An Evaluation of the Effectiveness of Management Accounting in Aiding Decision Making.

Topics: Management accounting, Management, Decision making Pages: 31 (7027 words) Published: October 13, 2010

Research proposal


An evaluation of the effectiveness of Management accounting in aiding decision making.

Statement of the problem
Does management accounting contribute positively to the financial performance of the organisation?

Main research problem
The research aims to evaluate the role of management accounting in contributing to the decision making process and financial position of the company.

Sub-Problems of the research

Modifications of management accounting in the current changing environment in the country (mode of production and business complexity.)

Hypothesis (Alternative and null)

Management accounting plays an effective role in contributing to the decision making process and financial performance of the organisation.

Research Questions 223979 224327 228894

1. What is management accounting and how does it differ from financial accounting? 2. What is the role of management accounting and is the role effectively played played considering the prevailing economy in the country. 3. Does management accounting plays a vital role in the company and does it have a positive contribution to the financial performance of the company? 4. Due to modifications in the system of management accounting what additional roles should be adopted by the company to cope with the changing environment? 5. What are the changes experienced in companies in their systems of management accounting due to the nature of the economy? 6. How does management accounting help attain set standards and policy setting? (Budgets, costing techniques, projects appraisal.)

Research Objectives

To give a clear definition of management accounting.
To differentiate between management accounting and financial accounting. To give major roles of management accounting.
To ascertain whether management accounting contribute positively to the financial performance of the company. To highlight changes to the management accounting system due to changes in the current technology. To make recommendations as to how and why the company should adopt to changes in management accounting.

Significance of the study

-to the institution
-to the student
-to the organisation – Anchor Yeast

1. Responses provided to be unbiased
2. The company has a going concern.
3. Management act in the best interest of the company.
4. Information obtained reflects events of normal activities of the company.


The research will be based on the Management Accounting system at Anchor Yeast, a Yeast manufacturing company for the period……………………. to …………………


-Confidentiality of information
-Financial constraints

Definitions of terms

^Financial accounting
^Management accounting
^Decision making
^Research methodology – questionnaires
- interviews

Literature Review

-History and development of Management Accounting
-Relationship between management accounting and financial accounting -The role of management accounting within the organisation
-Types and importance of budgeting
-Feasibility of the role of management accounting in aiding decision making. Research Methods

1.Population………………sample………………..Research designs. 2. Instruments for data collection………..Primary and Secondary. 3. Questionaires
4. Interviews >Commenting on reliability and validity.

Data Presentation and analysis

Types of questions

1. How frequent do you take budgeting in your company to ensure that set standards are attained? 2. Do you face any problems when preparing budgets considering a need for the decision to be made? 3. Which costing technique do you consider most suitable in your organisation? (Marginal, absorption, ABC or standard costing) 4. Is the costing technique used at your company...
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