TOPIC: ACCOUNTING INFORMATION SYSTEMS AND STRATEGIC DECISION MAKING.

CHAPTER ONE.

1. Back ground.
Organisations, large or small measure their success on the basis of the information they posses
and how well the information is maintained.
Lucy (2005),in all but the smallest organisations management rarely observe operations directly,
they attempt to make decisions, prepare plans and control activities by using what they can
obtain from formal sources.
Management is forced by an accelerating rate of change, an over complex environment and, at
higher levels, by considerable uncertainty.
Ideally, managers should be able to define the type of information they require and the
management information system should be able to supply it. In practice, ofcourse, it does not
happen like this and managers have to use whatever information is available, from whatever
source, said Drucker.
The manager will never be able to get all the facts he should have. Most decisions have to be
based on the incomplete knowledge either because information is not available or it would cost
too much in time and money to get it. There is nothing more treacherous, more common, than the
attempt to make precise decisions on the basis of coarse and incomplete information. Drucker
(1993).
inspite of the difficulties of producing it, managers need relevant and timely information to assist
them to plan, to control, and to make decisions

The classical management theorists viewed decision making as the centre of managerial
activities, Cole (1995). Although we now know that this is not exactly the case, decision making
remains one of the managers' more challenging roles.
Information systems have helped managers communicate and distribute information; however,
they have provided only limited assistance for the mamnagement decision making.
Differences in decision making can be classified by organisational level. Anthony (1965) grouped
decision making in an organisation into three categories that is the strategic, management
control, and operational control.
However the study is based on the strategic decision making that determines the objectives,
resources and policies of the organisation.
The major problem at this level of decision making is predicting the future of the organisation and
its environment and matching the characteristics of the organisation to the environment. Gorry
and Scott-Morton (1971), said this process generally involves a small group of high level
managers who deal with very complex, non-routine prblems.

1.1. Statement of the problem.

Accounting systems are often the most important formal sources of information in business
organisations. They are designed to provide all levels of management with timely and reasonably
accurate information to help managers make decisions which are in agreement with their
organisation's goals. It is therefore surprising to find the reports that managers, in adapting to
accounting information systems, deliberately falsify data and make decisions which may be
detrimental to the long-term interests of the organisation. Anthony G. Hopwood .The journal of
accounting research, Vol.10 (1972), pp.156-182.
Thus the study seeks to ascertain the effectiveness of accounting information systems on
strategic decision making in business organisations.

1.2. The objectives of the study.

i) To examine the extent to which managers rely on accounting information in formulating
strategic decisions.
ii) To assess the role of accounting information on decision making.
iii) To establish the relationship between the accounting information systems and stragic decision
making.

1.3. Research questions.

i) To what extent do managers rely on accounting information in making strategic decisions?.
ii) What is the role of accounting information in decision making?.
iii) what is the relationship between the accounting information systems and the strategic decision
making?.

1.4. scope of the study.

The study will be limited to accounting information systems as independent variable and strategic
decision making as an dependent variable.

1.4.1. Geographical location.

The study will be carried out in kampala district and it will cover selected commercial banks of
Uganda (that is Stanbicbank, Barclays bank,and Centinary bank) as its case study and source of
data. These commercial banks have been selected due to their porpularity, accessiblity, and as
the reknown users of accounting informatin systems in Uganda.

1.5. Significant of the study.

i) The study will benefift these business organisation to evaluate the effectiveness of their
accounting information systems in decision making.
ii) The study will also help the organisations to identify its weaknesses and strengths and
therefore how to improve ion their systems to become more effective.
iii) it will also befit the researcher to finish his degree after asuccessful completion of the study.

1.5.1. Hypothesis of the study.

The study hypothesis is that if all that has been presented in this study is put into use, the study
will lead to improvements in decision making at all levels of the organisation using the accounting
information.