THE EFFECT OF FINANCIAL ACCOUNTING REPORTING ON MANAGERIAL DECISION MAKING

THE EFFECT OF FINANCIAL ACCOUNTING REPORTING ON MANAGERIAL DECISION MAKING

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CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND OF THE STUDY

Financial reports provides an overview of a business profitability

and financial condition in both short and long term. They are necessary sources of accounting information about companies for wide variety of users. In. every business, there, needs information. This information needs ranges from financial, production, marketing etc. Generally, the larger the organization the greater the management need for information. Financial report plays a vital role in decision making process of business organizations. The main purpose of financial repots is the provision of financial information as a record making. It has been said that accounting is the language of business. It might also be said that the ability to apply accounting knowledge is critical to success in business: A business prepares various report at the end of each fiscal period. This report summarizes the changes that have taken place during the period. For this financial report to be useful, the data be presented in such a way that the user will recognize, Similarities, differences and trends form one period to another to enable them make decisions. The accounting information contained in the financial reports enables management to make more inform decisions. Financial report should provide adequate information in all areas of organization and economic activities; it should be able to disclose clearly the nature and accurate accounts of the transactions fun which the true and fair view financial position of the organization can be ascertained. 



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