THE ROLE OF ACCOUNTING SYSTEM IN MEASURING ORGANZIATIONAL PERFORMANCE OF TRANSPORT COMPANY (A CASE STUDY OF ABC TRANSPORT)

 INTRODUCTION

ABC Transport Company was known to start as Associated business Company Limited. It is a private owned limited company, set up in 1993 with a view of running a modern transport system in Nigeria.

The company has a paid up capital of one million naira as at 1993 which is presently being increased to twenty million. It commenced operation on road passenger transportation with only five mini-buses shuttling from Owerri to Lagos route. After some years, it increased its fleet by acquiring 55 seated marcopolo buses which made the Company expanded its operation, extending its services to other major cities in Nigeria, including Abuja, Port Harcourt, Aba, Umuahia, Enugu, Warri, Onstsha, Benin, Ghana. ABC as a transport company therefore needs effective accounting system so as to have an efficient performance in the company. Accounting system in this regard is an information system designed to capture and measure the economic essence of events that affect an entity and to report their economic effect on that entity to decision makers. It is a service activity carried out to provide information for decisions within and about business firms. Thus, it is a systematic process of providing information about the wealth and the effects of economic events. Business organizations, government agencies and institution needs information for their survival management base on and that is why it is said “management decision is good as the information available managers cannot carryout their duties effectively in the course of their business pursuit without a good information system. For any business establishment to be successfully in its operations it must depend largely on how the management make use of the available information for decision making purposes, the effect of this cannot be overemphasized.

Accounting system feeds management with information for routine decision making. It also provides management with the needed information for use in conducting the affair of the business organization and reporting the result to the owners. The accounting information obtained can serve both internal and external purposes. It is for internal use when the information gathered is used in making decision that will help in day to day running of the business. Such decisions could be as it affects salaries, wages or output of the organizations e.g the creditors, investors etc. it is because of how important accounting system is to an and how it affect the management decision that the researcher have decided to embark on this very important topic.

 NEED FOR THE STUDY

The need for this study is to make readers especially the transport business organizations to appreciate the importance of a good accounting system. This is done in anticipation that readers shall have a full knowledge of accounting system and the role it plays. It is equally hoped that this work shall offer recommendation on how business organization like transport companies can improve their accounting system. And also relevant to investors who wish to establish transport companies.

 OBJECTIVES OF THE STUDY

In the content of the research work the researcher wishes to achieve the following objectives:

·        To ascertain how accounting system of transport companies are designed.

·        To appraise the extent to which accounting system can supply management with the needed information for decision making

·        To ascertain how relevant good accounting is on the management of transport companies.

 ASSUMPATION OF THE STUDY

i.            At the end of the research work, it was assumed that ABC transport company limited keeps good accounting records.

ii.           That there is efficient accounting system installed in ABC transport company

iii.         That there are skilled accounting personnel in particular and other middle and top managers in generally.

iv.         That the extent the accounting system installed is efficient with regard to the information required for financial decision making.

v.          That good accounting system helps in the effective management of a transport company and also helps to achieve organizational goals.

DEFINITION OF TERMS

i.            Accounting: This means to keep a statistical record of money in ones care.

ii.         Accounting system: This is a means by which a business develop information, usually presented in form of financial statement and report for management and other parts for the purpose of achieve an objective.

iii.       Good accounting system: An accounting is to be good if.

a.   The transaction are properly recorded

b.  The reports are prepared in a clear and timely manner accounting to need and knowledge of users.

c.   It aids management in planning and control which help to meet the desired goals.

iv.        Information: This is those facts which has been board or discovered to provide insight in order to achieve specific purpose and enhance understanding.

v.          System: This is a mans by which group or part of an organization work cooperatively towards attainment of a goal.

vi.        Transportation: This is a means of conveying people and goods from one place to another.

      CONCLUSION

In the course of the study, it was observed that inaccurate does not really affect the decision made by management.

Base on the findings, the following conclusions were drawn. Management of ABC transport was unable to make accurate decision because of inaccurate information supplied to the accountant any firm that does not keep accurate information will not achieve its organizational goals.

An important issue for this inaccurate information ABC transport company limited is the employment of incompetent staff.

Therefore, one can conclude that the skilled personnel and the employment of competent staff in ABC transport company limited provide the basic for the inaccurate information supplied and thus affect management decision.