The Effectiveness and Uses of Accounting Information for Decision Making in Public Sector Organization

The Effectiveness and Uses of Accounting Information for Decision Making in Public Sector Organization.

INTRODUCTION

One of the most effective uses of accounting information in decision-making. Decision-making has been described as a purposeful choice from a number of alternative causes of action.

The accounting information provides managers with the necessary information they need. In this case, it is the accountants that provide the information with which the management uses for its decision-making.

Managements can only come up with a good decision if they are able to get correct accounting information from the accountant. In a situation where the accountant does not provide correct information: this is bound to affect the decision-making of the management adversely.

The question now is, how business executives know the company is embarking on a favorable decision or unfavorable one. The answer to this question is based on the management and the accounting information.

According to Ray (1996), most top-level business executives have a background in accounting and finance than in any other field. The essence of using accounting information is to enable managers to make wise decisions.

It is also used (accounting information) to set up a system of internal control to increase efficiency and prevent fraud in companies. Accounting information aids in profit-making, budgeting, and cost control. In a company, it is the duty of the management accountant to see that his company keeps good records and prepares proper financial regulations.

Management accountants also need to keep up with the latest development in the use of computers and in computer system design.

Accountants provide many special reports for management, decision-making. This function requires the gathering of both historical and projected data. Indeed only a limited number of studies in international management research have a focus on the role utilization of accounting information in the holistic context 3 of decision-making strategies, processes, and preferences (Carr et al 1994; woutersan and Verdaasdonk 2002).

Greenwood and Hinings (1996) there is evidence which reveals the influence of accounting information in the decision-making process. it emphasizes the importance of a holistic context and which led to the integration of other institutional influences and multiple logics.

It is in this context that the research wishes to evaluate the effectiveness and uses of accounting information for decision-making in the public sector. In summary, accounting information is primarily concerned with data gathering from internal and external sources analyzing, processing, interpreting, and communicating the result (information) for use within the organization so that management can make more effective plans, decisions and control operations.

The central concern of the management is a decision. In making a sound decision the management needs some valuable and accurate information from the accountant.

The accountant is at the service of the management by providing the management with the necessary information which they need for decision making. In recent times, it was observed that cases of mismanagement, fraud, and irregularities prevail in the organization.

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