CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
According to Reece, (1975), the accounting profession essentially involves the supply of information to decision makers. Hence, it is not surprise that accountants have always been involved in many information related problems. The need for this involvement is underscored by the avowed aim of accounting which according to the American association committee to prepare A statement of basic accounting theory (SOBAT, 1961). SOBAT, (19610, described Accounting as the provision of relevant economic information to permit informed judgment and decision by users of the information. The attainment of this objective, necessarily, requires both the identification as well as the disclosure of adequate amount of information considered relevant by the users.
Financial accounting covers those activities related to the preparation of certain reports which are known as financial statements. These statements report the financial status of the firm at a particular time the firms activities and resulting profits and losses during the most recent period, and the flow of resources occurring within the firm during the same period. Information, according to Reece, (1975) is a fact, datum, observation, perception or any other thing that adds to knowledge. According to Joan, (1978), information is the information is the life wire of any organization. He further said that the success of any organization whether profit or non-profit oriented depends particularly on how the information needs of the different levels of management are met. Information can either be quantitative or non quantitative and out of many quantitative information, accounting is one. It is distinguished from other types of information because it is usually expressed in monetary terms, though non-monetary information are also often contained in accounting reports in order to enhance the understanding of the manager. Joan, (1978) affirmed that accounting information serves various uses; these users have different decisions to make and consequently, their information often differ.
Leave a Reply
You must be logged in to post a comment.