MZUMBE UNIVERSITY

(MU)
SCHOOL OF BUSINESS
RESEARCH PROPORSAL ON:
EFFECTIVENESS OF ACCOUNTING INFORMATION
IN DECISION MAKING.
CASE STUDY:
TANZANIA PORTS AUTHORITY (TPA) DAR ES SALAAM PORT (DP)
BY
MSHIHIRI ATHUMANI
BAF III
A RESEARCH REPORT WHICH WILL BE SUBMITTED TO THE SCHOOL
OF BUSINESS AS A PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
AN AWARD OF BACHELOR OF ACCOUNTING AND FINANCE OF
MZUMBE UNIVERSITY
1
CERTIFICATION
We, the undersigned, certify that we have read and hereby recommend for acceptance by
Mzumbe University, a research report entitled, Effectiveness of accounting information
in decision making, a case study is Dar es Salaam ort , in fulfillment of the re!uirement
for the "achelor of #ccounting and $inance of Mzumbe University%
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i
DECLARATION
(, MS1(1(-( #/1UM#+(, declare that the research which is on the progress is my
own work and to the best of my knowledge% (t had not been submitted for the award of
any degree in any University%
$ield Supervisor3
D-% E-+ES/ MW#S#2W("#
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E)ternal E)aminer3
+ame******************
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Student3
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ii
COPYRIGHT
#ll -ights reserved, +o part of this report may be reproduced or transmitted in any form
by any means, electronic, mechanical, photocopying, recording or otherwise without the
prior permission of the author%
4Mshihiri #thumani 5678,5679
iii
DEDICATION
/his research work is sincerely dedicated to my parents #thumani #% Mwanemo and
$atuma (% 2adar who devoted their ceaseless support and courage morally, spiritually% (
pray that #lmighty :od protect and give them success and long life%
iv
ACKNOWLEDGEMENT
My heartfelt thanks should first of all go to :od the #lmighty for all the blessing s 1e
has always been e)tending to me% 1ad it not been for 1is willingness, ( wouldn;t get
where ( am%
$urthermore, ( would like to e)press my sincere thanks to Mr% Ephrahim M% Malewo,
rincipal 1uman -esource /raining Manager <1-/M=, Mrs%Simba, orts 1uman
-esources Manager <1-M= and Dar es salaam ort <D= at large for accepting my
re!uest to 'oin their office for field attachment programme%
When ( 'oined the office , ( met some other staff members to whom their support in my
field had a special recognition% ( would like to take this opportunity to e)press my
heartfelt appreciation to them> (t wont; be possible to mention all of them, but to
mention a few particularly to those whom ( was closely working with% /hese include
Madam Marry Mbita <Mama ?u)=, Mr% $redy, Mr%@ahaya and Mama Swai%
2ikewise, ( will like to thank my field work research supervisor Dr%Ernest Mwasalwiba
for the custodian role which he will play to me in ensuring that this work is fruitful and
to be done to the e)pected standards% 1is intellective comments and suggestions on what
should be done will help me to accomplish my field work in the re!uired standards%
( also e)press my thanks to my parents Mr% and Mrs%#thumani #%Mwanemo, my
dearest brother Said #%Mwanemo and my beloved special one Mr%1arun -ashid for their
sake encouragement and prayers, May :od bless them all%
$inally to all my sisters #shura #%Mwanemo and Auhura #%Mwanemo together with
my lovely young sister Swaiba #thumani as well as my classmates in general ,for their
kindness and support in my studies though many people assists me ,( wholly heartedly
declare that ( am sorely responsible for mistakes, errors, views and opinions which may
be found in this research report%
v
LIST OF TABLES
/able 7: Distribution of nominees from different sections in $inance department at Dar es
salaam port%
/able53 Determination of E(.0- knowledge%
/able 83 (dentification of usefulness of accounting information in decision making
/able 93 0pinion on the risk associated with computerized #ccounting (nformation
vi
ABSTRACT
/his research is about the effectiveness of accounting information in decision making in
different organization% /he case study is Dar es salaam ort of /anzania% /he research is
conducted for the period of about four months from 57 0ctober 5678 to 5B $ebruary
5679%
/he research report has five chapters% (n which, .hapter one is concerning with the
introduction and background of the problem %(t include statement of the problem,
research ob'ective, research !uestions, significance of the study, limitation and
delimitation of the study%
.hapter two is about literature review% 2iterature review comprise of theoretical
literature review and empirical literature review% (t discusses different authors playing a
great role on writing about accounting information and its relation to decision making%
(t involve review of related literature in which various books, publications, reports and
other sources have been revised% /he aim of this chapter is to establish the relevance of
the theories and principles to the research study%
.hapter three is about research methodology% /he chapter discuss about the study area,
study population, units of analysis, variables and their measurements, sample size and
sampling techni!ues, types and sources of data, data collection methods such as
interview, !uestionnaire, documentation and observation%
.hapter four describes presentation and analysis of findings, and .hapter five is about
conclusion and recommendation of the topic studied%
vii
ABBREVIATIONS
/# C/anzania orts #uthority
D CDar es salaam port
/1# C/anzania 1arbors #uthority
1-/M Crincipal 1uman -esources /raining Manager
1-M Cort 1uman -esources Manager
:## C:eneral #ccepted #ccounting rinciples
($-Ss C(nternational $inancial -eporting Standards
#@E Cay #s @ou Earn
viii
TABLE OF CONTENTS
CERTIFICATION............................................................................................................. i
DECLARATION............................................................................................................... ii
COPYRIGHT............................................................................................................... iii
DEDICATION................................................................................................................. iv
ACKNOWLEDGEMENT.................................................................................................. v
ABSTRACT................................................................................................................... vii
CHAPTER ONE.............................................................................................................. 1
1.0INTRODUCTION.................................................................................................... 1
1.1 HISTORICAL BACKGROUND OF TANZANIA PORT AUTHORITY......................1
1.4 BACKGROUND TO THE PROBLEM: .................................................................
1.4 STATEMENT OF THE PROBLEM:.......................................................................4
1.! OB"ECTI#ES OF THE STUDY:............................................................................!
1.!.0 M$i% &'()*+iv):...............................................................................................!
1., RESEARCH -UESTIONS:...................................................................................,
1.. SIGNIFICANCE OF THE STUDY: ........................................................................,
1./ THE SCOPE OF THE STUDY:...............................................................................
1.0. LIMITATIONS OF THE STUDY............................................................................/
1.10. DELIMITATION OF THE STUDY.......................................................................0
CHAPTER TWO ...................................................................................................... 10
.0. LITERATURE RE#IEW:.....................................................................................11
.1.0 CONCEPTUAL FRAMEWORK:....................................................................11
.1.1 ACCOUNTING:1............................................................................................ 11
.1. ACCOUNTING INFORMATION:1..................................................................11
.1.2 INFORMATION SYSTEMS:1.........................................................................11
.1.4 THE ACCOUNTING SYSTEMS:1..................................................................11
.1.! ACCOUNTING PROCESS:1.........................................................................1
.1., FINANCIAL STATEMENTS:1........................................................................1
.1.. DECISION:1.................................................................................................. 1
.1./ DECISION1MAKING:1...................................................................................1
i3
. THEORETICAL LITERATURE RE#IEW:............................................................12
..1 SOURCES OF ACCOUNTING PRINCIPLES AND PRACTICES:1...............12
.. PURPOSE OF FINANCIAL STATEMENTS:1................................................12
..2 TYPES OF FINANCIAL STATEMENTS:1.....................................................14
.. 4 LIMITATIONS OF FINANCIAL STATEMENTS:...........................................1!
..! USERS OF FINANCIAL STATEMENTS:......................................................1,
... DECISION MAKING PROCESS:..................................................................1/
../ SOURCES OF DOCUMENTS FOR DECISION MAKING:............................0
.2 EMPIRICAL LITERATURE RE#IEW:..................................................................1
CHAPTER THREE....................................................................................................
2.0 RESEARCH METHODOLOGY...........................................................................
2. RESEARCH DESIGN..........................................................................................
2.2 AREA OF THE STUDY....................................................................................... 2
2.4 POPULATION 4UNIT OF IN-UIRY5....................................................................2
2.! SAMPLE SIZE................................................................................................. 2
2., SAMPLING DESIGN: ......................................................................................... 2
2.,.1 Si678) R$%9&6 S$678i%:.............................................................................4
2.,. ";9:6)%+$8 S$678i%: M)+<&9.......................................................................4
2.. DATA COLLECTION INSTRUMENTS................................................................!
2...1 -;)=+i&%%$i>)=.............................................................................................. !
2... I%+)>vi)?= ..................................................................................................... !
2...2 D&*;6)%+$+i&%.............................................................................................. !
2...4 O'=)>v$+i&% A%9 P$>+i*i7$+i&%.......................................................................,
2./ DATA ANALYSIS TECHNI-UES:.......................................................................,
2./.1 -;$%+i+$+iv) M)+<&9...................................................................................... ,
2./. -;$8i+$+iv) 6)+<&9 ....................................................................................... .
2.0 TYPES OF DATA COLLECTED...........................................................................
2.0.1 P>i6$>@ D$+$ ................................................................................................ .
2.0. S)*&%9$>@ D$+$............................................................................................ .
CHAPTER FOUR.......................................................................................................... /
4.0 RESEARCH FINDINGS AND ANALYSIS ............................................................../
3
4.1 TANZANIA PORT AUTHORITY ACCOUNTING SYSTEM................................../
4.1.1 K%&?8)9:) &% +<) ;=) &A EPICOR................................................................0
4.1. D)*i=i&% M$Bi%: S@=+)6 ..............................................................................20
4.1.2 R)=7&%=i'i8i+@ F&> T<) G&&9= C S)>vi*)= OAA)>)9........................................2,
4.1.4 U=)>= OA D$> E= S$8$$6 P&>+ A**&;%+i%: I%A&>6$+i&%..................................2.
4.1.! T<) U=)A;8%)== OA A**&;%+i%: I%A&>6$+i&% I% D)*i=i&% M$Bi%:....................2.
4.1., P>&'8)6= A==&*i$+)9 Wi+< C&67;+)>iD)9 A**&;%+i%: I%A&>6$+i&%................2/
4. INTERPRETATION OF FINDINGS.....................................................................40
CHAPTER FI#E...................................................................................................... 41
!.1 CONCLUSION.................................................................................................... 4
!. RECOMMENDATIONS....................................................................................... 4
!.. T>$i%i%: )%91;=)>=: ..................................................................................42
REFERRENCE:............................................................................................................ 42
APPENDICES:.............................................................................................................. 4!
3i
CHAPTER ONE
.! INTRODUCTION
/his chapter contains historical background of the organization, "ackground of the
roblem, statement of the problem, ob'ectives of the study, -esearch Duestions,
Significance of the study, Scope of the study, limitations of the study and delimitation of
the study
. HISTORICAL BACKGROUND OF TANZANIA PORT AUTHORITY
/anzania port authority was formed on 7Eth #pril 566E%/he orts was established under
the orts #ct, +o% 7F of 5669 as a landlord port authority in /anzania% /# is charged
with the responsibility of developing, managing and operating all seaports and inland
ports on /anzania Mainland, which were formerly under the /anzania 1arbors
#uthority </1#= and Marine Services .ompany 2imited respectively%
." FUNCTIONS
/he underlying ob'ective of /# in carrying out its functions and e)ercising its powers
provided for under the orts #ct 5669 is to enhance the advantages of geographical
position of /anzania as a maritime nation by3
i% Establishing and coordinating system of ports%
ii% With the approval of the Minister, constructing and operating new ports%
iii% #cting as a warehouseman to store goods, whether or not the goods have been or
are to be handled as cargo or carried by the #uthority%
iv% roviding port facilities and services%
v% romoting effective management and operations of sea and inland waterways
ports%
1
vi% Securing the provision of, or to provide services in relation to loading and
unloading of cargo and passenger services%
vii% Developing, promoting and managing port infrastructure and superstructure%
viii% Maintaining port safety and security%
i)% Entering into contractual obligations with other persons or body of persons in
order to secure the provision of port services, by means of concessionG 'oint
venture, public, private partnership or other means, and to this end to delegate its
own function of providing port services to one or more port operators%
.# ORGANIZATION
Management of business and affairs of the #uthority is vested in the "oard of Directors%
/he "oard sets the policy, reviews the ob'ectives, direct strategies for performance
improvements and assesses management;s performance%
/he Director :eneral is the .hief E)ecutive officer responsible for the proper and
efficient conduct of the business and activities of the #uthority% /he Director :eneral is
assisted by the Deputy Director :eneral, 77 Directors, H Managers of specialized units,
ort Manager for Dar es Salaam and ort Masters for /anga, Mtwara, Mwanza, Iigoma
and Iyela orts%
.$ BACKGROUND TO THE PROBLEM:
#s far as back 7J56s, sources of information for decisionCmaking in the organizations
were inade!uate% "ecause of few alternatives e)isted, the organization decision makers
relied on historical cost transactions based accounting information%

#n annual report was satisfactory but the alternative made transactions forms more
costly and time consuming% /oday, an annual report can be oldCfashioned by the time it
is printed% /he financial statements prepared by accountants seem to fulfill the
organization;s decision re!uirements%
/he spirit of learning accounting information is the ability to assess the appropriateness
of accounting information for different situations% /hese in turn provide the bases for
rational decision%
Under the view of accounting information system, accounting information are
categorized into two formsG that is, financial information and nonCfinancial information%
I. Financial information
/hese include sales, net income, total assets, and cost of products e)pressed in monetary
terms such as /shs, Ishs and US K
II. Non-financial information
/hese include number of inventory on hand, number of budgeted labor hours to produce
the good and time taken to manufacture the good%
#ll these information were likely collected and processed outside the traditional
accounting information system%
/he uses of multiple information system in the organization cause a number of
problems% (t is costly to support multiple systems and it is difficult to integrate
information coming from various multiple systems and to make decisions for an
organization with multiple sources of information%
0ver the past few years, enterprise resource planning systems have been developed in an
attempt to address these shortcomings% /he system integrate the traditional accounting
information system with other information systems to capture both !ualitative and
2
!uantitative data, collect and organize that data into useful information, and to transform
that information into knowledge that can be communicated throughout the organization%
Many different users have need for accounting information in order to make important
decisions% /his is because the primary role of accounting information is to provide the
useful information for decisionCmaking purpose% (t is sometimes referred to as a means
to an end, with the end being the rational decision that is helped by the availability of the
accounting information% /he users of accounting information include (nvestors,
.reditors, Management, :overnment agencies, and other stakeholders%
(t is from these ob'ectives that the organizations should install appropriate accounting
system that will facilitate the creation, communication, and interpretation of accounting
information for decisionCmaking purposes%
/he installation of accounting package costs much money that hinders its availability in
most organizations% 1owever, some organizations had tried their level best to purchase
their own packages according to their organizational desires% #ccounting package not
only facilitates transaction processing but also minimizes human error of either entering
wrong data or omitting some significant facts%
.$ STATEMENT OF THE PROBLEM:
"asic idea behind accounting information is to provide the bases for rational decision%
WellCprepared accounting information is therefore a necessary tool in evaluating
organization performance%
When proper guidelines in preparing accounting information are not followed, the
organization;s decision makers may make wrong decision that will impair the
organization performance% /he changing technology and circumstances such as
adaptation of (nternational financial reporting standards <($-Ss= may cause problems in
the preparation of books of accounts and financial statements% (t was presumed that the
accountants of /anzania orts #uthority particular in Dar es salaam port who are
4
responsible in the preparation of books of accounts might in one way or another fail to
adopt on the standards and finally give out wrong statements% /his could happen if
accountants of Dar es salaam port do not attend periodic seminars and workshop, which
constantly remind and teaches on the changing reporting standards%
/his research is the work done in which ( identify the key aspects of accounting
information in Dar es salaam port concerning its effectiveness in decisionCmaking during
the period of my field work% /he undertakings for this study works on what is defined as
the accounting information in Dar es salaam port and the ma'or types of accounting
information available in the organization and its relation to decisionCmaking process%
.% OB&ECTIVES OF THE STUDY:
.%.! M'() *+,-./(0-:
/o e)amine the effectiveness of accounting information in decision making at
/anzania orts #uthority </#= in Dar es salaam port%
.%. S1-.(2(. *+,-./(0-3:
i% /o find out to what e)tent the management of Dar es salaam port put into
account the available accounting information and its values before making
any decision%
ii% /o assess as to whether the preparations of accounting information comply with
/anzania orts #uthority </#= olicies and :enerally #ccepted #ccounting
rinciples <:##s=%
iii% /o observe the creation, communication and interpretation of accounting
information at Dar es salaam port%
iv% /o assess as to how directors of Dar es salaam port recognize the importance of
accounting information in decisionCmaking%
!
.4 RESEARCH QUESTIONS:
(n order to obtain relevant data that will be used in drawing conclusion, a series of
!uestions were prepared% "oth general and specific !uestions guided me as a researcher
in gathering information%
.4. T5- 6-)-7'8 9:-3/(*) (3;
What is the effect of accounting information in decision makingL
.4." T5- 31-.(2(. 9:-3/(*)3 '7-:
i% .an an organization attain its ob'ectives if accounting information is not put in
useL
ii% Does the value of the accounting information being recognizedL
iii% What are the limitations on using accounting information for decisionCmakingL
iv% Does the organization face any problem in the accounting systemL
.< SIGNIFICANCE OF THE STUDY:
/he study has the following rationaleG
(% /o the organization3
/he study will help the management of Dar es salaam port to reckon the importance of
accounting information in decision making%
(( %/o the researchers3
"eing an empirical work, the study will encourage other researchers to further study on
the topic, which is to go deep in searching information for the same study%
,
(((% /o the students3
#s a student the study will become one way of applying theoretical training of the
"achelor Degree in #ccount and $inance to address practical problems within the
organization%
(M% /o the #ccountants3
/he research will provide insights to future #ccountants on the importance of wellC
prepared accounting information%
M% /o the University3
#s a partial fulfillment to be submitted to the Mzumbe University, the outcome will
lead into award of the "achelor Degree in #ccount and $inance%
.= THE SCOPE OF THE STUDY:
/he research is a case study of /anzania ort #uthority in Dar es salaam port % #s (;m
researcher, ( limited my study on the staff working with Dar es salaam port staff workers
at the Department of $inance%
Under the department of finance, ( deal with the following subCdepartments <sections= in
order to gather information for my field work% /hese areG
.ash and bank section
ay roll section
rocurement section
"udget section
Store section
-egistry <-ecords keeping and management= section%
.
.>. LIMITATIONS OF THE STUDY.
/hese are constraints that in one way or another limited the performance of my field
work% /he following limitations were encountered during the fieldworkG
a% oor responseCSome employees responded poorly when re!uested by the
researcher to make conversation during the interview whereby some
claimed to be busy with organization activities% 1owever, the researcher
tried to minimize this constraint by giving them !uestionnaire to fill
them on their own spare time%
b% /ime $actorsC /ime allocated to .onduct the research was too short for
e)haustive study% $inance department consist of two sub departments%
/hese areG e)penditure department and revenue department% More time
was re!uired to e)tract a lot of information from each department as each
department has a number of sections which take long time to study on
each section as there are a Number of activities done in each section to
accomplish the transaction processing% So time was not enough to the
researcher to accomplish the whole study%
c% Slow return of !uestionnairesCSome of !uestionnaire distributed to the
nominees were not returned% /his is because some employees had
traveled away until when fieldwork ended% 1owever, the researcher used
the returned scripts as well as information obtained through other
methods such as interviews to make 'udgments%
d% #vailability of DataC Some data were considered highly confidential for
security purposes of the organization, so were difficult to obtain% ort
'ournals which contain the items of the financial statements were difficult
to obtain% Some of the items of financial statement are the items of
/
working capital hence missing of the financial statement means missing
of the important items re!uired by the researcher%
e% +egative perception to some employeesC Some of the respondents created
artificial behavior and become resistant in giving out information of their
own free will especially on what seems to be of interest to them,
especially their salaries% 1owever, they were willing to mention other
benefits they get from employment, for e)ample house and transport
allowances% (n this problem, the researcher tried her best e)cellent to get
accustomed to the respondents and narrated clearly the ob'ectives of her
study as a partial fulfillment of her career%
f% Shortage of fundC$und was inade!uate hence limited the researcher
from selecting a large sample size which could have provided big
proportional to the population% Data collected from a large number of
respondents are more reliable than data collected from few people%
.!. DELIMITATION OF THE STUDY.
/o be able to access data, a researcher instead participated in some of the company;s
operations which provided an opportunity for the researcher to access some of the
important information which had been used as a base for drawing a conclusion of this
studyG though it was a challenge to meet physically with some of the key officials of the
company, researcher made appointments to interview some of the senior officers and
various accountants of the company, the researcher made use of structured interviews%
+ever the less, since the funds were not ade!uate hence the researcher opted to use small
sample as well as opting to use the case study research design which reduced the costs of
conducting the study at reasonable level and in overcoming time limitations researcher
used !uestionnaire <with deadline for collection=, interview and observation as a
0
methods of data collection which reduced to some e)tent the time re!uired for collection
of data and processing of the same hence to conclude the study within re!uired time%
CHAPTER TWO
10
".!. LITERATURE REVIEW:
/his chapter is about concepts and theories from other researchers and authors on
accounting information and decision making, ranging from uses of accounting
information to decision making process and the relationship between these two things,
that is accounting information and decision making%
"..! CONCEPTUAL FRAMEWORK:
".. ACCOUNTING:?
(s the process of measuring, recording, classifying, and summarizing financial
information that is used in making economic decisions% (t is a means of social
communication that involves a flow of information%
".." ACCOUNTING INFORMATION:?
-efers to the financial data about business transactions e)pressed in monetary terms%
"..# INFORMATION SYSTEMS:?
#n information system identifies and collects data from appropriate sources and
converts the data into information that can be used in making decisions%
"..$ THE ACCOUNTING SYSTEMS:?
/he accounting system is the process in which data are input, recorded and stored in a
database, converted into summaries and tabulations, and transmitted to users as
schedules, reports and other types of information%
/he primary inputs to the accounting system are3 C costs of resources ac!uired and used
by an organization, prices of goods and services sold by an organization and
management policies affecting these activities%
11
"..% ACCOUNTING PROCESS:?
/o understand the accounting system, you must know how the system categorizes and
stores data% #n accounting is the basic unit for recording data in the accounting system%
(t contains a record of when an event occurred for the amount increase or decrease in the
account, and the balance of the account% #ccounts are categories for storing data% /he
number of accounts will vary, depending on the comple)ity and information needs of an
organization%
#ccounts for business organizations are separated into five main categories or types,
these are3 #ssets, 2iabilities, E!uity <.apital=, -evenues and E)penses%
"..4 FINANCIAL STATEMENTS:?
#re reports prepared for e)ternal users and then on answering their !uestions%
"..< DECISION:?
"asically the word ODecisionP means to suggest, to come to conclusion or resolution%
(t represents a course of behavior or action about what must be,or not done%
#ccording to Sherlekar <7JJF=, decision is a choice whereby a person comes to a
conclusion about a situation% Sherlekar elaborates further that decision is the act of
determining in ones own mind upon an opinion or a course of action from two or more
alternative course of action%
"..= DECISION?MAKING:?
Mac .rimmon <7JJB= defined decisionCmaking as the process of thought and action that
culminate in choice behavior% Mac .rimmon added further that decisionCmaking and
problem solving are interrelated topics both involving use of 'udgment, bridging thought
and action% Sometimes decision making is seen as the sub'ect of problem solving,
dealing with evaluation and choice from a set of alternativ
1
"." THEORETICAL LITERATURE REVIEW:
".". SOURCES OF ACCOUNTING PRINCIPLES AND PRACTICES:?
+ormally financial statements are prepared basing on the :enerally #ccepted
#ccounting rinciples <:##s=% /hese principles provide the guidance on how to
prepare the financial statements%
#ccording to (mdieke and Smith <7JBF=, the sources of accounting principles and
practices areG
#merican (nstitute of .ertified ublic #ccountants <#(.#=, $inancial #ccounting
Standards "oard <$#S"=, Security E)change .ommission <SE.=% 0thers are
(nternational #ccounting Standards .ommittee <(#S.=, (nternational $ederation of
#ccountants <($#.= and #merican #ccounting #ssociation <###=%
"."." PURPOSE OF FINANCIAL STATEMENTS:?
#ccording to (#S <5668=, the needs of financial statements differ from one group to the
other%
i= Shareholders are considering the provisions of longCterm finance,
ii= Employees and public are interested in information about the trends and recent
developments in the prosperity of the entities and the range of its activities,
iii= (nternal users need information in planning and controlling organization
operations and managing <allocating= organization;s resources%
So the accounting system should provide information contained in the financial
statements even though it has access to additional management and financial that helps it
carry out its planning, decisionCmaking and control responsibilities%
12
#ccording to :lautier and Underdown <7JJ6=, the purpose of accounting information is
to enable the organization to attain its goal% So the effectiveness of accounting
information is evidenced in the manner in which it affects behavior% /herefore unless
accounting information serve to produce the desired action, it is useless% #ccording to
them, previous researchers have shown for e)ample that managers can be provided with
all information needed but they do not always make the right decision%
#ccording to /hompson and /aylor <7JJJ=, the following are the purpose of financial
statements with respect to the groups of users
i= /he employees and labor unions are vitally interested in the firms survival and
possible growth and its ability to pay its bills in the case when wages due%
ii= /he current owners of the firm need information to evaluate the desirability of
making an ownership investment in becoming owners of the firm%
iii= .urrent potential suppliers as in the case of creditors lending money, need
information in order to evaluate the safety and desirability of the investment
".".# TYPES OF FINANCIAL STATEMENTS:?
/ypes of financial statements prepared by accountants depend on the uses of the
re!uired information%
#ccording to Ieith W% <7JJ5= financial statements are categorized into two types%
/hese are3
i= (nternal financial statements3
14
/he internal financial statements are prepared at the re!uest of management for the sole
uses of managers within the organization% /hey are not intended for use by e)ternal
users but 'ust for increase of organization performance% /hese must comply with
organizational policies%
ii= E)ternal financial statements3
/he e)ternal financial statements are the ones which are prepared for e)ternal <outside=
users such as creditors and stockholders% /hese must comply with :##s on their
preparation%
/he statements are balance sheet, income statement, retained earnings, and statement of
cash
".". $ LIMITATIONS OF FINANCIAL STATEMENTS:
Dr% Maheshwari S%+% <5665= identified the limitations of financial statements as
i= $inancial statements are essentially interim reports%
/he profits shown by rofit and 2oss account and financial position as depicted by the
balance sheet is not e)act% /he e)act position can be known only when the business is
wind up%
#gain the e)istence of contingent liabilities, deferred revenue e)penditure makes them
more imprecise%
ii=#ccounting concepts and conventions%
0n account of this reason the financial position as disclosed by the statements may be
unrealistic% E)ample financial asset on the balance sheet are shown on the basis of a
1!
going concern concept% /his means that value placed on financial assets may not be the
same which may be realized on their sale%
iii=(nfluence of personal 'udgmental%
Many items are left to the personal 'udgment of the accountant% E)ample the method of
depreciation, mode of amortization of financial assets%
iv=Disclose only monetary facts%
$inancial statements do not depict those facts that cannot be e)pressed in terms of
money% /hey depict only information which can be measured in monetary terms%
Mosich #, +% <7JB5= emphasized on limitations of accounting information by saying
that Oaccounting information often is limited because of many factors that are not sub'ect
to measurement in terms of money e%g% the human resources of a business enterprise and
economical and political environment in which the enterprise e)ists%
".".% USERS OF FINANCIAL STATEMENTS:
/he users of financial statements have been classified depending on the use and
re!uirements found in the prepared financial statements%
#ccording to ?ohn #% et all <7JBE= the users of financial statements includesG
i= .reditors and lenders,
iii= Employees and trade unions,
iv= :overnment,
v= .ustomers,
vi= Shareholders and investment analysts%
1,
#ccording to Smith S%<7JBF=, if accounting is to meet its ob'ectives of providing useful
information for economic decisionCmaking, one should bear in mind that, who is the user
of accounting information and the kind of information re!uired for decisionCmaking%
Smith added that the users of accounting information may be grouped into two groupsG
i=(nternal users <who make decisions directly affecting the internal operations of the
organization=
ii= E)ternal users <who make decisions concerning their relationships with the
organization=%
#ccording to $ess Warren <7JBF=, the users of financial statements are
i= /he "ankers who appraise the financial soundness of the business organization and
asses the risks involved before making loans or granting credit%
ii= /he :overnment agencies who are concerned with the financial activities of the
business organizations for the purpose of ta)ation and regulation%
iii=Managers who rely upon accounting information to assist them in evaluating current
operations and in planning future operations%
#ccording to (#S <5668=, the users of the financial statements include present and
potential investors, employees, lenders, government and their agencies and the general
public% /hey use financial statements in order to satisfy their different needs%
"."." HOW DO ACCOUNTS COMMUNICATE FINANCIAL INFORMATION@
/here are several ways of communicating financial information%
#ccording to 1enry D% <7JBF=, accountants and the users of accounting reports have
developed a standard format% /he communication is throughG
i= (ncome statement3
1.
.ommunicates the inflow of assets and the outflow or consumption of assets resulting
from the entity;s activities%
ii= "alance sheet3
/he balance sheet communicates the balances of what entity owns <called assets= and
what entity owes <called liabilities=% /he difference between assets and the liabilities is
called E!uity% E!uity amount represents the balance that belongs to the owners of the
entity%
".".< DECISION MAKING PROCESS:
(mdieke and Smith <7JBF= identified the process of decisionCmaking% #ccording to them,
the process involves the setting of goals, consideration of alternatives, making of
decision, implementation of decision, and lastly evaluation of results and feedback
provision%
/he illustration below shows the procedures to be followed in making decision%
SETTING GOALS CONSIDERATION OF DECISION
DECISION
REVISED GOALS ALTERNATIVES IS
IS
MADE
IMPLEMENTED



R-3:8/3 '7- -0'8:'/-A ')A 2--A+'.B 17*0(A-A
S*:7.-3 (MD(EIE Q SM(/1 <7JBF39=
1/
L:.-C TD (>>>) pointed out stages in the overall decision process as3
i= Definition of ob'ectives%
ii= .onsideration of alternatives%
iii= Evaluation of alternatives%
iv= Selection of the course of action
#ccording to Druly <7JJJ39E= the stages on decision making are as follows3
() D-2()(/(*) *2 *+,-./(0-33
/he decision makers must be aware of the organizations ob'ectives which should
wherever possible !ualify and they are specified and communicated widely%
(() C*)3(A-7'/(*) *2 '8/-7)'/(0-33
(deally an e)haustive list should be prepared covering all possible alternatives%
((() E0'8:'/(*) *2 '8/-7)'/(0-33
/his involves making !uantitative and financial comparison between the various
alternatives so that the ultimate decision maker is provided with relevant and
correctly specified financial basis for the final decision%
(0)S-8-./(*) *2 /5- .*:73- *2 './(*) E5-7- /5- './:'8 .5*(.- (3 F'A-%
(t involves personal, social, psychological and political factors as well as the
more ob'ectives financial and !uantitative consideration%
#ccording to M-(63 (>>!)D in order for accounting information to be proper for
decisionCmaking, they must pass through steps regardless of whether the accounting
system is simple or sophisticated% /hose three steps are3
10
i) Recording financial activity;
/his is creating a systematic record of the dayCtoCday business activity in
monetary terms <e%g% goods and services are purchased and sold, credit is
e)tended to customers debt are incurred and cash is received and paid out=%
ii) Classifying data;
/he data after being collected and recorded they must be classified into related
groups or categories of transactions <e%g% grouping together those transactions in
which cash is received or paid out= is a logical step in developing useful
information about the cash position of a business, and lastly %
iii) Summarizing the data in order to be useful to decision makers.
#ccounting data must be condensed and highly summarized% 1owever the
accounting process does not end up thereG the accounting information should be
communicated to interested parties and interpretation should be done to help in
the making of decisions
".".= SOURCES OF DOCUMENTS FOR DECISION MAKING:
Decision can;t be made without proper information kept within the documents% /here
are several documents in which organization;s decision maker concert in order to get
information to base when making decisions%
#ccording to ?ohn #% et all <7JBE=, the sources includeG
i= Sales invoice <credit sale=
ii= urchases invoice <purchase of supplies=
iii= .ash register tapes <cash sales=
0
".# EMPIRICAL LITERATURE REVIEW:
"roadbent etCal <7JJ9= considered the significance of accounting information%
/hey described that accounting information is very important as a communication tool%
"roadbent added that accounting information is being used as one element to 'ustify and
validate decisions% #ccounting information is used to convince others as a tool of
language to play the budget game% (t communicates particular realities%
:igerenzer <5666= in his research out of economics and cognitive psychology has
focused on the gap between the correct answer to a decision making problem and the
one given by sub'ects for problems of accounting information prepared by the
accounting departments in the world in general% :igerenzer denoted that in the past
years in the mid J6;s before the introduction of the ersonal .omputers and popular
spreadsheets applications, much of the information was being analyzed using the graphs
and tables representing numeric data for decision making in the organization%
"ut due to the increase in technology, accounting information has now become more
advanced by the introduction of accounting packages that help to minimize the risk of
wrong interpretations%
/he 'ournal of .ole and "urns <5668= pointed out that, some prior 'udgment and
decisionCmaking need not to be the thought of as the best modeled using the accounting
information mechanisms% /hey argued that there e)ists within human beings lower order
and higher order decision making and that the modeling lower order perceptual and
memory processes comes at amounts denoted at the accounting information%
#ccording to Dr% Mussa <5669=, the environment and especially accounting systems are
getting heavily computerized% $or instance accounting e)perts must not only be familiar
but proficient in the hardware components, storage media and applications%
#rguments made here must soon be born in the mind of every professional accountant in
order to bring the information processes of an organization for better decisionCmaking%
1
CHAPTER THREE
#.! RESEARCH METHODOLOGY
#. INTRODUCTION
/his chapter represents the research design and procedures that were used in the study% (t
includesG -esearch design, /ypes of Data and (nformation re!uired, Data collection
methods and strategies, Sampling techni!ues and procedures, Data management and
#nalysis%
#." RESEARCH DESIGN
-esearch design refers to a set of systematic research procedures and techni!ues which
helped the researcher to conduct the field study and avoid selfCdeception% /herefore,
research design is a procedural framework within which the research is conducted%
-esearch design is a systematic research plan that provides the direction of the study and
guides the researcher on how data should be collected, organized, analyzed and
interpreted% (t is the plan and structure of the researcher so conceived as to obtain
answers to research !uestions %Ierlinger <7JBH= and schendler, 5668%79H=
.ase study design was adoptedG where Dar es salaam ort was selected as the case for
investigation% /his type of research design accommodated almost all research
instruments especially interviews, observation and documentary reviews% <Iothari
5669=% "y using a case study, the researcher was able to be part of the organization and
hence secured more accurate information from the firm%
#dditionally a case study design was adopted due to the fact that it provided more
insights towards an in depth and breadth information on several variables from within a
single study unit and be able to provide some generalization%

$urthermore, with a case study, which is simple and fle)ible in data collection, time and
cost were minimized% /he chief reason for choosing this research design is to enable a
detailed and broad information gathering process relating the study%
#.# AREA OF THE STUDY
/he study was conducted at /anzania ort #uthority in Dar es salaam port, situated at
Iurasini, Dar es salaam /anzania% /he researcher chose this area of the study simply
because in /anzania ort #uthority particular Dar es salaam port accounting
information in decision making is put under consideration% 0n the other hand, this place
was chosen because it was easy for the researcher to access the place and also seized an
opportunity to participate in various activities of an organization% /his helped to solve
time and financial problems during the work%
#.$ POPULATION (UNIT OF INQUIRY)
$or the purpose of this research, the researcher has included $inance manager, .hief
accountant, accounts payable officers, cost accountants and other staffs from other
various sections hoping that these would be of great assistance and important in data
collection%
#.% SAMPLE SIZE
# researcher used a sample size of EB nominees% /he nominees were randomly selected
from each category and in some instanceG stratified sampling was adopted to come up
with convenient facts% "asing on stratified sampling, the following nominees were
consultedG $inance manager, .hief accountant, #ccount payable officers and some
officers from different sections%
#.4 SAMPLING DESIGN:
$or the purpose of obtaining list of names of the people to be interviewed, the simple
random sampling method and purposive,'udgmental sampling method were used%
2
/he following sampling procedures were employed during the field workG
#.4. S(F18- R')A*F S'F18()6
/he department of finance has more than H sections which are dealing with day to day
activities% "ut out of those sections, only 9 sections were selected as representatives of
other sections <See /able 7=% /hese sections are ayroll section, .ash and "ank section,
rocurement section as well as "udget section% #s the number of employees was not
e!ually distributed in all sections, stratified sampling techni!ue was adopted to ensure at
least there is a balance of respondents from each section%
/able 73 Distribution of nominees from different sections in $inance department at Dar
es salaam port%
N'F- *2
3-./(*)
P*1:8'/(*
)
S'F18()6
T-.5)(9:-
Q:-3/(*))'(
7- S'F18-
S(G-
S'F18()6
T-.5)(9:-
S'F18-
S(G- F*7
I)/-70(-E
ayroll 7H 7H,EB)8ERJ%HH 76 7H,EB)58RH%8
9
H
.ash and
bank
7E 7E,EB)8ERJ%6E J 7E,EB)58RE%J
9
H
rocurement F F,EB)8ER9%55 9 F,EB)58R5%FH 8
"udget 56 56,EB)8ER75%6F 75 56,EB)58RF%J B
TOTAL %= TOTAL #% TOTAL "#
0ut of the EB selected nominees, 8E candidates were given !uestionnaires to fill in,
while the rest 58 runners were interviewed%
/his involved the random selection of employees <Staff= from Dar es salaam port
at finance department%
#.4." &:A6F-)/'8 S'F18()6 M-/5*A
?udgmental sampling also was used to select nominees considered to be capable of
providing relevant information% Under that case, the senior organization decision makers
were consulted such as finance manager, chief accountant and principals for each
section%
4
(t was also used to select other sources of information such as organizational documents
that were appropriate for the field study%
#.< DATA COLLECTION INSTRUMENTS
(n order to obtain relevant information, a researcher collected data by using four
instruments%
/he instruments which were applied included !uestionnaires, interview, documentation,
observation and participation%
#.<. Q:-3/(*))'(7-3
Duestionnaires were prepared and distributed to respective nominees% /he nominees
were re!uested to read the !uestions and provide appropriate answers to the !uestions in
the !uestionnaire%
/his method assisted the researcher to obtain firstChand information <primary data= from
the respondents% /he nominees selected were those with some knowledge of preparing
financial statements and organization decision makers%
#.<." I)/-70(-E3
(n order to fulfill this study, the financial management e)perts were reached for
interview% (nterview was conducted to facilitate easily data collection and minimize
biasness that could be encountered in other methods% Due to time limitations, the
researcher managed to interview 76 respondents most of whom were accountants from
various sections of finance department%
#.<.# D*.:F-)/'/(*)
Documentation was used to collect secondary dataG that is information derived from
other sources such as organization records%
!
"y reading the available documents in the organization, the researcher was able to
collect information from the organization records% /his involved reviewing books of
accounts, reading organization contracts such as .ontract urchase 0rder <.0= as well
as studying computer programs%
#.<.$ O+3-70'/(*) A)A P'7/(.(1'/(*)
/his involved the observation of day to day activities so as to collect information
concerning the study% Since a researcher was involved in the daily activities of the
organization 'ust like other staff of finance department in Dar es salaam port, a
researcher had an opportunity of collecting information about the attitude, behavior and
perception of respondents in the problem area of concentration% (n this aspect the
researcher participated directly in carrying out activities such asG visiting and attending
problems to different workgroups, participating in official duties done in finance
department like preparation of payroll accounts, reconciling bank statements,
preparation of funds transfer and filing documents like over time% #ll these activities
were done under the supervision of financial controller%
#.= DATA ANALYSIS TECHNIQUES:
"oth !ualitative and !uantitative methods were employed to analyze data of the research
findings% /he techni!ue used depended on the data collected from despondences and
documents%
#.=. Q:')/(/'/(0- M-/5*A
Duantitative method was used to analyze data derived from numbers collected from
numerical and standardized data%
Using this method, the numerical data were analyzed through statistical methods% $or
that case the researcher employed statistical tables%
,
#.=." Q:'8(/'/(0- F-/5*A
# !ualitative method was used for those data which were e)pressed in terms of wordsG
that is nonCstandardized data% /he interpretation and meanings were e)pressed through
words% # researcher employed this method at the time of giving comments on the
information obtained% /his method dealt with nonC!uantitative data only%
#.> TYPES OF DATA COLLECTED
$or the purpose of this studyG two types of data were collected and analyzed% /hese were
primary data and secondary data%
#.>. P7(F'7C D'/'
/he primary data are those data collected for the first time from the field% #re those firstC
hand information derived directly from the field by a researcher him,herself% /hese data
were collected from various sources during the fieldwork% /he basic tools employed in
collecting primary data were !uestionnaire, observation, interview and participation%
#.>." S-.*)A'7C D'/'
/hese are data that have been already written and analyzed% #re the second hand
information in which a researcher obtains from an e)isting material derived by other
people% # researcher collected secondary data through documentation method% /he data
were obtained from various organization records such as 'ournals, contract purchase
order, sales invoice, 2ocal purchase order, purchases invoice, receipt note, payment
voucher, e)penditure voucher and minutes of management meeting%
.
CHAPTER FOUR
$.! RESEARCH FINDINGS AND ANALYSIS
/his chapter is about the presentation, analysis and interpretation of what has been
observed, e)perienced and e)tracted on the findings of the study, hence to provide a
clear, concise and logical picture concerning the general ob'ectives of the study% /he
data obtained were analyzed using the tools mentioned in chapter three to build this
information% (n analyzing the data research !uestions were considered%
/his chapter is so crucial due to the fact that it is the core of the study as it provides
answers to the research !uestions% /his chapter revealed the relationship between the
research !uestions and what actually e)ists in the organization under the study% /he
findings obtained are based on the data collected and then classified into meaningful
information%
$. TANZANIA PORT AUTHORITY ACCOUNTING SYSTEM
/anzania port #uthority in Dar es salaam port has computerized its accounting system
where by E(.0- accounting package is installed% E(.0- performs all accounting
information%
/he package facilitates not only /anzania ort #uthority activities but also helps to
minimize human errors%
(t was observed that most information that involves financial decision has to be obtained
from the E(.0- which act as a database%
/anzania ort #uthority has been using E(.0- accounting package to fulfill the needs
of the organization% /he software contains many fle)ible applications that cater the
organization re!uirements in computing and compiling data for decision making%
/
$or e)ample, the E(.0- contains E-, 2ocation, Sub analysis, #mount and the
E)planation% When entering the payments within the system, all procedures must be
followed step by step% (f the data are misallocated, the system does not accept the
entrance%
/herefore the system will re!uest you to begin with account code followed by pro'ect
number, fund code, location, sub analysis if any, amount and lastly e)planation for such
payment%
$.. K)*E8-A6- *) /5- :3- *2 EPICOR
(n order to understand the competence on the use of E(.0-, 56 employees were
interviewed% #mong of the interviewed EES were competent while 9ES were not
competent </able 5=% /hose who were competent with the use of E(.0- came from the
.ash and bank section, payroll section and rocurement section% 0n the other hand a
small number of incompetent personnel on the use of E(.0- were because of the
nature of their activities whereby most of these employees were dealing with pro'ect
activities apart from financial activities%
0
T'+8- ": D-/-7F()'/(*) *2 EPICOR B)*E8-A6-.
Department .ompetent (ncompetent
.ash Q "ank E 6
ayroll 5 6
rocurement 9 6
0ther employee 6 J
T*/'8 77 J
HD(3/7(+:/(*) EE 9E
Source3 (nterview
$.." D-.(3(*) M'B()6 SC3/-F
/he department of $inance is responsible in the preparation of accounting information
that aims at providing relevant information for decision making% /he preparation of
accounting information and the authorization for payment involves a series of
procedures from payment processing to authorization of payment%
.onsider the following T')G')(' 1*7/ A:/5*7(/C A..*:)/()6 I F()').- S/7:./:7-:
20
Director of Finance & Administration
Financial Controller
Accounting manager Budget Manager
Accounts Payable Supervisor
Accountants
Director of Finance & Administration
Financial Controller
Accounting manager Budget Manager
Accounts Payable Supervisor
Accountants
P'CF-)/ P7*.-33()6
/he payment in Dar es salaam port is usually processed by any accountant from $inance
Department%
"efore the payments is processed, an accountant has to pass through documents such as
purchase voucher, sales invoice, contract and checking if all necessary documents
which demands payments have been attached and verification has been done by the
authority responsible%
(f it is proved that all the necessary re!uirements have been met, then the ayment
Moucher is prepared%
V-7(2(.'/(*) *2 P'CF-)/3
21
/he verification of payments in the department of accounting and finance vest on the
#ccount ayable Supervisor%
/he account payable supervisor passes through all the documents that demand payments
to see if they have met all the necessary re!uirements%
#ccount payable supervisor also inspects the payment voucher to see if the funds were
allocated in the proper code within the accounting system%
(f he assures that the documents comply with the necessary re!uirements, then he
verifies the payments and sign the payment voucher to acknowledge the payments%
P'CF-)/ A:/5*7(G'/(*)
Usually the payments in Dar es salaam port are authorized by Director of $inance Q
#dministration% "ut this person cannot allow payments if documents do not bear the
signature of $inancial controller who is responsible for cash management% /herefore,
once accountant completes his duty, the documents are then forwarded to the $inancial
.ontroller who reviews them% (f the funds are sufficient and the documents bear all
formalities then he sign the document to admit payments%
P'CF-)/ M'))-7
Dar es salaam port normally makes payment through .he!ues% When the payments have
been entered in the system, a che!ue is written demanding the "ank where Dar es
salaam port has its account to pay the named person% Usually Dar es salaam port use
.-D" "ank to make payment%
B'3(3 *2 W7(/()6 ' C5-9:-
(t is very rare in Dar es salaam port to find a che!ue in possession due to insufficient
funds% #ccountants in #ccounting Q $inance department are very careful in making
payments% "efore a payment is processed, an accountant opens the cash book to see if
there is sufficient fund to allow payments% (f it happen that the funds available in the
cash book is not sufficient, the che!ue writing is postponed until there is enough fund%
2
1owever, it may happen that the che!ue was prepared before recognition of the
availability of funds% (f that is the case, the che!ue is repossessed until the funds allows%
C'35 D(3+:73-F-)/:
"efore any payment is entered in the system, the cash disbursement re!uest form has to
be prepared% /he form gives all the details of the payment whereby accounts payable
supervisor review it before he acknowledges the payments to be entered in the system%
.ash disbursement re!uest form has five ma'or partsG these are3
() P'CF-)/ ()3/7:./(*)3.
/his part re!uires the payee name, amount to be paid in figures and words as well as
e)planation for such payment%
(() T7')32-7 ()3/7:./(*)3
/his part is filled if the money is transferred to sub grantee% /his section comprises the
bank name, bank address, account name and account number%
((() EJ1-)3- '..*:)/ A(3/7(+:/(*)
/his section is filled if Dar es salaam port has already incurred liability for the goods
supplied or services offered% (t describes how the e)pense should be distributed% /he
section comprises account code, pro'ect number, fund code, location, sub analysis if any
and amount%
(0) AA0').- ()2*7F'/(*)
/his part is for advance details% (f the money is taken as advance, the details for advance
have to be specified such as vendor advance and travel advance%
0) S(6)'/:7-3.
/his is the last section of the form% #fter all procedures, a form is signed by a person
who prepared it, reviewed and lastly authorized by the authority%
A..*:)/()6 B'3(3
22
/he Dar es salaam ort olicy re!uires accounts to be prepared on accrual basis%
$ollowing such re!uirements, Dar es salaam ort usually prepares its accounts on
accrual basis% /his means that goods have to be delivered first before a payment is done,
or service has to be offered before claiming for payments%
1owever, not all accounts are prepared on accrual basis% Most of accounts which are
prepared on accrual basis are vendor accounts%
/he researcher observed that accounts which are or may be prepared on cash basis are
employee accounts% $or e)ample, an employee can take travel advance whereby he,she
li!uidate the same on return%
AA0').- P'CF-)/3
#s stated earlier, sometimes Dar es salaam ort makes payments in advance%
/he group of accounts which fall under this category includes SubCgrant advance,
ro'ect advance, /ravel advance <(nternational or +ational=, and in some rare cases
Mendor advance%
D'7 -3 3'8''F P*7/ V-)A*73
Dar es salaam port vendors are categorized into two typesG
. R-9:(7-A 0-)A*73
/hese are vendors who provide services under longCterm contracts% /his type of
vendor provides services based on the conditions stipulated in the contract% /he
price for the product remains constant regardless of the economic changes until
the fi)ed period elapse%
". N*7F'8 0-)A*73
/hese are vendors who provide services based on the re!uirement of that
service at that particular time% Usually such goods or services are not in the
permanent needs% /he price for the goods supplied or services offered is the
market price ruling at that particular time%
24
L(9:(A'/(*) A..*:)/
#ny mount taken in advance has to be li!uidated% /he li!uidation is done after
completion of activity%
/he payee is supposed to show how he,she has e)pended the amount taken% 1e,she also
needs to present the relevant document that proves the e)penditure%
(f the e)penditure is higher than the advance taken, then Dar es salaam port has to pay
the difference whereby if e)penditure is less than amount in advance, the payee pays the
deficit%
P'C7*88 P7-1'7'/(*)3
ayroll usually represents the largest proportion of organization e)penditure and is an
area where rational decision is essential for the organization survival% articular care is
needed when preparing a payroll%
Dar es salaam port maintains a payroll at $inance department in payroll office% /he
payroll accountant is responsible for the preparation of the payroll basing on data
obtained from 1uman -esource Department% 1uman -esource Manager is for hiring
new staff, setting salary rates and other information related to employees% /hese data are
processed in order to administer payroll payment at the end of each month%
B')B R-.*).(8('/(*)
/he bank reconciliation is usually done at the end of each month% /his help to establish
accuracy and completeness to records in cashbook against bank statement% (t helps to
reveal outstanding items recorded in the cashbook but not in the bank statement
une)plained charges by the bank and errors made either by bank staff or organization
staff%
2!
$..# R-31*)3(+(8(/C F*7 T5- G**A3 I S-70(.-3 O22-7-A
R-.-1/(*) ')A R-.*6)(/(*) *2 G**A3 3:118(-A
Usually the responsibilities of receiving goods in Dar es salaam port vest on
rocurement Department%
When the Mendor delivers goods, one of rocurement officers has to inspect the
received goods if they are in good order, of ordered type, and the !uantity ordered% /hen
he,she has to reconcile the delivery note with the physical count of the goods received%
When an officer is assured that the contents in the delivery note gives the same amount
obtained through physical check and counts, he,she prepares a :eneral -eceipt +ote
<:-+=%/he :-+ together with other documents such as .ontract urchase 0rder
<.0=, 2ocal urchase 0rder <20=, /a) invoice, delivery note and other supporting
documents are then filed to $inance Q #ccounting Department for payment process%
R-.*6)(/(*) *2 S-70(.-3 *22-7-A
(n Dar es salaam port the responsibility of recognizing the services offered rest on the
authority responsible within a particular department responsible for providing such
service or where the service was offered%
$or instance if the service provided is transport, then /ransport 0fficer is responsible for
recognition of such service%
(f the service provider delivers a delivery note accompanied by an invoice demanding
payments for the services offered, a /ransport 0fficer cross check the delivery note to
see as to whether the service was offered or not% (f assured that the service was offered,
he,she sign the invoice to approve the service and file the same to #ccounting Q $inance
department for payment process%
2,
$..$ U3-73 O2 D'7 E3 S'8''F P*7/ A..*:)/()6 I)2*7F'/(*).
Most of the respondents depicted users of accounting information asG
D'7 -3 3'8''F 1*7/ A*)*73: /he donors are interested in knowing the treatment of their
funds and how were e)pended%
D'7 -3 3'8''F 1*7/ ':A(/*73: Dar es salaam port has two categories of auditors,
namely internal and e)ternal auditors% /he internal auditors are for the improvement of
organization performance while e)ternal auditors are for assessment to determine if the
financial statements comply with :##s and ($-Ss%
D'7 -3 3'8''F 1*7/ A(7-./*73KF')'6-F-)/: /hese needs financial statement to asses
the organization prosperity% #ctually directors are decision makers of the organization
and since their decision usually base on accounting information therefore the use is very
high%
G*0-7)F-)/ '6-).(-3 3:.5 TRA: /he /anzania -evenue #uthority needs financial
statement to calculate the #@E <ay as you earn=
$..% T5- U3-2:8)-33 O2 A..*:)/()6 I)2*7F'/(*) I) D-.(3(*) M'B()6
$or the determination on the e)tent of usefulness of accounting information, in decision
making at Dar es salaam port, !uestionnaires were administered to the staff and mostly
senior Q 'unior e)ecutive of the organization% #n instrument came out with the
following results </able 8=3
2.
T'+8- #: IA-)/(2(.'/(*) *2 :3-2:8)-33 *2 '..*:)/()6 ()2*7F'/(*) () A-.(3(*) F'B()6
D-1'7/F-)/ H(65 M-A(:
F
L*E
.ash Q "ank H 5 6
ayroll 8 6 6
rocurement 8 6 7
"udget 5 7 6
-egistry 8 7 9
T*/'8 = % =
HD(3/7(+:/(*) %< % "#
Source3 Duestionnaire
/he researcher found that EFS remarked that the usefulness of accounting information is
very high% 0n the other hand 7ES said that the usefulness is medium while 58S argued
that the usefulness is low% /herefore it is !uite clear that the management of Dar es
salaam port decision is based on accounting information furnished by accountants%
$..4 P7*+8-F3 A33*.('/-A W(/5 C*F1:/-7(G-A A..*:)/()6 I)2*7F'/(*)
Dar es salaam port has computerized accounting system in order to copy with the
glowing technology that aimed at reducing risks associated with manual work%
1owever,there are some risks associated with computerized accounting information
because this is the new technology which most organizations are trying to adopt <See
/able 9=%
2/
High
Medium
o!
"
#"
$"
%"
&"
%Distribution
Merits
Usefulness of Accounting Information
T'+8- $. O1()(*) *) /5- 7(3B '33*.('/-A E(/5 .*F1:/-7(G-A A..*:)/()6
I)2*7F'/(*).
1igh Moderate 2ow
Misinterpretation of data 6 5 59
ower problem 8 B 76
Wrong postage of data 6 E 7B
roblem on backups 7 F 56
T*/'8 9 55 F5
Source3 Duestionnaire and (nterview
M(3()/-717-/'/(*) *2 D'/'
(n order to understand the e)tent of data misinterpretation twenty si) respondents were
consulted% 59 respondents said misinterpretation is low while 5 respondents gave out
moderate misinterpretation% 0n the other side none responded to high misinterpretation%
/herefore it is !uite clear that the processed data are well interpreted by the
management% /he researcher found that the information obtained from finance
department are free from ambiguity that could impair any decision made%
/he !uestions posed by the researcher related to this part were to assess if there is power
problem during the conducts of data entry within the system% # researcher wanted to
know what is being done to avoid power failure that could result into wrong processed
data that may impair decision making%
/he respondents to these !uestions were 57% #mong these, 76 respondents said problem
is 2ow, B commented Moderate problems while 8 responded on high problem%
20
"
'
("
('
#"
#'
)"
Number of
Respondents
Merits
Misinterpretation of Data
High
Medium
o!
/he respondents said that power problem cannot lead into wrong production of
information since uncompleted transaction cannot be posted and saved in the system%
1owever, backup have been instituted for emergency case%
$." INTERPRETATION OF FINDINGS
Management needs to have assurance that the accounting system installed is working
properly in order to ensure that the information produced are accurate, significant and
timely produced for rational decision%
With reference to the Dar es salaam port, the following has been observed in relation to
decision makingG
i% #uthorization procedures are followed at every stage before any contractual obligation
is admitted%
ii /ransactions are recorded properly supported by documentary evidence%
iii% /here is a proper well T established procedures for proper custody of the
organization;s assets and that, #de!uate supervisory and managerial controls are
adhered to in order to ensure that policies and procedures of the organization are being
observed and effectively implemented%
$.".T5- 2*88*E()6 2'./*73 './3 '3 +'77(-73 2*7 3:..-332:8 A-.(3(*) 7-3:8/3:
#bsence of accurate documentationG
40
"
#
$
%
&
("
(#
No. Respondents
Merits
Power problem
High
Medium
o!
/he researcher observed that there is negligence in transaction filing% Some employees
never return the transaction in its proper location once taken for the use% (f the
transaction has been misallocated, it becomes difficult to get it when in need% 1owever,
the organization has good system of filling transactions for easy tracking when in need%
CHAPTER FIVE
%.! SUMMARYD CONCLUSION AND RCOMMENDATIONS:
/he observations which ultimately draw up conclusion to the imposed research
ob'ectives are presented in this chapter which generally concludes the research study%
/he chapter furthermore presents some recommendations some of which were depicted
41
from the respondents while others are the researcher;s views as the result of careful
analysis and observation performed in the areas of field study%
%. CONCLUSION
/he purpose of this study was to e)amine the effectiveness of accounting information in
decision making% /he researcher studied the creation, communication and interpretation
of accounting information which form the bases for decision making%
/he organization;s prosperity depends on the decision made regarding the problem
encountered% /he rational and sound decision will lead to the organization;s survival
while irrational decision will result into the closeCup of organization business% 1owever,
the rational decision depends on the accounting system which generates accounting
information for the organization decisions% /herefore the organization must ensure that
accounting package purchased meets the organization desire and is properly installed in
order to avoid wrong postage of data% Moreover, the organization decision makers must
be knowledgeable with the system instituted in order to avoid biased decisions that may
'eopardize the organization%
2astly, the /anzania ort #uthority decision makers should recognize the values of
accounting information when making economic decisions%
%." RECOMMENDATIONS
/he motive behind this research was to assess the impact of accounting information in
decision making% Under this section, the researcher proposes the following
recommendations based on the weaknesses encountered during the field work3
%.". EF18*C()6 A*.:F-)/ .*)/7*88-7:
/he researcher recommends the management to employ personnel whose duty is to
control the manufactured documents% /his will minimize misallocation of documents%
4
%."." T7'()()6 -)A?:3-73:
(t was observed that some accountants were not competent with some computer
applications% /herefore this resulted into wrong postage of data which eventually might
'eopardize the decisions%
( recommend the management to arrange at least seminars and tutorials on computer
based applications to the accountants in order to minimize,control wrong postage of data
into the system%
REFERRENCE:
#nold ?% etCal <7JBE=, $inancial #ccounting, rentice 1all (nternational <UI= 2td,
2ondon%
"ailey I% <7JJ9=, Methods of Social -esearch, 9
th
Edition, /he free press, +ew @ork%
42
"roadbent ?% and 2aughlin -% <7JJ9=, -esearch on +ature of #ccounting (nformation,
reCpress
(nc, US#%
.ole and "urns <5668=, -esearch on (nformation #bility to Decisions, Mac grawhil,
+ew @ork%
.ollin D% <7JJJ=, Management and .ost #ccounting, 8
rd
Edition, .hapman and 1all,
2ondon%
Dauderis 1% <7JBF=, $inancial #ccounting3 (ntroduction to Decision making, 1olt
-inehart and
Winston of .anada, .anada%
Dr%Iamaar <5666=, #ccounting (nformation, Southwest ublishing, .anada%
Dr%Myron 2% .ramer <5666=, Malue of (nformation, University of 1ampshire ress,
US#%
Dr%Maheshwari S%+ <5665=, .ost #ccounting and Management #ccounting, #%S%0ffset
ress,
+ew Delhi, (ndia
$#S" <7JB6=, Statement of $inancial #ccounting .oncepts5, Stanford <UI=, 2ondon%
$ess W% <7JBF=, #ccounting $inance, 7E
th
Edition, Southwestern ublishing .o% 0hio%
:igerenzer <5668=, -esearch on Decision making and (nformation Misualization, /he
free press,
2ondon%
1agan $% <5666=, -esearch Methodology and /echni!ues, D ublishing, 2ondon%
1indi +%M% and ?amal +%2 <5669=, Survey of #ssessment ractice, .orporate 1ouse
ublishers,
(ndia%
(mdieke 2%$% and Smith -%E% <7JBF=, $inancial #ccounting, 7
st
Edition, ?% Willy Q Sons,
+ew
@ork%
2ucey /% <7JJH=, .ost #ccounting, E
th
Edition, D ublishing, 2ondon%
Mc .rimmon <7JJB=, Decision Making in "usiness, $rontline ublishers .o% 2td, +ew
@ork%
Meigs Q Meigs <7JJ6=, #ccounting3 /he "asis of "usiness Decision, B
th
Edition,
Mc:rawhil
ublishing, +ew @ork%
44
-oger ?% <5668=, #ccounting (nformation for Decision Making, #tlanta ublishers,
:eorgia US#%
Sawyer -% ?ackson S% <566H=, Managerial #ccounting3 $ocus on Decision Making, reC
press
.o% (nc, US#%
/homson <7JJJ=, $inancial #ccounting, B
th
Edition, Southwestern ublishing .o% 0hio%
Ward I% <7JJ5=, Strategic Management #ccounting, M Q # /homson 2itho, Scotland%

APPENDICES:
A11-)A(J : Q:-3/(*))'(7-
-esearch /itle3 T5- E22-./(0-)-33 *2 A..*:)/()6 I)2*7F'/(*) () D-.(3(*)?F'B()6.
4!
Dear -espondent,
( am a student of Mzumbe University currently undertaking the study on the above topic%
/he ob'ective of this !uestionnaire is to provide assistance in data collection that aimed
at evaluating the effectiveness of accounting information in decision making% /he data
collected will not be shared with any individual or institution, only aggregate data and
summaries will be published%
( re!uest you to respond to the !uestions below by providing appropriate answers%
( wish to thank you in advance for your assistance%
@ours $aithful,
Mshihiri #thumani
Q:-3/(*)3:
7= What information are you getting from $inance departmentL
<a=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<b=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<c=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<d=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
5= #re they useful for decisionCmakingL
<a= @es
<b= +o
8= (f yes, do they influence your decisionCmakingL
<a= @es
<b= +o
9= /o what e)tent are they useful for your decisionCmakingL
<a= Mery high
<b= Medium
<c= 2ow

E= (n what ways have you managed to make decision using the accounting information
rovided by accountantsL
<a=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<b=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC

<c=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<d=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
H= (s there any situation in which an organization can fail to make decision basing on the
4,
repared accounting informationL
<a= @es
<b= +o
F= (f @es,+o what are the reasonsL
<a=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<b=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<c=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<d=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<e=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
B= What is being done to overcome this problemL
<a=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<b=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<c=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
J= What is your opinion towards the use of accounting information in decisionCmakingL

CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC CCCCCCC


76= What other information do you normally re!uire from finance department that you
are not accessible toL
<a=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<b=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
<c=CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
77= (f you obtain such information, how do you use itL
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
4.
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
75= #ccording to the change in /echnology, the use of manual accounting information is
outdated% /o what e)tent do you rely on accounting information prepared manually
to make decisionL
<a= Mery high
<b= Medium
<c= 2ow
78= What are your other sources of information apart from accounting information
regarding to your decision making processL
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC

/hanks for your responses
4/
40
!0
!1