MANAGEMENT ACCOUNTING AND ITS APPLICATION TO ORGANISATIONAL, PLANNING, CONTROL AND DECISION MAKING CASE STUDY OF NIGERIA BREWERIES PLC.
CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
In every business organization today, Management Accounting serves as the ‘language’ used by businesses to communicate both financial information and non-financial information to individuals and groups who have an interest in how the business is performing. From a management accounting point of view the primary purpose of management is to plan, control and make decisions that may be classified as marketing, production, and financial. The tactical decisions which must be preceded by strategic decisions provide the historical data from which the accountant prepares financial statements. The business firm or enterprise is an organizational structure in which the basic activities are departmentalized as line and staff. The organization is run or controlled by individuals collectively called management. Every organisation has managers, however, these managers have a responsibility to the organisation’s stakeholders to manage the organisation in the most-effective and most-efficient way, to maximize the organisation’s potential, thus it involves the managers undertaking adequate planning for the short-term and long-term future of the business, ensuring that the business is being properly controlled to ensure plans succeed, and making decisions that will enable the business to survive and grow in the future. The management faces a broad array of decisions, including production, marketing, financial and other decisions.
Having in mind that decision making is a fundamental part of management such decisions about the acquisition of equipment, mix of products, methods of production and pricing of products and services confront managers in all types of organizations. though, The fundamental objective of planning is to assist management in deciding how to allocate an organisation’s resources, while Control is a key feature of management accounting and follows on from planning, it can be exercised at a strategic and / or an operational level, while decision making process . Management accounting equips managers with information required to carry out these tasks. Management accounting is an important part of the economic information system, with a key role in decision making, whether we talk about small and medium enterprises or large companies. However, management accounting is superficially treated in most economic entities, The format and content of management accounts depend upon the specific requirements of management. Different businesses will have different information requirements and their individual management accounts will reflect this. As internal reports, management accounts will often contain business-sensitive information for a restricted audience and can focus on both financial information and non-financial information, such as critical success factors (measures of factors or aspects of an organisation’s performance deemed to be critical, or essential, to its competitive advantage and thereby its success).
