%disagreedwiththefinding.Thisgivesimplicationthatthefindingsweretrue.
The studyresultsfromtable aboveindicate that Clarity
isnecessaryforgoodaccountinginformation,40%ofrespondentsagreedwhereas8%werenots
meofwhetherthestatementwastrue or not and 16% of respondents disagreed. The highest

27
percentage of respondents stronglyagreedthatthestatementwastrue.
The results from above reveal that 64% of respondentsstrongly agreed that Conciseness
is a keyfor good accounting info1mation and 16% of respondents agreed, while 20% of
respondentsdisagreed with the finding. Basing on the percentage response, it was found
out that the findingwastrueandrelevanttothe study.

Table 4.12 :The relationship between accounting information and production decision
making ofUnga Ltd CompanyEldoret.
Statements SA A NS D SD
Freq % Freq % Freq % Freq % Freq %
Theinformationsuppliedbytheaccountant 16 64 4 16 0 0 5 20 0 0
shows the effect ofrisk and uncertainty
andtherangeoflikelyproduction
decisionmaking
outcomes.
Accounting information forproduction 10 40 9 36 2 8 4 16 0 0
decisionmakingisthereforeoriented
towards the futureinvariably which
involvesforecasting,estimating and
extrapolation.
Accounting provides financialreports 11 44 6 24 3 12 5 20 0 0
that are needed byoutside person who
invest inbusinessunitstomakeproduction
decision
making.
Accounting furnishes reportswhich are 12 48 10 40 3 12 0 0 0 0
to be used
bygovernmentagenciesinproduction
decision
makingwhichregulatebusiness.

28
Accountants provide the 16 64 4 16 0 0 5 20 0 0
rightinformation totheright people inthe
right quantity, at the
righttimeandatminimumcostwhich
facilitateproduction decisionmaking.
The data 11 44 6 24 3 12 5 20 0 0
containedinaccountinginformation is all
the financialinformationpertinent tothe
organization'sbusinesspractices.
Source:PrimaryData

The study results above reveal that 64% of respondents strongly agreed that the
informationsupplied by the accountant shows the effect of risk and uncertainty and
the range of likelyproduction decision making outcomes and 16% agreed, while 5%
of total respondents disagreed with
thestatement.Basingonthestudyresults,respondents represented
bythehighestpercentagestronglyagreedwiththefinding.

The study results from table above indicate that 40% of respondents strongly agreed that
the topmanagement of the organization must set the standard for other employees by
their conduct and36% of respondents agreed with the statement,8% represented the
respondents who were notsme whether the statement wastrue or not while 16% of the
respondents disagreed. This givesimplicationthatthefindingwastrue.
The study results from the table above showed that 44% of the respondents strongly
agreed thatChecking the employee previous employment verification and civil history
for possible
lawsuitsand24%agreed,12%werenotsureand20%disagreed.Thehighestpercentageofrespo
ndent s strongly agreed that Checking the employee previous employment verification
and civil historyforpossiblelawsuits.

29
 CHAPTERFIVE
DISCUSSION OF THE FINDINGS, SUMMARY, CONCLUSIONS
ANDRECOMMENDATIONS
5.1 Introduction
Thischaptershowsthedetaileddiscussionsofthemajorfindings,conclusiondrawn,recommen
dationsandsuggestionsonareasoffutureresearch.

5.2 Discussionofthefindings:
5.2.1 Theusersofaccountinginformation
The findings indicated that various individuals in accounting department at Unga Ltd
CompanyEldoret useaccountinginformation.Thestudyresultsalsoindicated
thatbankersandsuppliersneedaccountinginformation.Accordingtothe findings,
Governmentagencies are also users ofaccounting information.This is in line with Wahab
(2013) stipulates that various individuals
andinstitutionsusetheeconomicdatathataregatheredandcommunicated
bytheaccountingsystemfor assistance in making production decision regarding future
actions. For example, investors in businessenterprise need information on the financial
condition and result of operations of the enterprise inordertoaccess
theprofitabilityandriskoftheirinvestorsintheenterprises.
The study findings showed that employer and their union representatives are vi1tually
interestedin accounting information. The results revealedthat creditors and providers of
loans capitalrequire accounting information on a firm's ability to meet financial
obligations. This is in linewith Meigs (2008) whosaid that bankers and suppliers need
accounting information with whichto appraise the financial soundness of a business
organization and to access the risk involved
30
 inmakingloanandgrantingcredit.HeaddedthatGovernmentagenciesareconcernedwiththe
financialactivitiesofbusinessorganizationsforpurposeoftaxationandregulation.
The study findings showed that employees require accounting information on the ability
of
thefirmtomeetwagesdemandsandavoidredundancies.ThestudyresultsrevealedAccountants
useaccounting information to enhance their role within the organization. This is in line
with Wilson(2014) who said that the dependent individuals who are most involved with
the end product ofaccounting are those charged with responsibility of directing the
operations of the enterprise.They are often referred to as "management" managers rely
upon the accounting information
toassisttheminevaluatingcurrentoperationsandinplanningfutureoperations.Wilson(2014)a
dded that employer and their union representatives are vi1tu ally interested in the stability
andprobabilityoftheorganizationthathirethem.

5.2.2 The qualities of good accounting information that influence effective production
decision makingofUnga Ltd CompanyEldoret.
The study results showed that good accounting informationmust be Relevant. The
highestpercentage of respondents strongly agreed that the statement was true. The
findings showed goodaccounting information should achieve cost benefits balance. This
is in line with Wahab (2013)who said that the characteristics of managerial accounting
repo1t information provide generalguidelines for theirpreparationof report tomeet the
variousneeds of management.He added thatin preparing reports, costs are incurred and a
primary consideration isthat the value of
themanagementreportsmustatleastbeequaltothecostofproducingthem.
The results revealed that timeliness is requiredfor good accountinginformation should
consider.This is in agreement with Peterson (2011) who argued that in many cases,
outdated data can leadto unwise production decision. In some cases the timeliness
concepts may require the accountant to preparereportsonapre-
arrangedschedulesuchasdaily,weeklyormonthly.
The study results indicated that good accounting information must be accurate. The
findingsrevealed that Clarity is necessary for good accounting information. In addition,

31
 conciseness is akey forgood accounting information.This isin line with Wahab (2013)
who said that thecharacteristics of managerial accounting report information provide
general guidelines for theirpreparation of report to meet the various needs of
management. He added that in preparingreports, costs are incurred and a primary
considerationis that the valueof the
managementreportsmustatleastbeequaltothecostofproducingthem.

5.2.3 The relationship between accounting information and production

decisionmaking inUnga Ltd CompanyEldoret
The study findings indicated that the information supplied by the accow1tant shows the
risk anduncertainty and the range of likely production decision making outcomes which
reveals the relationshipbetween accounting information and production decision making
of Unga Ltd CompanyEldoret. This is in line with Lovis(2011) who said that accounting
furnishes reports which are to be used by government
agencieswhichregulatebusiness.Headdedthataccountinginformationhelpstaxauthoritiessuc
hasthe
internal revenue service determine the correct amount of tax collected if the unit
accounted for itis not for profit organization such as school, hospital, church or other
charitable groups, itsmembers and those who contribute to it need to know for what
purposes and in what proportionstheirmoneyisbeingused.
The study findings indicated that the top management of the organization must set the
standardfor other employees by their conduct. Also the findings showed that checking
the employeeprevious employment verification and civil history for possible lawsuits.
This is in line withKaplan (2009) argued that accounting is concerned with more than the
record making phase. Inparticular, accountant should be interested in the relationship
between the financial results andthe events which have created them. He should be
studying the various alternatives open to thefirm, and be using his accountancy
experience in order to aid the management to select the bestplanofactionforthefirm.

32
 The study findings showed that every staff, no matter how highly placed, should be
governed bythe rules of the institution. The study results revealed that every organization
should have regularassessments procedures which will be complemented with
uncustomary, random, unannouncedfinancial audits and frauds assessments. This is in
line with Peterson(2011) stipulates
thatinformationconsistsofdatathathavebeenretrieved,processedorotherwiseused
forinformative or inference purpose argument or as a basic for forecasting and production
decision making. Headdedthattheencyclopedia
ofprofessionalmanagementstatesthatinformationmustbedistinguished from data and this
distinction is important. Data are merely facts and figures thathave little to do with
production decision making, while information on the other hand are essential
rawmaterial forproduction decisionmaking.
The study results showed that adequate training and education especially on frauds
should beorganized from time to time for organization’s staff.This agrees with Jackson
(2016) whostipulated that accounting information directs attention to problem areas, thus
facilitating theoperationsofmanagementbyexception.
Itshouldalsobeproblemsolving,inotherfutureactions, highlightingpossible alternative
solutionto organizational problemsandaid in theestablishmentofbestalternative.

5.3 Summaryofthefindings
5.3.1 Theusersofaccountinginformation
The findings indicated that various individuals in accounting department At Unga Ltd
CompanyEldoret useaccountinginformation.The
studyresultsalsoindicatedthatbankersandsuppliersneedaccounting information.According
to the findings, Governmentagencies are also users ofaccounting information. The study
findings showed that employer and their union representativesare
vi1tuallyinterestedinaccountinginformation.The resultsrevealedthatcreditorsandproviders
of loans capital require accounting information on a firm's ability to meet
financialobligations.The study findings showed that employees require accounting
information on theability of the firm to meet wages demands and avoid redundancies.
The study results
revealedAccountantsuseaccountinginformationtoenhancetheirrolewithintheorganization.
33
5.3.2 Thequalitiesofgoodaccountinginformationthatinfluenceeffectiveproduction
decisionmakingofUnga Ltd CompanyEldoret.
Thestudyresultsshowed
thatgoodaccountinginfo1mationmustbeRelevant.Thehighestpercentage of respondents
strongly agreed that the statement was true. The findings showed
goodaccountinginformationshouldachievecostbenefitsbalance.Theresultsrevealedthattime
linessis required for good accounting information should consider. The study results
indicated thatgood accountinginformation must be accurate. The findings revealed that
Clarity is necessaryforgoodaccountinginformation.In
addition,concisenessisakeyforgoodaccountinginformation.

5.3.3 Therelationshipbetweenaccountinginformationandproduction
decisionmakingofUnga Ltd CompanyEldoret
The study findings indicatedthat the info1mation supplied by the accountant shows the risk
anduncertainty and therange of likely production decision making outcomes which
reveals the relationshipbetweenaccountinginformationandproduction
decisionmakingofUnga Ltd CompanyEldoret.
The study findings indicated that the top management of the organization must set the
standardfor other employees by their conduct. The study findings showed that every
staff, no matter
howhighlyplaced,shouldbegovernedbytherulesoftheinstitution.Thestudyresultsrevealedth
atevery organization should have regular assessments procedures which will be
complementedwithuncustomary,random,unannouncedfinancialauditsandfraudsassessments.
The study results showed that adequate training and education especially on frauds
should beorganizedfrom timetotimefororganization'sstaff.

34
5.4 Conclusion
The study concluded that various individuals in accounting department atUnga Ltd
CompanyEldoretuseaccountinginformation,bankersandsuppliersneedaccountinginformati
on,governmentagencies are also users of accounting information, employer and their
representatives arevirtually interested in accounting information, managers require
accounting information whichwill assist them in their production decision making and
control activities, creditors and providers of
loanscapitalrequireaccountinginformationonafirm'sabilitytomeetfinancial
obligations,employees require accounting information on the ability of the firm to meet
wages demands andavoid redundancies and also accountants use accounting information
to enhance their role withintheorganization.
The conclusion was made that good accounting information must be relevant, should
achievecost benefits balance, timeliness is required for good accounting information; it
must be accurate,clarity andconciseness.
The study found out that the information supplied by the accountant shows the effect of
risk anduncertainty and the range of likely production decision making outcomes,
accounting provides financialreports that are needed by outside person who invest in
business units to make production decision making,accounting furnishes reports which
are to be used by government agencies in production decision makingwhich regulate
business, accow1ting furnishesreports which are to be usedby governmentagencies in
production decision making which regulate business, accountants provide the right
informationto the right people in the right quantity, at the right time and at minimum cost
which facilitateproduction decision making reveal the relationship between accounting
information and production decision making ofUnga Ltd CompanyEldoret.

5.5 Recommendations
The companyshoulduseaccountinginf01mationsystemseffectively to verify theaccuracy
of accounting information provided by the accountants and a precedent
databaseshouldformulatethe accountingstandardsbasedonthesystemsofmanagement.
Thereisaneedtoconsiderandputinplacemeasuresto ensure that

35
 accountinginformationinfluenceeffectiveproduction decisionmakingatUnga Ltd
CompanyEldoret.
The management should put adequate Management information systems arrangements
inplaceforeffectiveproduction decisionmakingatUnga Ltd CompanyEldoret.
The company should employ people who are more knowledgeable about accounting
andshould also develop a systematic method of implementing the systems of accounting
so astoovercome thechallenges.
The management ofUnga Ltd CompanyEldoretshould understand the qualities of good
accountinginformationandhowtheyinfluenceeffectiveproduction decisionmaking.

REFERENCES
Bumet,R.
(2013).Enterprise·InformationSystemsAdoptioninIberianLargeCompanies,4 thEdition,Mc
Grew-HillpublishingCompany
Carol,H.
(2012).Enterpriseresourceplanningsystems,strategicenterprisemanagementsystemsand
management accounting: a Danish study, 2nd Edition, Starlet publishing House
U.S.A.Clinton,T. (2010). Open source workflow management systems for the internal
audit process, 3rdEdition,Millenniumpublishinghouse.
Drury,T.R.
(2010).Aparadigmforvalueaddedresearchinaccountinginfo1mationsystems,"4thEdition,De
nisonHall.
Frankwood,P.(2014).TheStandardsofAuditingandCodeofEthics3RDedition,M.KStewart

publishingHouse

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Hunton,B.
(2012).Implementationofaccountinginformationsystems,3rdEdition,Touchpublishingc
ompany

Indira,W.
(2008).Managementaccountingandintegratedinformationsystems9thEdition,Prenticep
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Jackson,P.
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Kaplan,I.(2009). Accountingtrendsin a borderless world," CharteredInstitute of

ManagementAccountants,3rdEdition,PersonicTileckHouseAccra Ghana.
LeoB.,
(2012).ManagementandCostAccountingPrinciples9thEdition,MarchePolytechnicUniversit
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Lovis,K.K.
(2011).Historica)OverviewofAccountingInformationSystems,2ndEition,PersonPrenticeHa
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Machael,S.
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APPENDIX1:INTERVIEWGUIDE

a) WhatisyourhighestlevelofEducation?

b) ForhowlonghaveyoubeenpartofUNGA LTD COMPANYEldoret?

c) Doyouplanforyourorganization?

d) Whataretheusersofaccountinginformation?

e) Whatarethequalitiesofgoodaccountinginformationthatinfluenceeffectiveprodu
37
 ction decisionmakingofUNGA LTD COMPANYEldoret?
f) Whatistherelationshipbetweenaccountinginformationandproduction
decisionmakingofUNGA LTD COMPANY

Eldoret?

38