THE ROLE OF COST ACCOUNTING INFORMATION AS AN AID TO MANAGERIAL FUNCTION IN AN ORGANIZATION
BACKGROUND OF THE STUDY
The role of cost accounting information as an aid to managerial functions in an organization is to provide the management at all levels with the necessary information which will assist them in the discharge of their managerial functions in an organization.
Frankwood and Along Sangster (2008) opine that accounting is the language of business and it is the only tool in which the management would use to help them perform their managerial function properly. Cost accounting information form standard costing, absorption costing, marginal costing, cost volume profit analysis etc. are generally used to make short term decision, long term decision, pricing, transfer pricing, capital budgeting and all other quantitative and qualitative decisions in both manufacturing and service rendering business organization. (Adeniji 2016:6).
It would be very difficult if not impossible to discharge managerial functions in an organization effectively without the help of a complete and up to data accounting information, managerial functions which include planning, organizing, directing, staffing, co-ordinating, reporting and budgeting cannot be carried out effectively devoid of accounting information especially that from the branch of accounting called the cost accounting.
For business organization to survive in this present bad economy in Nigeria, such business organization must realize the role that is performed by cost accounting in the discharge of managerial functions particularly for manufacturing firms. (Longe and Kazeem 2008:3). This research work is therefore geared to view the role of cost accounting information as an aid to the performance of managerial functions in an organization with particular reference to Network Travel Limited Eket, Akwa Ibom State.
1.1 STATEMENT OF THE PROBLEM
It has been identified that majority of business organizations that suffers liquidation both in the past and nowadays are those business organization that have not yet identified the role that accounting information plays especially the branch of cost accounting. Since they are yet to know the role performed by cost accounting information, they do not have a department separate for cost accounting and do not employ a cost accountant who would charge the function of cost accounting.
Meanwhile, it has been brought to lime light that the management of both manufacturing and service rendering business organizations even the non-profit making firms needs cost accounting information in other to actualize their managerial functions with ease.
Based on the above expression, the research problem may therefore be stated as the non-identification of cost accounting role in the performance of managerial functions in an organization.
1.2 PURPOSE OF THE STUDY
This study was carried out to reveal the impact and role that cost accounting information has on the discharge of managerial functions in an organization.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives and aims of the study.
- To determine if cost accounting information affects managerial functions.
- To ascertain if managerial functions can be performed effectively without cost accounting information.
- To know if there are difficulties in applying cost accounting information in the discharge of managerial function.
- To determine if cost accounting information quickens the performance of managerial functions.
1.4 RESEARCH QUESTIONS
The following research questions were built by the researcher.
- Does cost accounting information affects managerial function?
- Can managerial function be performed effectively with cost accounting information?
- Is there any problem encountered in applying cost accounting information.
- Does cost accounting information quicken the discharge of managerial function?
- Does cost accounting information relevance to apply in an organization?
1.5 SIGNIFICANCE OF THE STUDY
Below form the significance of this study:
- To show managers and other decision makers in network travels the importance of applying cost accounting information when performing managerial functions.
- To help solve the problem of making intricate and abysmal decisions without applying accounting information.
- To direct decision makers, mangers and entrepreneurs to identify the necessary information while performing managerial function.
- To help shareholders, investors, the government in achieved efficient allocation of scare resourced.
1.6 DELIMITATION OF THE STUDY
This work is meant to focus on the role of cost accounting information as an aid to managerial functions in an organization taking a study of network travel Eket.
1.7 LIMITATION OF THE STUDY
- The behavior of some respondents in the case study.
- Lack of funds to acquire enough materials which would have served as secondary sources of data.
1.8 DEFINITION OF TERMS AND ACRONYMS
This is the process of identifying, classifying, recording, analyzing, measuring, summarizing and communicating economic and financial information to enable the users to make decision.
A formal presentation of the records of all the financial activities of a business over a period of time.
A collection of persons who have pooled their resourced in order to provide goods and services to make profit.
The application of costing and accounting methods, policies and techniques in the ascertainment of cost and comprises of standard and actual cost of operations.
The branch of accounting that focuses on the financial resources, obligations and activities of an economic entity.
The use of professional skill for identifying and achieving organizational objectives through the deployment of appropriate resources.
- C I M A – Chattered Institute of Management Accountants
- I C A N – Institute of Chartered Accountants of Nigeria
- A N A N- Association of National Accountants
- C I T N- Chartered Institute of Taxation in Nigeria