HARARE POLYTECHNIC

APPROVAL FORM

The undersigned certify that they have read and recommended to Harare Polytechnic for
acceptance; a project titled “An analysis on the adoption of accounting information as a major
tool for decision making”, submitted by Abigail R. Nawasha in partial fulfilment of the
requirements for the Higher National Diploma in Accountancy.

NAME OF SUPERVISOR:.....................................SIGNATURE:..................................

EXTERNAL ASSESSOR:......................................SIGNATURE:..................................

DATE:.....................................

ii
 HARARE POLYTECHNIC

RELEASE FORM

NAME OF AUTHOR: Abigail Ruth Nawasha

TITLE OF PROJECT: An analysis on the adoption of accounting information as a

major tool for decision making

PROGRAMME FOR WHICH PROJECT

WAS PRESENTED: Higher National Diploma in Accountancy

YEAR GRANTED: 2015

Permission is hereby granted to the Harare Polytechnic Library

to produce single copies of the project and to lend or sell such
copies for private, scholarly or scientific research purposes only.
The author reserves, other publication rights and neither the
project nor extensive extracts from it may be printed or
otherwise reproduced without the author’s written permission.

SIGNED:.............................................

PERMANENT ADDRESS: 7035 Nhoro Extension

Ruware Park
Marondera

DATE: November 2015

iii
 DEDICATION

This research is dedicated to my parents and my sister who played an essential role in
assisting me to achieve my goals through their support both financially and socially.

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 ABSTRACT

The aim of the study is to analyse the adoption of accounting information as a major tool for
decision making. The literature on the research study constituted all the objectives of the
research study and what other authors have said about accounting information and its influence
on decision making. Interviews were used as the main data collection tool and used together
with the questionnaire in the collection of data. The information obtained from the data
collected was analysed by making use of tables and graphs. From the research conducted, the
research findings indicate that accounting information should be adopted during decision
making. Accounting itself is a language of business, and before venturing into any business,
one must understand the language of such business, so as to know the right method to achieve
the stated goals and objectives. Eliminating accounting information has a significant negative
bearing on the organisation that is why it is important. Research findings also indicate that by
not acknowledging accounting information can leave out important factors unattended that are
vital to organisational growth and expansion. The research study ultimately reflect that the
adoption of accounting information is significant to an organisation as it can identify the
strengths, weaknesses, opportunities and threats of an organisation through making use of
various types of accounting information.

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 ACKNOWLEDGEMENTS

First and fore most I would like to thank the almighty God for his unwavering guidance and
strength throughout the research project. I would also want to pass my heartfelt gratitude to my
supervisor, Mr. Gwenere for assisting me with the necessary support and direction on how to
carry out my project successfully. I am grateful to my parents for their support especially
financially. I would also want to express my gratitude to staff at Young Women Christian
Association for assisting me with the relevant information to ensure the relevant progress in my
research study. I am also grateful to my friends Faith Chiridza and Tinevimbo Shumba for their
support.

MAY GOD RICHLY BLESS YOU!!!

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Table of Contents

APPROVAL FORM.....................................................................................................................ii
RELEASE FORM........................................................................................................................iii
DEDICATION.............................................................................................................................iv
ABSTRACT..................................................................................................................................v
ACKNOWLEDGEMENTS.........................................................................................................vi
LIST OF TABLES.......................................................................................................................ix
LIST OF FIGURES.......................................................................................................................x
LIST OF APPENDICES..............................................................................................................xi
CHAPTER 1..................................................................................................................................1
1.1 Introduction....................................................................................................................1
1.2 Background of the study.................................................................................................1
1.3 The Research Problem....................................................................................................4
1.4 The Research Questions.................................................................................................4
1.5 Aim.................................................................................................................................5
1.6 Objectives of the study...................................................................................................5
1.7 Assumptions of the study...............................................................................................5
1.8 1.8 Statement of Hypothesis...........................................................................................5
1.9 Delimitations of the study...............................................................................................5
1.10 Limitations......................................................................................................................6
1.11 Definition of some of the key terms...............................................................................7
1.12 Summary.........................................................................................................................8
CHAPTER II.................................................................................................................................9
2 REVIEW OF RELATED LITERATURE.............................................................................9
2.0 Introduction....................................................................................................................9
2.1 Types of Accounting Information..................................................................................9
2.1.1 Quantitative (Financial Information).......................................................................9
2.1.2 Non-Financial Information....................................................................................11
2.1.3 Usefulness of the types of accounting information...............................................12
2.2 Quality and value of accounting information...............................................................13

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 2.2.1 Characteristics of Accounting Information...........................................................15
2.3 Users of accounting information..................................................................................18
2.4 The role played by accounting information and its impact on decision making..........19
2.4.1 The role played by accounting information on decision making..........................19
2.4.2 The impact of accounting information on decision making..................................20
2.4.3 Phases of decision making....................................................................................21
2.5 Summary.......................................................................................................................23
3 RESEARCH METHODOLOGY.........................................................................................24
3.0 Introduction..................................................................................................................24
3.1 Research Design...........................................................................................................24
3.2 Sources of data..............................................................................................................24
3.2.1 Primary Data..........................................................................................................24
3.2.2 Secondary data......................................................................................................25
3.3 Research instruments....................................................................................................26
3.3.1 Interview schedule.................................................................................................26
3.3.2 Questionnaire.........................................................................................................27
3.4 Reliability and validity of research instruments...........................................................27
3.5 Population.....................................................................................................................28
3.6 Sampling and sampling techniques..............................................................................28
3.7 Data collection techniques............................................................................................29
3.8 Data analysis and interpretation....................................................................................29
3.9 Ethical considerations...................................................................................................30
3.10 Conclusion....................................................................................................................30
CHAPTER IV.............................................................................................................................31
4 DATA PRESENTATION AND ANALYSIS.....................................................................31
4.0 Introduction..................................................................................................................31
4.1 Analysis of responses from questionnaires...................................................................31
4.2 Types of accounting information..................................................................................33
4.2.1 Usefulness of the above mentioned types of accounting information...................35
4.3 Quality and value of Accounting Information..............................................................36
4.4 Users of Accounting Information.................................................................................37
4.5 Role of accounting information and decision making..................................................39

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 4.6 Analysis of responses from the interview.....................................................................42
4.6.1 What do you understand by the term “Accounting Information”?.......................42
4.6.2 What are the types of Accounting Information?...................................................42
4.6.3 How useful are those types of accounting information you use to the organisation
as a whole?............................................................................................................42
4.6.4 Quality and Value of Accounting Information......................................................43
4.6.5 Are you aware of the users of accounting information and to what extent are the
users being accorded their full right to this information?.....................................43
4.6.6 What are some of the major aspects taken into consideration during decision
making?.................................................................................................................44
4.7 Summary.......................................................................................................................46
CHAPTER V...............................................................................................................................47
5 SUMMARY, CONCLUSION AND RECOMMENDATIONS..........................................47
5.0 Introduction..................................................................................................................47
5.1 Summary of the research study.....................................................................................47
5.2 Summary of findings....................................................................................................48
5.2.1 To analyse the types of Accounting information and its usefulness to YWCA....48
5.2.2 To examine the quality and value of accounting information...............................48
5.2.3 To identify the users of accounting information...................................................48
5.2.4 To find out the role of accounting information and its impact on decision making.
...............................................................................................................................48
5.3 Conclusion....................................................................................................................49
5.3.1 Types of Accounting Information.........................................................................49
5.3.2 Quality and value of accounting information........................................................49
5.3.3 Users of Accounting Information..........................................................................49
5.3.4 The role of accounting information and its impact on decision making...............50
5.4 Recommendations.........................................................................................................50
5.5 Conclusion....................................................................................................................51
References...................................................................................................................................52

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LIST OF TABLES

TABLE NAME PAGE

4.0 31
4.0 32
4.1 33
4.1.2 34
4.2 35
4.3 36
4.4 37
4.4.1 38
4.5 39
4.5.1 40
4.5.2 41

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LIST OF FIGURES

FIGURE NAME PAGE

4.0 31
4.0 32
4.1 33
4.1.2 34
4.2 35
4.3 36
4.4 37
4.4.1 38
4.5 39
4.5.1 40
4.5.2 41

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LIST OF APPENDICES

TITLE
APPENDIX 1 Letter of authorisation
APPENDIX 2 Interview schedule
APPENDIX 3 Questionnaire
APPENDIX 4 Proposal

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 CHAPTER 1

1.1 Introduction
Accounting Information is a piece of financial data indicating an organisation’s financial
resources, debts and expenses. This study aims to analyse the adoption of accounting
information as a major tool for decision making.

This chapter discusses the background of the study, research problem, research questions,
aim of the study, objectives of the study, assumptions of the study, delimitations and
limitations of the study as well as definition of the key terms.

1.2 Background of the study

Accounting is the language of business as it is the basic tool for recording, reporting and
evaluating economic events and transactions that affect business enterprises. It processes all
documents of a business financial performance from payroll, cost, capital expenditure and
other obligations to sale revenue and owners’ equity. It provides financial information
about one’s business to the internal and external users, such as managers, investors and
others. It is sometimes referred to as a means to an end, with the ending being the decision
that is helped by the availability of accounting information (Arneld and Hope 1990:153).

Almost all the organisations are aimed towards the attainment of their desired, planned and
overall objectives. In every operation of an organisation they are aimed towards efficiency
and proper effectiveness for this to be achieved to a large extent depends on the accounting
information and how the information will be utilised by the organisation. However,
information is the life wire of every business, so for any business to succeed in today’s
rapidly changing environment, the management must update itself with current and relevant
information that will be beneficial towards achieving their predetermined objectives
because without it there is likely to be stagnation.

When looking into the importance and usefulness of accounting information to

management, it will be relevant to state clearly that there is other information that
management uses in decision making. Like information by Engineers, Lawyers, Doctors,

1
Architects and other company’s officials, but however, that information by an accountant
goes a long way to determine the assets base of a company and its liabilities to determine its
cost price of production in pricing its products and also in determining when profit or loss is
made.

Accounting information measures the progress of an organisation and is used in decision

making for the selection of a single course of action for several dissimilar and unrelated
alternatives. It has been observed that decision making is the final process in managerial
process, but however, the relevance of a decision by management depends on the accuracy
and relevance of accounting information supplied by the accountant.

When the decision involves business and economy questions, accounting information is
essential to the decision system because it provides quantitative information for three
functions: planning, control and evaluation.

- Planning is the process of formulating a course of action, it includes setting a goal,

finding alternative ways of accomplishing the goal and dividing which alternative is the
best course of action.
- Control is the process of seeing that plans are, in fact, carried out. In other words, do
actions agree with plans? At this point, the accountant might be expected to give
information on actual costs, as compared with cost planned earlier
- Evaluation involves the whole decision system as a process of studying the decision
system to improve it. It asks the question, “was the original goal met (Feedback)? If not
the reason could have been poor planning or control or wrong goal was chosen.

Accounting information may include important task, that is, the presentation of weekly,
monthly or quarterly accounts. These routine accounts may include a trading and profit and
loss accounts showing figures for the period concerned and the year to date and the balance
sheet. The routine job is to help management in planning and forecasting future results. The
process is known as budgeting and is considered, together with budgetary control.

2
It is of utmost important to make mention of other users of accounting information or
reports apart from management like:
 Government who really is interested in profit to help them determine task and other
policies
 The creditors, who really as interested in whether the organization as creditor worthy.
 Employees, a good profit or consistent growth or build up in profit may be a signal to
them to demand for more bonus.
Finally, the society where the community is located really want to be employed have
essential amenities through the influence of the firm.

Young Women Christian Association (YWCA) Council of Zimbabwe is a membership run

organisation with branches across Zimbabwe. It is part of a global movement of women
who share a similar passion to empower women in their communities. In branches in the
various provinces where YWCA is, members both young and old do different branch led
activities and programs. The youth members of the branches are coming together as young
women and some men with the purpose of improving their lives and other youth in the
community.

Branch-led programs include for example Bible Studies, HIV and AIDS awareness,
appropriate Technology/ skills training, peace building, sports and recreational activities
and networking with other youth based organisations.

YWCA has its National Office in Masasa, Harare where all reports from the branches are
submitted. Also, as part of its income generating activities, YWCA owns and runs a hostel
and conference center situated in Westwood, Harare. This hostel offers budget
accommodation and meals for travelers and has conference facilities on site. This is the
major income generating activity for the organisation at the moment. This hostel reports all
its activities in the form of a report to the National Office at the end of each month and then
analysed by management and executive during their meetings.

Usually in this report, information that is included is usually about how many bookings
were received during that period and how much money was received from those bookings

3
 and how it was used for expenses. As such, the National office is the central point where
management is located but the executive management often meets to discuss affairs of the
organisation. However, management usually makes decisions on how much of the income
received that should be spent on a list of given expenses that is compiled by the Finance
Department.

Many decisions such as investment decisions, economic decisions and capital budgeting
decisions need to be made at YWCA and most of the decisions involve cash transactions
that comprise of Accounting Information. Of late, the organisation has been facing serious
liquidity problems that have risen as a result of not acknowledging accounting information.
Management will not be aware of the current financial position of the organisation at a
given date in order to formulate future plans and also budgeting. This information is vital as
it can and will indicate performance and also points out opportunities for the organisation.

1.3 The Research Problem

The problem that remained is why is it that management has not been able to accord the
desired attention to accounting information when making decisions. The inability of
management to recognise accounting information as an all-important survival remains to be
looked into and appreciate attention, given towards re-orienting management. How is it
interpreted and presented to the management and the researcher also will see if accounting
information influences their decisions, if yes, to what extent.

1.4 The Research Questions

To answer the main problem, the following sub problems had to be answered first:

1. What are the types of accounting information maintained by YWCA?

2. What is the quality of accounting information to management?
3. Who are the users of accounting information?
4. Will the role of accounting information have an impact on decision making?

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1.5 Aim
The main aim of the study was to analyse the adoption of accounting information as the
major tool for decision making.

1.6 Objectives of the study

The research objectives of this study were:

1. To analyse the types of accounting information and its usefulness to YWCA.

2. To examine the quality and value of accounting information.
3. To identify the users of accounting information.
4. To find out the role of accounting information and its impact on decision making.

1.7 Assumptions of the study

During the course of the study the researcher had the following assumptions:
 The information gathered from the respondents was regarded to be as accurate as
possible.
 The researcher had enough money and resources to cater for most of the expenses
and other necessities that were incurred during the course of the project.
 The issues under research remained constant throughout the period of the research.

1.8 1.8 Statement of Hypothesis

Null Hypothesis
Accounting information has an impact on decision making
Alternative Hypothesis
Accounting information has no impact on decision making

1.9 Delimitations of the study

Physical Scope

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 The research was carried out in Harare at YWCA Council of Zimbabwe situated at 37
Corronation Avenue, Masasa. The study requires 7 months to be complete.

Theoretical Scope

This study was focused on Accounting Information as a single tool leaving out other
aspects that are important in decision making. Other departments will not be investigated as
it is focusing on the Accounting Department only

1.10 Limitations
As with any study, this study had its limitations.

 For reasons of confidentiality, some respondents were unwilling to release

information asked for. The researcher assured the respondents of the high level of
confidentiality in the information obtained and managed to gain their trust.
 Regardless of its high ambitions, most researches are constrained by resource
limitations, both financial and non-financial resources. Limitations of time, funding
and scope of the study required the research study to focus on a limited number of
objectives. Moreover the research problem and questions often directly or indirectly
involve multiple areas of accounting information while limits of time and funds did
not make all areas that can be investigated. The researcher used email to
communicate with members of staff at YWCA and also used some of her financial
resources to travel to and from YWCA to obtain information.
 Although the researcher was inexperienced as it was her first research project, she
managed to gather as much information as needed for the completion of the project.
She used her spare time even up until late at night.
 In most cases, management is not on seats and entails that the researcher will be on
the more always in trying to collect the required data from the management
involved. Some when they are around may shy away from disclosing their mode of
operation. The researcher also used email, telephone calls for communicating with
management when they were not available.

6
1.11 Definition of some of the key terms
Accounting: is the process of systematically recording, measuring, and communicating
information about financial transactions.

Accounting Information System: Human and capital resources of an organisation that is

responsible for the preparation of financial information and also information obtained from
the collection and processing of transaction data.

Decision Making the thought process of selecting a logical choice from the available
options. Making decision is necessary when there is no one clear course of action to follow.

Management is the art of working particularly through people, for the achievement of the
broad goals of an organisation and in trying to achieve these goals the manager has to map
out strategies to find out the accounting information suitable for the company.

YWCA stands for Young Women Christian Association

Financial statements: are concerned with classifying, measuring and recording the
transactions of a business. At the end of an accounting period it is useful to prepare the
following financial statements to show the performance and position of the business: a
profit and loss account, a balance sheet, cash flow statements and notes to the accounts.

Communication network is the channel through which the information system is

presented to the management for decision making and other interested publics

Financial Accounting is a type of information reported to and used those outside the
organisation.

Routine is the way by which the accounting information should be used regularly from
decision making

Budgetary tool is the total process of developing plans for a company’s anticipated
operations and controlling operations to aid in accomplishing those plans.
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1.12 Summary
This chapter was introducing the topic as well as the background of the study.
Objectives and aim of the study were also stated. The researcher also managed to come
up with the research question as well as sub questions that emanated from the main
research question. The next chapter (chapter II) will be looking at the review of related
literature.

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 CHAPTER II

2 REVIEW OF RELATED LITERATURE

2.1 Introduction
Literature Review is a summary and analysis of related literature, which will provide
background of the research. For the completion of the research project, the researcher looked
into theories put by other experts and authors.

This chapter will be looking at review of related literature for the research topic “Adoption of
Accounting Information as a major tool for decision making” as follows:

2.1 Analysing the types of accounting information

2.2 Examining the quality and value of accounting information
2.3 Identifying users of accounting information.
2.4 Finding out the role played by accounting information and its impact on decision
making.

2.1 Types of Accounting Information

According to Spiceland Sepe Tomasini (Guiding you learn Accounting 1999:55) there are two
types of Accounting Information which are:
 qualitative (non-financial)
 quantitative (financial)

2.1.1 Quantitative (Financial Information)

Otley D (1980:194-208) mentions financial accounting information (quantitative) as it
represents a formal record of the financial activities of an entity. These are written reports that
quantify the financial strengths, performance and liquidity of a company. Financial information
reflect the financial effects of business transactions and events on the entity. Otley D goes on to
mention the four main types of financial information as:
i. Statement of financial position
9
 ii. Income Statement
iii. Cash flow statement
iv. Statement of changes in equity

i. Statement of financial position

Otley D (1980:230) mentions the statement of financial position which is also known as
the Balance sheet, presents the financial position of an entity at a given date. It is
comprised of the following three elements:
 Assets: something a business runs or controls (e.g. cash, inventory, plant and
machinery etc.)
 Liabilities: Something a business owes to someone (e.g. creditors, bank loans,
etc.)
 Equity: what the business owes to its owners. This represents the amount of
capital that remains in the business to pay off its outstanding liabilities. Equity
therefore represents the difference between the assets and liabilities.

ii. Income Statement

Otley D goes on to mention the income statement also known as the Trading and Profit
and Loss Statement, reports the company’s financial performance in terms of Net Profit
or loss over a specified period. Income statement is composed of the following two
elements:
 Income: What the business has earned over a period (e.g. sales revenues,
dividend income, etc.)
 Expense: The cost incurred by the business over a period (e.g. salaries and
wages, depreciation, rental charges, etc.)
Net profit is arrived at by deducting expenses from income

iii. Cash Flow Statement

Cash flow statement presents the movement in cash and bank balances over a period.
The movement in cash is classified into the following segments:

10
  Operating Activities: Represents the cash flow from primary activities of a
business
 Investing Activities: Represents cash flow from the purchases and sale of assets
other than inventories (e.g. purchase of a factory plant)
 Financing Activities: Represents cash flow generated or spent on raising and
repaying share capital and debt together with the payments of interest and
dividends.

iv. Statement of changes in equity

Statement of changes in equity, also known as statement of retained earnings, details the
movement in owners’ equity is derived from the following components:
 Net Profit or loss during the period as reported in the income statement
 Share capital issued or repaid during the period
 Dividend payments
 Gains or losses recognised directly in equity (e.g. revaluation surpluses)
 Effects of a change in accounting policy or correction of accounting error

2.1.2 Non-Financial Information

According to Kim K (1999:85-99), non-financial Information is performing an increasingly
important role in accounting. It has the potential to add significant value, while simultaneously
providing challenges. Challenges associated with non-financial information include identifying
what it is, why it might be used, where it is appropriate to use, and how assurance activities
might be conducted. Generally, it refers to information that falls outside the scope of
mainstream financial accounting statements.

Non-financial reporting is sometimes referred to as:

 Social accounting
 Corporate social responsibility (despite applying across sectors)
 Environmental reporting
 Sustainability reporting

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  Service performance reporting
 Integrated accounting

The term is broad and at times misleading as it suggests that the information reported does not
direct financial impact. For example, changed consumer beliefs and shifts in societal attitudes
may be considered non-financial elements that have a potentially significant financial impact
(Hubber G, 1990:47-71)

In considering the benefits of relying upon non-financial information, it is important to

remember that non-financial information tools and frameworks were born out of dissatisfaction
with financial information in isolation. Ives B (1983:785-793). The result of such
dissatisfaction is evident when such tools such as the balanced scorecard and other performance
management systems are considered. It can add value and mitigate risk by providing a richer
account that considers more “forward looking” aspects in decision making. The questions of
what might constitute value and to whom it will vary depending on the view taken.

One common view is that non-financial information can be coupled with financial information
to deliver insight into organisational management and inform strategy (Anil Keimer 2008:194).
The provision of forward-looking information provides greater business intelligence and makes
more informed decision making. Furthermore the ability to collect and use broader and more
relevant information underpins the ability to minimise risk by pre-empting changes occurring in
the wider business environment and acting accordingly. Second view is that non-financial
information may communicate value in a way that financial information may not.

From the types of accounting information discussed above, it is also important to look at their
usefulness especially as the information can be used for decision making.

2.1.3 Usefulness of the types of accounting information

Accounting is known as the language of business, and as such it benefits management in many
ways. Accounting involves recording transactions and compiling them in reports. An important
advantage of accounting information over other types of information is that it is based on

12
numbers, measurable data. It is black and white: you have a profit or you have a loss--the
numbers speak for themselves. (Christuianson JK and Mouritsen J 1994)

When looking into the importance and usefulness of accounting information to management, it
should be noted that there are other information that management uses in decision making as
mentioned by Christuianson JK and Mouritsen J (1994). Like information by Engineers,
Lawyers, Doctors, Architects and other company’s officials, but however, that information by
accountant goes a long way to determine the assets base of an organisation as well as
identifying alternatives for the organisation.

Generally speaking, accounting information provides financial reports on daily and weekly
basis and also provides useful information for monitoring decision-making process and
performance of the organisation. Elvis Simon (1987) in his study used the first part of the
statement as measure of control for management and the second part for evaluating the
effectiveness of the accounting information via continuous monitoring.

Sheila Shanker (2011:14) mentions that accounting information is useful in that it is objective
and based on generally accepted accounting principles. These are rules to be followed in
accounting to make reports standard and comparable. Data entered in an accounting system is
verifiable data, not opinions or wishes. Accounting information is unbiased.

Another useful advantage of accounting information is that it is reliable. For example, when
you see $4000 in accounts payable, you owe that much to others. If you have questions about
that, reports can show you how that number was calculated. Numbers do not come out from
pies-in-the-sky. To make it to an accounting system, data has to make sense and to have proper
documentation to back it up. In a well-run accounting department, reconciliations are made and
procedures are in place to assure reliability and accuracy of information.

2.2 Quality and value of accounting information

Siegel (1982) cited: “Quality appears to be an important attribute of accounting information.
However, accounting quality is neither a readily measurable nor a generally agreed upon

13
characteristic of a firm.” Imhoff (1992) recognised the importance of Siegel’s citation and
added that accounting quality as a term is used to suggest that all accounting signals may not be
equally free of noise due to bias or measurement error or both. From this definition it can be
derived that accounting quality descents from accounting signals, which can be traced back
from financial reports.

Hoogendoorn and Mertens (2001:2) mention: “The better the usefulness of the financial
information for decision-making, the higher the quality of the financial information.” With this
statement, a link is laid to the importance of high accounting information quality. High
accounting quality provides useful information, which enables management to make better
decisions in order to improve the efficiency of the capital markets. Besides this argument,
Frankel and Li (2004) mention that accounting theory argues that financial reporting also
reduces information asymmetry by disclosing relevant and timely information.

Accounting information is said to be of good quality and value when the information provided
serves widely the requirements of the system users. Quality information should systematically
provide information which has potential effects on decision making process (Ives 1983:153).

Accounting information is usually categorised under two groups in order to bring out its quality
that is information that influences decision making mainly for the purpose of controlling the
organisation and information that facilitate decision making process and mostly used for
coordination within an organisation (Kren 1992:88). Hubber (1990), argues that integration of
accounting information leads to coordination in organisation, which in turn, increases the
quality of the decision. Some researchers in accounting shows that the effectiveness of
accounting information system depends upon the quality of the output of the information
system that can satisfy the users’ needs.

Quality of information generated from accounting information is very important for

management. Kim K (1999:56) argues that usage of accounting information depends on the
perception of the quality of information by the user. Quality of information depends on
reliability form of reporting, timeliness and relevance to the decision. Effectiveness of
accounting information system also depends on the perception of decision makers on the
14
usefulness of information generated by the system to satisfy informational needs for operation
processes, managerial reports, budgeting and control within organisation. Aggregation of
information is considered as means of collecting and summarising information within a given
time period. (Choe 1998:26).

The central activity of managers is to make decisions, the quality of these decision determines
the success and survival of organisation (Turbman & Loomba 1976). Nothing is more
important to management for decision making than a timely, objective summarised and
directing – attention – to – problem areas of accounting information. Thus all decision are
based on information in large parts the quality of management decisions will be a reflection of
the quality of the accounting and other information which it receives (Garrison 1982)

From the quality and value of accounting information, it is also important to mention the
characteristics of such information. For accounting information to be considered for decision
making, it should possess certain qualities and characteristics.

2.2.1 Characteristics of Accounting Information

As already analysed above, it has been established that there is qualitative and quantitative
types of financial information. These characteristics should be present in order for management
to make good decisions (Mia 1994)

Primary qualitative characteristics

According to Terry Lucey (2009:104) in his book Management Accounting, he
mentions specific qualitative characteristics that make accounting information useful
which are relevance and faithful representation. Both are critical. No matter how
representative, if information is not relevant to the decision at hand, it is useless.
Conversely, relevant information is of little value if it does not accurately represent the
underlying activity.

15
 i. Relevance.
To have relevance, accounting information should possess confirmatory value and/or
predictive value. Generally, useful information will possess both of these components.

ii. Faithful representation.

To be a faithful representation of business activities, accounting information should be
complete, neutral, and free from material error.

 Completeness means including all information necessary for faithful representation of

the business activity the firm is reporting.

 Neutrality means to be unbiased, and this characteristic is highly related to the

establishment of accounting standards. Sometimes a new accounting standard may
favor one group of companies over others.

 Freedom from material error indicates that reported amounts reflect the best available
information. As you’ll come to find out in this course, some amounts reported in the
financial statements are based on estimates, and the accuracy of those estimates is
subject to uncertainty. Because of this, financial statements are not expected to be
completely free of error, but they are expected to reflect management’s unbiased
judgments.

Secondary qualitative characteristics

The following secondary characteristics of accounting information are according to T
Lucey:

i. Comparability
Comparability allows business owners to review their companies and accounting
information against that of a competitor. Business owners use comparison to gauge how

16
 well their companies operate under certain market conditions. Owners often use the
leading company of an industry for the comparison process. These companies usually
have the most efficient and effective business operations. Non-comparable accounting
information can make this a difficult process. For example, business owners should
consider preparing financial statements according to standard accounting principles.
The statements can then be compared to other company’s financial standard prepared in
a similar manner.

ii. Verifiable or Reliability

This is the extent to which information is verifiable, representationally faithful, and
neutral. Verifiability implies a consensus among different measures. For example, the
historical cost of a piece of land to be reported in a balance sheet of a company is
usually highly verifiable. The cost can be traced to an exchange transaction, the
purchase of the land. However, the market value of that land is much more difficult to
verify. Appraisers could differ in their assessment of market value. The term objectivity
is linked often to verifiability. The historical cost of the land is objective but the land’s
market value is subjective, influenced by the measurer’s past experience and prejudices.
A measurement that is subjective is difficult to verify, which makes it more difficult for
users to rely on.

iii. Timeliness
It is also an important component of relevance. Information is timely when it is
available to users early enough to allow its use in the decision process. The need for
timely information requires that companies provide information to external users on a
periodic basis. Information is timely if it is available to users before a decision is made.

iv. Understandability
The information must be capable of being understood by the recipient. Typical ways to
increase comprehension are the following:
a. Avoidance of unexplained terminology
b. Use of charts, diagrams and tabulated information where appropriate

17
 c. Use of exception reporting and comparative figures
d. Good report and statement layouts
e. A reasonable, but not excessive, amount of redundancy
f. Eliciting the recipient’s views and suggestions regarding the
understandability of the information.

2.3 Users of accounting information.

John DuBois (2012:55) financial statements provide information regarding the position and
performance of a business, such as its assets, liabilities, equity, income, expenses and cash
flow. Users need this information to make investment, credit and operational decisions.
Individuals with a general understanding of business should easily comprehend the information
conveyed in these statements. The effectiveness of economic decision-makers depends on the
accuracy of these reports.

According to Hogget JR (1997:3), the ultimate objective of accounting is to provide

information in reports which can be used by internal and external decision makers. The
preparation of this information for users (decision makers) outside the entity is called financial
accounting. Such users might be investors, or creditors of the entity. The preparation of
information for use by decision makers inside the entity to plan and control operations is called
management accounting. Inside users means management. Management uses the same financial
statements as outside decision makers, plus internal reports and summaries prepared
specifically for it. Accounting reports can be special-purpose reports to meet the needs of a
specific user group, or general-purpose reports for the general use of external users.

Hogget (1997:11) goes on to elaborate that internal decision makers are managers at all levels
who use financial information for planning and controlling the operations of a business entity.
For managers to make decisions they need to know:
i) What resources are available?
ii) How much debt exists?
iii) How profitable are operations?
iv) What business should they be in?

18
 v) What are the most efficient processes?
vi) What effect may changes in selling prices have?
vii) Does the firm have sufficient cash reserves to meet obligations?
viii) Should the firm buy or lease resources?

They need data that will ensure that day-to-day and longer term operations to continue
successfully.

2.4 The role played by accounting information and its impact on decision making.
2.4.1 The role played by accounting information on decision making
According to George N, Root III (2013), the accounting department is responsible for business
tasks such as payroll, accounts receivable and inventory control. A comprehensive business
planning process requires the kind of information that the accounting department generates.
When you understand the relevance of accounting data in business decision-making, then you
can better utilise the critical business information being generated each day. George N, Root III
(2013) goes on to explain the role of accounting information as follows:

i. Financing
Accounting data is used by a company and potential investors to determine funding
needs for the organisation. The company analyses revenue to determine how much
money would be available to fund upcoming projects. If there is a gap in revenue,
then there is need to seek out funding. Potential investors and lenders look at assets
and liabilities to determine if the company is a safe investment or not.

ii. Budgeting
The constant flow of accounting data relevant to income, purchases, investments
and overhead is critical in creating the budget for the coming year. The information
gathered by the accounting department is used as a baseline to gauge actual
performance for the year and understand the basic costs of company operations.
Sales projections for the next fiscal year are added to the accounting data to create
the company's budgets.

19
 iii. Inventory
Maintaining proper inventory levels is important in keeping track of assets and
income as inventory gets purchased, stored in the warehouse and then sold to
clients. The accounting department keeps a close eye on the cost of incoming
inventory, how much it costs to finance that inventory until it is sold and the income
realised when the product is sold to a customer. All of that information is relevant to
determining how profitable your organisation is and where changes can be made to
lower the costs of inventory.

iv. Growth
Company growth is carefully outlined in the organisational business plan. When the
company plans its growth, it first looks at historical accounting data to determine
trends in revenue production and understand how the company spends money.
Accounting information plays a critical role in determining how much the company
can take on in liabilities and costs as it tries to make the right decisions on how to
expand profitability.

2.4.2 The impact of accounting information on decision making

In order to bring out its impact on decision making, it is of utmost importance to include the
decision making process as it will lay down each process. In each of the processes, the impact
of accounting information can be identified. A well-developed accounting system is a
continuing source of operational information for management. The quality of information
available to management will influence the success of the operating decisions based on that
information (Walenbagh et al 1998:204). In this section the researcher will consider
management decision-making process and the impact on decision making in each process.

Management and the decision making process

20
“Decision making requires that a choice be made among alternatives. Probably the finest
analogy of the business decision process is a well organised football team. Virtually all the
elements of the decision process are present in football – the awareness of the objectives and
goals that lead to winning the balancing of such short-run goals as first downs with the long run
goals of winning games and championships; the presence of organisation, strategy and tactics
in a “hostile” environment where inaction and poor performance results in losses, the
development of plays with the hope of achieving particular results, the moment of commitment
in the huddle, immediately followed by the period of execution and finally, the informal
execution when the game films are analysed.” (Melissa B 2007)

2.4.3 Phases of decision making

According to (Nicolau A 2000:91-105), decision making may be divided roughly into a
planning phase, an execution phase and an evaluation phase incorporating some form of
remedial feedback which are explained in detail below:

 The planning phase

It begins with goal identification, the specification of objectives to be sought or
accomplished. One of the most common business goals is the long run optimisation of
net income. Other goals include target growth rates in sales revenue or total assets and
target shares in various markets. Still other goals – such as leadership in product
research, innovation and quality – are difficult to measure. Probably the most widely
recognised goal is a specified return on assets which will be provided by accounting
information.

The next step in planning are identifying feasible alternative courses of action for
achieving desired goals and estimating their qualitative and quantitative effects on their
specified goals. All planning involves the future. As a result, data related to the
alternative courses of action must be estimated and projected in an environment of
uncertainty.

21
Therefore, from the above explanation, accounting information shows its impact on decision
making through providing accounting reports with information that can be used to plan so as to
attain target growth rate in sales revenue as well as estimates and projections of future
expectations.

 The execution phase

It begins with the actual moment of decision – management’s commitment to a specific
plan of action. Because of the complexity of modern industry, some elaborate plans
may lead to operating crises that carry significant penalties for the firm in terms of extra
costs, lost opportunities and in extreme cases - bankruptcy.

(Markus L 1983:205) goes on to add that once a decision is made, the plan is
implemented, which usually involves the acquisition and commitment of materials,
labor, and long-lived assets such as machinery and buildings. Management is kept
informed through periodic accounting reports on the acquisition and use of these
facilities during the execution phase.

Once again, accounting information has impact during the execution of a decision. This
is by means of periodic accounting reports that must be kept so that management is kept
informed on the use of the facilities and long lived assets of the organisation.

 The evaluation phase

Steps are taken to control the outcome of a specific plan of action. Virtually every
important aspect of business – costs, product quality, inventory levels, and sales
revenue – must be reasonably controlled if a firm is to operate successfully. The
important aspects are provided for by accounting information thereby playing a role in
the evaluation phase. Measuring performance is an essential element of control.
Accounting information and reports have an impact when it comes to informing

22
 management about performance in various areas during the evaluation phase of decision
making. (Klen L 1992)

2.5 Summary
As indicated in the introduction, the objectives of this chapter were to review the
literature. Types of accounting information and their usefulness were discussed and
analysed, examining the quality and value of accounting information. Users of
accounting information were also identified. It also highlighted the role played by
accounting information and its impact on decision making by making use of the
decision making process. Chapter III which follows is designed to discuss aspects of
research methodology.

23
 CHAPTER III

3 RESEARCH METHODOLOGY

3.1 Introduction
In this chapter, the researcher focused on the methods that were used in carrying out the
research. The researcher collected valid and reliable data about the project at YWCA
Council of Zimbabwe. This chapter describes the research design, research instruments,
reliability and validity of the research instruments, population, data collection techniques,
data analysis and presentation and ethical considerations.

3.1 Research Design

Research design refers to a formal written set of specifications and procedures for
conducting and controlling the research project. This was a case study because the
researcher was focusing on one organisation that is YWCA Council of Zimbabwe. The
types of research included descriptive research and exploratory research. Descriptive
research was used because the researcher described accounting information at YWCA.
Exploratory research was used to gain insight and clear understanding of the accounting
information and the types of decisions that are applicable to it through examining the
organisation’s documents and talking to company executives. The researcher was also
following a mixed research design. It included both qualitative and quantitative research as
it was focusing on facts and figures.

24
3.2 Sources of data

3.2.1 Primary Data

This is data that is captured for the first time and specifically for the purpose of
investigation at hand. The researcher used questionnaires in collecting primary data and the
interview schedule. The researcher used this type of data because it is said to be accurate,
sufficient, current, relevant and reliable.
Some of the advantages were:-
(i) The data obtained was relevant to the problem at hand
(ii) The researcher generally offered greater control over data accuracy.
(iii) The data was considered more meaningful and reliable.

Some of the disadvantages were:-

(i) The data was time consuming to collect. However the researcher used spare time and
follow ups at the organisation
(ii) The data was generally more expensive to collect because money was needed to print
questionnaires. The researcher had to use her own finances to print and photocopy the
copies needed.

3.2.2 Secondary data

This is data extracted from other sources as a result of the research or work done by other
researchers. Originally, it was not for the study at hand but was only tailored to meet or
related to the problem being faced or solved. The researcher made use of the organisation’s
financial records from previous years and other documents that have been prepared before
that were relevant to the organisation.

Advantages
(i) The data was already in existence therefore readily available, access time was
relatively short.

25
 (ii) The data was generally less expensive to acquire

Disadvantages
(i) Most of the data did not meet specifically the needs of the current problem and was
difficult to be fitted into it. The researcher requested for data that suited the research
problem.

3.3 Research instruments

Research instruments are data collection forms on which data is recorded as it is collected.
As a tool to collect data, a research instrument must be a reliable and should validly
measure what the researcher seeks to measure. It must be designed in such a way that
ensures the correct research issues are addressed and that accurate and appropriate data for
statistical analysis is gathered. The main research instrument to be used in the study is the
interview schedule supplemented by the questionnaire. The reason being that Accounting
information at YWCA is considered to be very confidential. Therefore, in order to get the
desired information for the completion of the project, the researcher will conduct
interviews. The questionnaires are only there to compare information from the interview as
they do not include personal information, respondents will be willing to answer freely
without fear of being exposed.

3.3.1 Interview schedule

Data will be collected by means of face to face communication between the interviewer
(researcher) and the respondents or study participants. The respondents were contacted,
asked questions and the responses recorded, and therefore, the interviewer’s tasks was
to meet the respondents, ask questions and record their responses on the interview
schedule.

Advantages

26
  The researcher was aiming for a higher response rate that is generally achieved
because respondents tend to be more cooperative in personal interviews
 Questioning allowed probing for reasons and greater data accuracy was generally
ensured because the interviewer helped the respondent to understand the questions.
 Data collection was immediate, that is, there was immediate feedback.

Disadvantages
 Although data collection was immediate, the process was time consuming. The
other respondents had to be interviewed via telephone.
 It was also difficult to find convenient time for interviewing because other
respondents were busy. However, the researcher kept on doing follow ups and also
telephone interview.
 Due to the issue of time, two of the respondents did not have time to consider
replies or look up for information although the information used was useful.

3.3.2 Questionnaire
It is a set of questions which will help to meet the objective of the research through
directing the questioning process and promoting clear and proper recording.

Advantages
 Respondents completed the questionnaires at their own convenient spare time.
 Respondents had time to consider their responses. They had time to consider
their opinions and check on accuracy and current information or records.
 Anonymity of respondent was assured, generally, resulting in more honest
responses hence avoiding interviewer bias.

Disadvantages
 Response rate was very low. Researcher had to do follow ups, sending emails
and calling just to remind the respondents to fill up the questionnaires.

27
  There was a possibility of some of the respondents failing to obtain clarity on
some other questions. That is the researcher designed a questionnaire that was
brief and only needed simple answers.

3.4 Reliability and validity of research instruments.

According to Bell (2007:87) “validity is concerned with ensuring that question measures or
describes what it intends to find.” Jerry, et al (2009) says that “reliability is the replicability
of the research under similar conditions elsewhere”.

On reliability and validity of the questionnaire, the researcher produced a pilot test before
issuing the final questionnaire to respondents so as to ensure that the respondents would be
able to answer the questions to eliminate bias. For the questionnaire, the researcher
prepared the interview schedule and communicated with one of the respondents who also
helped her to rephrase some of the questions.

3.5 Population
Population refers to a well-defined collection of individuals or objects known to have
similar characteristics. For this study, the population was small and as such it was covering
the National Office Staff at YWCA, two in the finance department that is The National
Finance Officer and the Finance Clerk. It also included the National Youth Programs Co-
ordinator and her assistant, the National General Secretary and her deputy, the Treasurer,
Westwood Hostel Administrator, the three members of staff who make up the worker’s
committee and also the Office Aide.

3.6 Sampling and sampling techniques

Since the population was too small to conduct a sample, the researcher interviewed only the
members of staff that handles accounting information as well the staff or management that
is responsible for decision making. The sampling technique used in identifying the
respondents is Judgmental sampling technique.

28
 Under this technique, the sample consists of sampling units deliberately selected from the
population on the basis of the experience, judgment and expertise used by the researcher.
Researcher used her judgment to select what whom she thought to be the best satisfactorily.
For the interviews, the researcher selected the members of staff in the finance department
because they are responsible for all the accounting information used by the organisation.
The researcher also selected three other staff members that are involved in the
organisation’s decision making process because they are familiar with the process.

The members of the organisation interviewed were:

 The National finance officer (NFO)
 National general secretary (NGS)
 Treasurer (Executive member)
 Westwood Hostel Administrator
 One member of the workers committee

However, 12 questionnaires were distributed with the aim of reaching and covering all 6
departments of the organisation for the above mentioned population (3.4). The technique
used in distributing these questionnaires was Purposive sampling technique. When using this
technique, selection of the cases is governed by some criterion acting as a secondary control.
A group is selected by the researcher to constitute a sample because it is considered to
mirror characteristics in question. There is purposively selecting and leaving some elements
of the population. The errors in this type of technique are unpredictable and not measurable,
however purposive sampling is a useful tool in the exploratory phase of research, phase in
which ideas and insights are more important than scientific objectivity.

3.7 Data collection techniques

The main media for collecting data that the researcher used was the interview.
Questionnaires were used to obtain clarity on areas needed.

29
3.8 Data analysis and interpretation
Since this is a mixed research, data would be presented in all acceptable formats. Responses
from research instruments was recorded and interpreted in a way that is easier to
understand. All interviews were recorded on an interview schedule. Most of the data from
the research instruments was presented in forms of tables, frequencies and figures such as
bar and pie charts (Chapter IV)

This helped the researcher in coming up with views on the subject under discussion.
Percentages helped the researcher to make sure that the data is compact and easy to
understand and comment upon. The data was to be presented according to logical themes
through the use of Microsoft Excel package to come up with graphs, tables and diagram.
For the purpose of analysing and comparing data, percentages were used as guidelines for
interpreting data during discussion of the meaning of information gathered.

3.9 Ethical considerations

The study was composed of willing participants. The researcher did not force participants to
be part of the study. To encourage participation, the researcher explained the importance of
the study to the organisation. The researcher observed the rights that are enjoyed by
respondents such as right to consent by informing participants about the study. The right to
privacy was observed by not disclosing information given to the researcher that is
considered as private. For the questionnaires, the researcher observed the right to
anonymity because a questionnaire does not require personal information from participants.
The right to confidentiality was observed by not disclosing the participant’s information.

3.10 Conclusion
This chapter looked at various approaches to research design, research methods and
justification for the choice of descriptive research design. The population under study was
also discussed. Research instruments were also discussed. Data collection techniques were

30
 discussed and how the data was to be interpreted and analysed in chapter 4. The next
chapter shall deal with data presentation, analysis and interpretation.

CHAPTER IV

4 DATA PRESENTATION AND ANALYSIS

4.1 Introduction
This chapter centers on the presentation of data and analysis of information obtained from the
research findings. The information obtained and gathered from questionnaires and interviews,
that is the research findings will be presented, analysed and interpreted. The analysis of data
includes both quantitative and qualitative data and is presented by making use of simple tables
and graphical presentations. Explanations and interpretations are made so as to enhance
understanding of data presented on the tables and graphs.

Response Rate

4.1 Analysis of responses from questionnaires

All the questionnaires that were distributed and were returned. There was a 100% response rate.

Table 4.0 shows the response rate from the questionnaires

Description Number of respondents Percentage distribution
Questionnaires issued 12 100%
Questionnaires returned 12 100%

31
Section A: Demography

Purpose of section

The purpose of this section was to gather demographic information with the aim of establishing
the nature of the respondents and to see if it can somehow influence their behavior regarding
decision making. This was in relationship to gender, working experience at the organisation,
company position and also their professional and academic qualifications.

According to gender, 83% of the respondents were female, 17% were male. This is because
YWCA is a women run organisation. Women are the ones that occupy all the top management
position and the males present, are there for maintenance and driving. The information is
represented by table 4.0 and fig 4.0 below:

Table 4.0 shows responses according to gender

Gender Respondents % Responses
Male 2 17%
Female 10 83%
Total 12 100%

Fig 4.0 shows the response rate according to gender

Respondents by gender

17%

83%

Male Female

32
Section B INFORMATION SOUGHT

4.2 Types of accounting information

Question: Are you aware of the types of accounting information.

The objective was to analyse the types of accounting information and their usefulness to the
organisation. The question was to see how many of the respondents were aware of accounting
information and the results are tabulated below:

Table 4.1 shows if the

The table (table 4.1) and graph (fig 4.1) below are illustrating the results obtained from the
questionnaire when the respondents were asked on whether they were aware of accounting
information.

Response Respondents % Responses

Yes 7 58%
No 3 25%
Maybe 2 17%
Total 12 100%

Fig 4.1

33
 RESPONDENTS AWARE OF ACCOUNTING INFORMATION
70%
60%
50%
RESPONSE RATE

40%
30%
20%
10%
0%
Yes No Maybe

% Responses

From the table above, the results show that 58% are aware of accounting information, 25%
were not aware and 17% answered maybe indicating that they were not really sure.

Question: Which financial statements do you prepare at YWCA?

From the given list of financial statements, respondents indicated that YWCA prepare an
Income and Expenditure account, the statement of financial position as well as a Priority List
indicated by an 84% response rate under “Others”, although a Priority List is not considered as
type of financial statement. 0% said Statement of changes in equity and also 0% said None.

The table (table 4.1.2) and graph (fig 4.1.2) summarises the accounting statements that are used
at YWCA according to the respondents.

Table 4.1.2
Accounting Statement Respondents % Responses
Statement of Comprehensive Income 12 100%
Statement of Financial Position 12 100%
Statement of changes in equity 0 0
None 0 0
Others 10 84%

Fig 4.1.2

34
 ACCOUNTING STATEMENTS USED AT YWCA
120%

100%

80%
RESPONSE RATE

60%

40%

20%

0%
Statement of Statement of Statement of None others
Comprehensive Financial Position changes in equity
Income

4.2.1 Usefulness of the above mentioned types of accounting information

Question: Are you aware of the usefulness of the types mentioned above?
The respondents were asked if they were aware of the usefulness of the above
mentioned types of accounting information that they prepare. 58% said Yes, 25% said
No and 17% said Maybe. This indicated that majority of the respondents were aware of
the usefulness of the financial statements prepared at YWCA.

The table and fig below summarise data collected.

Table 4.2.1
Response Respondents % Responses
Yes 7 58%
No 3 25%
Maybe 2 17%
Total 12 100%

Fig 4.2.1

35
 USEFULNESS OF THE TYPES OF ACCOUNTING INFORMATION USED BY YWCA
70%

60% 58%

50%
RESPONSE RATE

40%

30%
25%

20% 17%

10%

0%
Yes No Maybe

% Responses

4.3 Quality and value of Accounting Information

Question: Do those types contain quality and value needed to be contained when they are
being examined?

The objective was to find out if the accounting information types mentioned do contain the
quality and value needed and mentioned in the review of related literature. The table below
(table 4.2) and graph (fig 4.2) below indicates the response rate.

Table 4.3
Responses Respondents % Responses
Yes 0 0%
No 3 25%
Maybe 9 75%
Total 12 100%

The above results indicate that YWCA accounting information does not contain the quality and
value needed. 0% said Yes, 25% of the respondents said No and 75% said Maybe. The results
can also be presented in form of a graph below:

36
Fig 4.3

QUALITY AND VALUE OF ACCOUNTING INFORMATION

80%
70%
60%
RESPONSE RATE

50%
40%
30%
20%
10%
0%
Yes No Maybe

% Responses

4.4 Users of Accounting Information

Question: Do you know the users of accounting information?

The objective was to see if the respondents were aware of the users of accounting information.
According to the presentations above, the 50% of the respondents said Yes, 50% said No and
0% said Maybe. This indicated that half of the respondents were aware of the users and the
other half were not aware.

The table below (table 4.3) and graph (fig 4.3) shows the response rate:

Table 4.4
Response Respondents % Responses
Yes 6 50%
No 6 50%
Maybe 0 0%
Total 12 100%

Fig 4.4

37
 USERS OF ACCOUNTING INFORMATION AMONGST THE RESPONDENTS
60%

50%

40%
RESPONSE RATE

30%

20%

10%

0%
Yes No Maybe

% Responses

Question: Are they being accorded their right to accounting information?

However, these users are also to be accorded their right to this information instead of restricting
it to them. The responses indicate that the users of accounting information are not accorded
their right to accounting information. This was shown by the 42% response rate, 25% said No,
and 33% said Maybe.

The responses are tabulated as follows and the results are also on graph (fig 4.3.1):

Table 4.4.1
Response Respondents % Responses
Yes 5 42%
No 3 25%
Maybe 4 33%
Total 12 100%

Fig 4.4.1

38
 RESPONSES ON WHETHER USERS HAVE THE RIGHT TO ACCESS
INFORMATION
45%
40%
35%
30%
RESPONSE RATE

25%
20%
15%
10%
5%
0%
Yes No Maybe

% Responses

4.5 Role of accounting information and decision making

Question: Are you a participant in the decision making process?

The objective was to identify the participants in the decision making process from the
respondents. From the results collected, 50% said Yes, and 50% said No. Out of the 12
respondents, 6 of them are participants in the decision making process, and 6 were not.

The table (table 4.4) and graph (fig 4.4) below indicate the results:

Table 4.5
Response Respondents % Responses
Yes 6 50%
No 6 50%
Maybe 0 0%
Total 12 100%

Fig 4.5

39
 P A R TI C I P A N TS I N TH E D EC I S I O N M A KI N G P R O C ES S
% Responses
60%

50%

40%
RESPONSE RATE

30%

20%

10%

0%
Yes No Maybe

Question: Are you satisfied with the process?

The respondents were not really satisfied with the process because 42% said Yes, and 25% said
No. 33% of the respondents said Maybe. It shows that some of the respondents are not satisfied
with how decisions were made. The information is also presented in the table (table 4.4.1) and
graph (fig 4.4.1) below:

Table 4.5.1
Response Respondents % Responses
Yes 5 42%
No 3 25%
Maybe 4 33%
Total 12 100%

Fig 4.5.1

40
 PARTICIPANTS RESPONSE ON SATISFACTION OF THE DECISION MAKING
PROCESS
45%

40%

35%

30%
RESPONSE RATE

25%

20%

15%

10%

5%

0%
Yes No Maybe

% Responses

Question: Does the process contribute to sound decisions being made?

The results indicate that sound decisions were not being made. This was shown by the 33% of
the respondents that said Yes. 50% said No and 17% said Maybe. The table and graph below
indicates the response rate.

Table 4.5.2
Response Respondents % Responses
Yes 4 33%
No 6 50%
Maybe 2 17%
Total 12 100%

Fig 4.5.2

41
 THE PROCESS CONTRIBUTES TO SOUND DECISIONS MADE
60%

50%

40%
RESPONSE RATE

30%

20%

10%

0%
Yes No Maybe

% Responses

4.6 Analysis of responses from the interview

Response rate.
Out of the 5 respondents that were to be interviewed, only 2 were available for the face to
face interview and 1 had to be interviewed using the telephone. The other two respondents
were not available.

4.6.1 What do you understand by the term “Accounting Information”?

The respondents were asked what they understood by the term accounting information.
They all had an idea of what the definition implied, as they all mentioned the important

42
 characteristics such as information that is used by accountants and information that is
normally used by the finance department as well as who prepares it.

4.6.2 What are the types of Accounting Information?

The respondents proceeded to answer the question on the types of accounting

information. They all mentioned the Balance Sheet and the Income and
expenditure. However, they all mentioned a ‘Priority List”. They seemed to think
of it as a type of accounting statements. The “Priority List is one of the major
instrument that is used by the organisation for most of their decisions. However,
the other types of Accounting Information were not mentioned by the interviewees
as they are not used often by the organisation.

4.6.3 How useful are those types of accounting information you use to the
organisation as a whole?

On usefulness of the types of accounting information, the National Finance Officer,

indicated that she prepares the Income and Expenditure only, for the purpose of the
Executive meetings that are held every month by the Executive committee with the aim
of seeking how much money the organisation has on hand at that particular time. The
National General Secretary mentioned the usefulness of the Income and Expenditure
Account and Balance Sheet as a measure used by the organisation to seek for funding,
as most donors request the organisations financial account to assess them before they
give them funding. The other member of the workers committee was not sure of how
useful the accounting statements were to the organisation.

4.6.4 Quality and Value of Accounting Information

Accounting information is said to have quality and value for it to be considered for
decision making. From the types of accounting information that the organisation
keeps, how are you bringing out its quality when making decisions. In other words
what is the quality and value of accounting information available at YWCA for
decision making?

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 Two of the respondents indicated that Income and expenditure account and the balance
sheet prepared by the organisation do have value and quality needed and that is
exercised mostly when there is a forthcoming meeting. The income and expenditure is
prepared with the aim to make a faithful presentation that is, it will be free from
material bias and error and also that it is complete and can be interpreted well.
However, the organisation does not use these instruments for decision making. They use
only the Priority List that is drafted by the National Finance Officer for decisions.

4.6.5 Are you aware of the users of accounting information and to what extent are
the users being accorded their full right to this information?
The National Finance Officer and the National General Secretary were aware of the
internal users of accounting information. They identified the users and also confirmed
that they were given their full access to the information. However, they both indicated
that all the information in the accounts and finance department was only restricted to
that office. It can only be released to third parties who had authorisation from the
National General Secretary therefore, apart from that, no one else was supposed to
obtain that information. The other respondent indicated that he was aware of the users
and that information in that department has always been considered as very
confidential.

4.6.6 What are some of the major aspects taken into consideration during decision
making?
All the respondents kept mentioning a priority list each time the word decision making
came up. This is a list drafted by the National Finance Officer. From her own judgment,
she makes a list of top expenses that have to be paid up urgently. When she has finished
compiling the list, she presents it to the Deputy National General Secretary, who helps
her do the final compilation before presenting it to the National General Secretary. The
NGS then calls other members of the Decision making process to discuss on issues
listed on the priority list. The list is discussed and exhausted on all angles. When they
have reached a verdict, the list is signed and copies are given to each member in the
meeting. Fig 4.5.3 shows an extract of the Priority List:

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Fig 4.5.3
  Friday, July 31, 2015      
   
  YWCA COUNCIL OF ZIMBABWE  
   
  PRIORITY LIST FOR CASH RECEIVED DURING THE PERIOD 10 - 28 JULY 2015
   
  Organisation Date Received Amount Paid  
  Cash Received   $  
  Individual Bookings 10 Jul - 15 Jul 450.00  
  CSU 12-Jul 4,180.00  
  CWGH 17-Jul 2,700.00  
  ZIFA Referees 25-Jul 1,050.00  
  Restless Development 25-Jul 2,500.00  
  Total Cash Received   10,880.00  
  Payments to be made      
  Salaries - 50%   7,000.00  
  Contract Workers salaries   1,500.00  
  ZTA Payment for June 2014   375.00  

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  Transport allowances   100.00  
  Fuel Allowance for NGS   80.00  
  Fuel Allowance for DNGS   80.00  
  Food groceries for confirmed bookings   1,175.00  
  Motor Vehicle Repairs   200.00  
  Stationery   70.00  
  Petty cash   300.00  
  Total Payments   10,880.00  
   
  Compiled by……………….Signature……………………….Date……………………….
   
  Authorised by……………..Signature……………………….Date…………………………
   
  Approved by……………….Signature……………………….Date……………………….
   
Worker's Committee Representative……………Signature……………Date……………

4.7 Summary
This chapter was discussing the results from the data gathered in Chapter III. Data
collected from the questionnaires and from the interview schedule was analysed. Data was
also presented in form of tables and graphs. The next chapter to follow will be looking at
Conclusion, Findings and Recommendations.

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 CHAPTER V

5 SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction
This chapter presents a summary of findings, conclusion of the study and recommendations.
The aim of the study was to analyse the adoption of accounting information as the major tool
for decision making.

4.8 Summary of the research study

The research started on chapter 1, this chapter was focused on the background of study,
statement of the problem, research objectives and research questions. It also includes the
limitations and the delimitation of study and also definition of terms.

47
Chapter two looked at the literature review of the research study that is an examination of the
research study. The review of literature was centered on the objectives of the research study, to
critically analyse the literature in line with the objectives of study.

Chapter three looked at research methodology of the study. It focused on how the researcher
conducted her research, the research design adopted by the researcher, the target population of
the study and the research instruments that were used to collect data in the field. The process
was undertaken in order to solve the practical problem at hand and add knowledge.

Chapter four was essentially centered on data analysis and data presentation. The data analysed
in chapter four was the information that was collected in chapter three. The data collected
through questionnaires and interviews was analysed by using a spread sheet and it was then
presented on simple tables and also making use of graphs for graphical presentations. Both
primary and secondary data were analysed.

4.9 Summary of findings

This was a case study carried out at Young Women Christian Association National Office in
Harare. Two research instruments were used to obtain the information for the research study.
The following are the research findings:

4.9.1 To analyse the types of Accounting information and its usefulness to YWCA.
The members of the organisation were aware of the types of accounting information. The
organisation maintains an Income and Expenditure Account but these accounts are mainly used
for audit and to present them to the donor when seeking for funding. Other than that, when
making decisions, the organisation makes use of a Priority List, the Income and Expenditure is
only there to identify amount of cash at hand. However, the usefulness of the information is
also known but not exercised fully the way it should be.

48
 4.9.2 To examine the quality and value of accounting information
As stated in Chapter II, accounting information needs to possess certain characteristics, quality
and value for it to be fully considered for other purposes such as decision making. The findings
indicate that YWCA’s type of Accounting information do not contain the quality and value
needed.

4.9.3 To identify the users of accounting information

Users of accounting information identified at YWCA was the National Finance Officer, The
finance Clerk and the National General Secretary. Other users have to be authorised by the
NGS first because the information is considered “confidential”. The researcher also found out
that those are also the rightful users of information internally. These users are also accorded
their right to that information.

4.9.4 To find out the role of accounting information and its impact on decision
making.
At YWCA, the role of accounting information is known by the users but not exercised. It is
supposed to play a crucial role and have an impact on decision making. The researcher also
found out that the users of accounting information are also the participants in the decision
making process. They were not really satisfied with the process because some key issues are
not addressed in the meetings. Issues like growth, expansion and profitability and recruitment.
In the end, sound decisions are not made because the priority List does not contain all the items
that needs to be addressed during the meetings. It leaves out other aspects that are important.

4.10 Conclusion
The study revealed that accounting information performs a crucial role on management
decisions, which has been shown to be major force in decision making. The company used as
case study made the researcher to understand that, for any company to be successful it should
endeavor to make use of accounting information because accounting itself is a language of
business, and before venturing into any business, one must understand the language of such
business, so as to know the right method to achieve the stated goals and objectives.

49
 4.10.1 Types of Accounting Information
The researcher concluded that YWCA is aware of accounting information. The types of
accounting information used by the organisation can be used for decision making but the
decisions made do not cover all issues that must be discussed in a meeting. The only areas
covered by their tool for decision making (the priority list) is the financing part of the
organisation, for example distribution of income on a few mentioned expenses.

4.10.2 Quality and value of accounting information

The researcher came to the conclusion that YWCA only prepares the Income and expenditure
without quality and value needed. This means that the National Finance Officer prepares the
accounts assisted by the finance clerk when the accounts are requested usually with the aim of
indicating income and expenditure. No other person can double check to see if the accounts
indicate a true and fair representation.

4.10.3 Users of Accounting Information

The internal users of the organisation are fully accorded their right to the information. The
information however is kept confidential to non-accounting users. The researcher also
concluded that the users are also part of the decision making team since they are the ones who
prepare the document used.

4.10.4 The role of accounting information and its impact on decision making
The researcher concluded that accounting information plays a crucial role in management
decision making. YWCA uses their Priority List to make decisions that affect the organisation
on a daily basis. That List provided in the decision making process plays a role in the decision
making therefore, accounting information has an impact on decision making. Most decisions
are related to accounting and financing of the business therefore accounting information cannot
be ignored.

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 4.11 Recommendations
In light of the above conclusions, it is recommended to:
 Prepare all the types of accounting information that are applicable to YWCA’s type of
business and have management analyse them during decision making for at least every
3 months to assess company performance. Accounts such as Income and Expenditure
Account, Balance Sheet and Cash flow Statement. These accounts will help the
organisation to identify its strengths, weaknesses, opportunities and threats.
 Prepare these accounts taking into consideration relevance, faithful representation,
completeness, neutrality, freedom from material error, comparability, verifiable,
timeliness and understandability. Therefore, input controls must be put in place to
ensure data quality and value. This will also assist the organisation to reduce the risk of
misstatement by eradicating errors.
 Employees should be allowed to examine these accounts because performance of the
organisation is important and need to know company position as well instead of
restricting information to only a few users and keep it confidential
 The organisation should consider other roles of financial data such as budgeting,
inventory control and growth instead of focusing on the financing part of the business
only.
 Take into consideration all issues affecting the organisation when making decisions
since a Priority List does not take into consideration all aspects of the organisation. If
they are to continue using the Priority List, they should at least modify it so that at least
it get to cover some of the parts that it was not covering before.

4.12 Conclusion
This chapter was focusing on the findings and conclusions from the data analysed in chapter
IV. Recommendations were also formulated for the organisation.

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