Impact of Accounting Information on the Decision Making Process of Management

Abstract

In the field of accounting, economic information is of great interest, meaning that accounting information plays an important part in the economic book-keeping/registration system in general, but also in the economic information system especially for decision making necessary for the business. Although accounting information are available for a wide range of users - stakeholders (managers, employees, suppliers, customers, financial creditors, government and its institutions, the public, the media, etc.), the investors (shareholders) are recognized as the privileged users of accounting information. Four principal qualitative characteristics must be met for the accounting information to be useful in the management system: understandability, relevance, reliability and compatibility of information. Any economic transaction processing involves collecting, categorizing, summing and analysing the data. From the findings of this research, it shows that accounting information play a vital role in making investment, financing, dividend and lending decisions. The sufficient supply and proper use of accounting information had gone a long way in helping management in making efficient and effective decision and for this, there is a significant of impact of the use of accounting information as an aid to management decision making in the institutions.