Discuss about the Accounting Information to Make Better Decisions.
The need for information is vital for explicit and concrete management decision-making as well as providing the basis for the sustainable success of an organization. In this regard, accounting information tends to be indispensable to achieving the goal as it serves as an efficient tool for decision making in an organization. In their research, Radcliffe, Campbell & Fogarty (2001), provide the notion that decision-making is a core aspect of the executive or management in any organization; however, must be based on the best course of action. The research identifies management accounting as a core aspect that guides decision making by providing financial and economic information which are critical elements for the organization. Nnenna (2012) defines management accounting as " the process of identifying, measurement, accumulation, analysis, interpretation and communication of information that can help the management in fulfilling the organizational objectives."
As derived from the definition, the information provided by management accounting enhance the ability to make economic or financial choices in any organization (Schipper, 2010). Apparently, most of the organizations have experienced failures due to poor decision making; however, successful companies thrive through good decisions influenced by accounting information promoting the idea that it's vital for the survival of an organization. Rich, Jones, Mowen & Hansen (2012) also postulates that accounting information uncovers bottlenecks before the occurrence and provides a chance to coordinate organizational activities as well as compelling managers to formalize planning based on the defined goals and objectives. The research will evaluate how managers can utilize accounting information to enhance decision-making in their organizations by adopting a mixed research approach and data collection methods such as interviews, observations, and questionnaires to make valid conclusions.
Research Aim and Objectives
The aim of this research involves evaluating how accounting data can be applied to inform the leaders on the most appropriate decisions to make in their organizations to maximize profits. Different objectives will also be used to help in achieving the above aim as listed below:
- To evaluate the uses of accounting information in any organization or business
- To establish how the accounting information can assist managers in decision making.
- To assess the effectiveness of the decisions made through the influence of accounting information.
- To explore how the managers can achieve quality accounting information to promote decision making.
A brief Methodology
The research will adopt different methods to ensure quality information is achieved as well as understand the research objective. The following methods will be applied in this study:
- Literature Review: The approach is based on an in-depth analysis of critical research works on the same research problem derived from diverse scholarly sources. Being a key management topic, there exist numerous research works on the subject which will provide the basis to compare the research data collected and the existing works to make concrete conclusions on the topic. The literature review approach will also assess the underlying theories or themes to understand what is contained in accounting information and why its effective in decision making (Grazia–Oana, 2012).
- Mixed Research Approach: The research approach involves a combination of both qualitative and quantitative research and will form the basis for performing the research. Its impact will be in both data collection and analysis where a descriptive approach will provide data. Additionally, quantitative analysis will be applied and will make use of statistical figures such as graphs and pie charts to analyze and present data.
- Surveys and Interviews: The two will serve as some of the key methods to collect data necessary to understand the research problem as well as decision making. The methods are effective in providing descriptive data which forms the basis for the completion of this research. To enhance the effectiveness of the research, the data collection tools will be based on selected case such as a renowned organization through which general information on the effectiveness of accounting information on decision-making (Christensen, 2010). Surveys will be conducted through self-administered questionnaires while interviews will include face-to-face method. Information relating to employee views will also be collected as well as that of the managers (Eierle, 2013).
- Observation of Key indicators of success or failure of the case organization: The method will involve observing the impact of decisions made through the influence of accounting information on the selected case and analyzing the same about performance before the use of the data (Bhimani, Gosselin, Soonawalla & Ncube, 2007). Key indicators such as organizational success, financial stability, employee trust on management will help evaluate the effectiveness of the method in decision making.
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Nnenna. O. M (2012).The use of Accounting Information as an Aid to Management in Decision Making.British Journal of Science, 5(1). Retrieved from https://www.ajournal.co.uk/pdfs/BSvolume5(1)/BSVol.5%20(1)%20Article%207.pdf
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Rich, J. S., Jones, J. P., Mowen, M. M., & Hansen, D. R. (2012). Cornerstones of financial accounting. Mason., OH: South-Western.
Schipper, K. (2010). How can we measure the costs and benefits of changes in financial reporting standards? Accounting and Business Research, 40(3), 309-327. Retrieved from https://search.proquest.com/docview/726391189?accountid=45049