EVALUATION OF THE APPLICATION OF MANAGEMENT ACCOUNTING TECHNIQUES IN A MANUFACTURING FIRMS..
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
According to Eneje (2005) Accounting is the measurement (http://en.wikipedia.org/wiki/Measurement), processing and communication of financial information about economic entities (http://en.wikipedia.org/wiki/Economic_entity). It was developed by the Italian (http://en.wikipedia.org/wiki/Italians) mathematician Luca Pacioli (http://en.wikipedia.org/wiki/Luca_Pacioli), in the end of the 15th century. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users includinginvestors (http://en.wikipedia.org/wiki/Investor), creditors (http://en.wikipedia.org/wiki/Creditor), management (http://en.wikipedia.org/wiki/Management) and regulators (http://en.wikipedia.org/wiki/Regulatory_agency). Practitioners of accounting are known as accountants (http://en.wikipedia.org/wiki/Accountant). The terms accounting and financial reporting are oen used as synonyms. Adeniji (2008) opined that Accounting can be divided into several fields including financial accounting (http://en.wikipedia.org/wiki/Financial_accounting), management accounting (http://en.wikipedia.org/wiki/Management_accounting), auditing (http://en.wikipedia.org/wiki/Auditing), andtax accounting (http://en.wikipedia.org/wiki/Tax_accounting). Financial accounting focuses on the reporting of an organization's financial information, including the preparation offinancial statements (http://en.wikipedia.org/wiki/Financial_statement), to external users of the information, such asinvestors (http://en.wikipedia.org/wiki/Investor), regulators (http://en.wikipedia.org/wiki/Regulatory_agency) and suppliers (http://en.wikipedia.org/wiki/Supply_chain); and management accounting focuses on the measurement, analysis and reporting of information for internal use by management. The recording of financial transactions contains the summaries of the financials that is presented in financial reports, is known as bookkeeping (http://en.wikipedia.org/wiki/Bookkeeping), of which double-entry bookkeeping (http://en.wikipedia.org/wiki/Doubleentry_bookkeeping)is the most common system. According to Batty (2009) Accounting is facilitated by accounting organizations (http://en.wikipedia.org/wiki/Category:Accounting_organizations) such as standard-setters, accounting firms (http://en.wikipedia.org/wiki/Accounting_networks_and_associations) andprofessional bodies (http://en.wikipedia.org/wiki/Professional_accounting_body). Financial statements (http://en.wikipedia.org/wiki/Financial_statement) are usually audited byaccounting firms (http://en.wikipedia.org/wiki/Accounting_networks_and_associations), and are prepared in accordance with generally accepted accounting principles (http://en.wikipedia.org/wiki/Generally_accepted_accounting_principles) (GAAP). GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board (http://en.wikipedia.org/wiki/Financial_Accounting_Standards_Board) (FASB) in the United States] (http://en.wikipedia.org/wiki/Accounting#cite_note-NP_2013-1) and the Financial Reporting Council in the United Kingdom (http://en.wikipedia.org/wiki/United_Kingdom). As of 2012, "all major economies" have plans to converge (http://en.wikipedia.org/wiki/Convergence_%28accounting%29) towards or adopt the International Financial Reporting Standards (http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards)
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