CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
The accounting profession essentially involves the supplying of information to decision makes hence it is no surprise that accounting has always been involved in many information related problem. The need for this involvement is understood by the avowed aim of accounting which according to the America accounting association committee is to prepare a statement of basis accounting theory (ASOBAT 1961) The attainment of this objective requires both the identification as well as the disclosure of an adequate amount of information considered relevant to the users. Financial accounting covers those activities related to the preparation of certain reports which are known as financial statement. These statement report the financial status of the firm at a particular times, the firms activities, resulting profit and the flow of resources occurring within the firm during the same period.
Financial accounting information therefore it the information derived from the financial accounting books, journals and report. The essence of this information is for the management and other users to makes decision and the accuracy of this decision making depends on the effectiveness and efficient application of the financial information, the design of management information system (M.I.S). Decision making, itself can be described as science of choosing among possible management action. In other words, the art / science of decision making or a combination of these enable management of a business to choose from among a range of already anal used and evaluated alternative. Two major classes of decision makes can identified in respect of the use of financial accounting information. They are the external and internal users external users include creditors, shareholder government agencies, respondents and trade union etc. while management on the other hand represent the internal user. Whether a business is a corporation partners or solo proprietorship, financial accounting as information system has an effect on its management The impact of financial accounting information on the management of any business cannot be over looked, though the extent of such an impart may not be the same for every business. This study being about the effect of financial accounting information on managerial decision will seek to inquire into monetary, and financial information arranged in a professional accounting manner will influence managerial decision.