Analyzing the Role of Accounting Information in Decision Making of Nigerian Organizations

Onwuka; Onwuka Okwara Ph.D; John Okey Onoh PhD; Uche Okoro Orji Ph.D

doi:10.56201/jafm.vol.12.no4.2026.pg347.372

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Analyzing the Role of Accounting Information in Decision Making of Nigerian Organizations

Onwuka, Onwuka Okwara Ph.D, John Okey Onoh PhD, Uche Okoro Orji Ph.D

Abstract

This study examines the role of accounting information in decision making in Nigerian organizations. The study employed a quantitative cross-sectional survey design, using a structured questionnaire with a 5-point Likert-type scale to capture respondents' perceptions on the subject. The study targeted business owners, managers, accountants, auditors, and business development consultants across major business hubs in Nigeria. A total of 110 questionnaires were distributed, and 76 were duly filled and returned, representing a response rate of 69.1%. The study tested two hypotheses: (1) Accounting information plays a significant role in decision-making in Nigerian organizations, and (2) There is a positive relationship between the use of accounting information and organizational performance. The study used descriptive statistics, reliability analysis, validity test, correlation matrix, and multiple ordinary-least-squares regression to analyze the data. The results show that accounting information has a significant positive impact on decision making, and use of accounting information has a significant positive impact on organizational performance. The study concludes that accounting information is a valuable resource for organizations, and its effective use can lead to improved decision making and organizational performance. The study recommends that Nigerian organizations should invest in accounting information systems to improve decision making and organizational performance. The study also recommends that accounting professionals should provide relevant and timely accounting information to support decision making. Further research is needed to examine the impact of accounting information on other aspects of organizational performance, such as innovation and sustainability. The study supports the Agency Theory (Jensen & Meckling, 1976) and the Resource-Based View (Barney, 1991). The study demonstrates the use of quantitative methods in JAFM studying the role of accounting information in decision making. The study recommends that policymakers should encourage the use of accounting information in decision making to improve organizational performance. The study contributes to the literature on accounting information and decision making in several ways. First, it provides evidence on the role of accounting information in decision making in Nigerian organizations, which is a neglected area of research. Second, it examines the impact of accounting information on organizational performance, which is a critical aspect of organizational success. Third, it provides insights on the use of accounting information in decision making, which can inform policymakers and practitioners on how to improve organizational performance. The study has several implications for theory, methodology, and policy. First, it supports the Agency Theory (Jensen & Meckling, 1976) and the Resource-Based View (Barney, 1991), which suggests that accounting information is a valuable resource for organizations. Second, it demonstrates the use of quantitative methods in studying the role of accounting information in decision making, which can inform future research. Third, it recommends that policymakers should encourage the use of accounting information in decision making to improve organizational performance, which can inform policy decisions. In conclusion, this study provides evidence on the role of accounting information in decision making in Nigerian organizations. The study recommends that Nigerian organizations should invest in accounting information systems to improve decision making and organizational performance. The study also recommends that accounting professionals should provide relevant and timely accounting information to support decision making. Further research is needed to examine the impact of accounting information on other aspects of organizational performance, such as innovation and sustainability.

Keywords

AnalyzingRoleAccounting InformationDecision Making & Nigerian Organizations

References

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JAFM Questionnaire Section A: Demographic Information 1. What is your profession? - Accountant - Auditor - Business Owner - Manager - Consultant 2. Years of experience: - Less than 5 years - 5-10 years - 11-20 years - More than 20 years Section B: Importance of Accounting Information 1. Accounting information plays a crucial role in organizational decision-making. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 2. Financial statements are essential for assessing company performance. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 3. Accounting data helps in identifying areas for cost reduction. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 4. Management relies heavily on accounting reports for strategic planning. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 5. Accounting information aids in evaluating investment opportunities. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) Section C: Use of Accounting Information in Decision Making 1. Accounting information is regularly used for budgeting and forecasting. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 2. Financial ratios are key in assessing company performance. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 3. Accounting data influences pricing decisions. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 4. Management uses accounting information for performance evaluation. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 5. Accounting reports guide risk management decisions. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) JAFM Section D: Challenges in Utilizing Accounting Information 1. Inaccurate data hinders effective decision-making. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 2. Limited access to real-time financial data is a challenge. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 3. Accounting systems are not integrated with other business functions. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 4. Financial reporting is not timely. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 5. Staff lack sufficient training on accounting systems. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) Section E: Future Outlook 1. Accounting information will become more critical in decision-making. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 2. Technology will enhance accounting data analysis. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 3. Accounting professionals will play a more strategic role. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 4. Regulatory requirements will increase demand for accurate accounting information. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree) 5. Investment in accounting systems will yield significant returns. 1 (Strongly Disagree) 2 (Disagree) 3 (Neutral) 4 5 (Strongly Agree)

Analyzing the Role of Accounting Information in Decision Making of Nigerian Organizations

Abstract

Keywords

References

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