Accounting for Decision Making Assignment Help

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Accounting for Decision-Making

Accounting is a collection of systems and procedures utilized to record, report and analyze business transactions. Accounting gives an account - a description or report in financial terms - regarding the transactions of a company. It allows managers to please the stakeholders in the organization (owners, financiers, government, suppliers, employees, customers etc.) that they have acted in the paramount interests of stakeholders rather than themselves. This is the view of accountability to others, a consequence of the stewardship function of managers that occurs by the procedure of accounting. Stewardship is a significant concept in all but in tiny businesses, the owners of businesses are not similar as the managers. This division of ownership from control made accounting predominantly influential due to the stress given to augmenting shareholder wealth (or shareholder value). Accountability results in the construction of financial statements, mainly for those concerned parties who are outside to the business. This function is known as financial accounting.

Accounting is traditionally seen as fulfilling three functions:

  • Scorekeeping: recording, capturing, summarizing and reporting financial performance.
  • Attention-directing: taking the attention of managers to, and helping in the interpretation of business performance, specifically in terms of the contrast between actual and planned performance. 
  • Problem-solving: Selecting the top choice from a variety of alternative actions.

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