CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

Financial accounting covers those activities related to the preparation of certain reports which are known as financial statement. These statements report the financial status of a firm at a particular time the firm activities and resulting profit or losses during the most recent period and the flow of resources occurring within the firm during the same period.

According to Montgomery A.T (1978) gives us an idea on the meaning of financial accounting as a specialized branch of accounting that keeps track of a company’s financial transactions.

However the questions arises what are the efforts of these financial account reports in the management of business?

The answer poses a problem which the paper will seek to solve. Not all business persons understand the impact of financial accounting information on the management of their business, some managers business intuitively. Other, like traffic defaulters who disobey road signs, disobey the warning of communicated by financial accounting information and end up in a ‘Business Accident’There other sources of information which have impact on the business management and the combination of these sources give an information system in the complex nature

According to Bieman H. Jr and Diebin (1972) defined accounting as the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business.

Moreover, financial accounting information usually comes in the disguised form by ‘’wearing’’ the cloak of technicalities. Such technicalities include calculations which need expert knowledge in its interpretation. But when some business because of layout, cannot employ such experts hands, they tend to ignore financial accounting information system which has an effect on the management of any business concern. The problem is: do all businessmen know this?  This is the question that the researcher seeks to answer also.

1.2                Statement of the Problem

Is very important for the functioning of any business. The financial accounting system in most business organization system. The flow of information, the cost of collecting any information and the internal control procedures has some loops hole.

In reality, it would be impossible for the researcher to study all the information system in all or even one of the organizations. The study therefore involves the study of some typical financial accounting reporting on the management of a business. The researcher will carry out an empirical study and appraisal of a business financial accounting and see whether there is a room for improvement to be made. It will therefore involve a review of the financial accounting and its related procedures.

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