COST AND MANAGEMENT ACCOUNTING PRACTICE IN AN ORGANIZATION

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The purpose of this study is to explore Cost and Management Accounting Practices utilized by Organizations. The findings are expected to contribute to the existing literature about the subject, especially in developing markets. At the heart of nations’ economic success or failure is the performance of individual businesses, which itself reflects the quality of decisions made by businessmen. To make decisions, businessmen require information, including accounting information. Despite the lack of detailed research into the accounting records of businesses, and how they were used to influence decision making, there has nevertheless grown up a conventional wisdom directed at the inadequacy of costing data for decision making, the non-adoption of best practice by businessmen, and the failure of accountants to provide the lead in the construction of costing systems.(Pollard 2001). Recent archival-based research however has begun to loosen importance elements of this conventional wisdom, and the purpose of this project is to summarize its findings and to examine its implications for a broad-based assessment of the development of Cost and Management Accounting Practice in an Organization.

1.2 STATEMENT OF PROBLEM

One of the most critical problems as regards to this study is that: is the available Accounting Information resulting from Cost and Management Accounting Practice so reliable in such a way that it will aid and facilitate decision making? Another problem is that, there has been lack of detailed research into the accounting record of businesses and how they are used to control decision making, due to this, Accounting Information has lost their relevance on investor’s decisions and business Management decision making. Another reason for this is not far fetch; it is because of a past record of ineffectiveness of Accounting Information in Organization. There is inability of managers to embrace the new technology in Management Accounting Practice. There is also the problem on the ground that some accountants as well as business firm still have not been able to adopt the best practice of Cost and Management accounting which could bring about enhancement in decision making.