The Use of Management Accounting Practice in Managerial Decision Making, A Case Study of Selected Real Estate Companies in Addis Ababa
No Thumbnail Available
Date
2018-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
In every organization decisions are regularly made as part of smoothening activities of the
organization and to achieve their objectives. Decision makers use different types of information
to make these valuable decisions. Accounting information is one of the information that
managers and other concerned bodies use when they make decisions. International Federation
of Accountants (IFAC) 1998 had identified the field of organizational activity encompassed by
management accounting has developed through four evolutionary stages, that are the cost
determination and financial control, information for management planning and control,
reduction of waste of resources in business processes and creation of value through effective
resource use. In view of this, the current study undertaken with the aim of investigating the
management accounting practices & evolutionary stages in selected real estate companies in
Addis Ababa city and to identify the types of decisions that managers often make and assess
whether managers use management accounting information in decision making and help them
to be effective in their decisions. The data used in this study was obtained through
questionnaire. Questionnaire was prepared and distributed to finance managers, marketing
managers, construction managers, office engineers and accountants. The current study provides
empirical evidence to infer that the utilization of Stage 1 is dominantly applied and most of
Stage 2 of management accounting techniques is still applied in practice. The results show that
the use of management accounting information for decision making is very low and the
management’s focus towards management accounting is below the required level. The findings
of the research can be specifically informative for policy makers’ intent on developing
management accounting skills among firms in Ethiopia. This study recommends the creation
and enhancement of awareness among firms on the importance of Information for decision
making practices as this is the most highly used management accounting practice amongst the
real estate companies in Ethiopia.
Description
A Thesis Submitted to the Department of Accounting and Finance to Undertake a
Research in Partial Fulfillment of the Requirements for the Master of Science
(MSc) Degree in Accounting and Finance
Keywords
Accounting Information, Decision Making, Management Accounting