The document discusses management accounting and decision making. It notes that management relies on financial and accounting information to make decisions and achieve organizational objectives. However, current management accounting reports are only utilized at around 50% and could be improved to better support decision making. The document recommends ensuring the right information reaches decision makers on time, and that reporting is accurate, relevant, consistent and clearly distributed to support optimal decision making.
The document discusses management accounting and decision making. It notes that management relies on financial and accounting information to make decisions and achieve organizational objectives. However, current management accounting reports are only utilized at around 50% and could be improved to better support decision making. The document recommends ensuring the right information reaches decision makers on time, and that reporting is accurate, relevant, consistent and clearly distributed to support optimal decision making.
The document discusses management accounting and decision making. It notes that management relies on financial and accounting information to make decisions and achieve organizational objectives. However, current management accounting reports are only utilized at around 50% and could be improved to better support decision making. The document recommends ensuring the right information reaches decision makers on time, and that reporting is accurate, relevant, consistent and clearly distributed to support optimal decision making.
The document discusses management accounting and decision making. It notes that management relies on financial and accounting information to make decisions and achieve organizational objectives. However, current management accounting reports are only utilized at around 50% and could be improved to better support decision making. The document recommends ensuring the right information reaches decision makers on time, and that reporting is accurate, relevant, consistent and clearly distributed to support optimal decision making.
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I.
Introduction
Managing the company is the process of conducting business operation
achieving short term and long term objectives, in line with the overall company`s objectives which is to ensure the company existence in the constantly changing market environment.
In the market economy, the way in which company is managed and develops is extremely important, because every wrong or misleading decision comes at high price. Therefore each decision that management bring should be used on precise, qualitative, timely and unambiguous information.
Business information system is composed of several subsystems management
information system, accounting information system, marketing information, human resource information system and other. Undoubtedly, significant role in information processing for effective decision making belongs to accounting information system. Accounting information system that collects and processes data from area of accounting planning, business transaction. Qualitative financial information should be comprehensible, comparable, relevant and reliable.
II. Background of the study
Making decisions is part of our every day’s lives. Considering organizational life, it is often one of the main functions and tasks of management, as underlined also in the statement above. Indeed, management and decision-making are often regarded as belonging together, as management usually makes the major decisions of the organization.
Decision-making involves the selection of the best course of action. In order to
decide on the best option, management has to judge the effectiveness of various alternatives. Therefore they need some guidance that is usually provided in form of data and information. For this reason they often rely on financial and economic information gathered by management accounting. Management accounting can be defined as the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of information that assists executives in fulfilling organizational objectives a formal mechanism for gathering and communicating data for the ends of aiding and coordinating collective decisions in light of the overall goals or objectives of an organization.
III. Discussions
To what extend does the management make use of the current management accounting reports- how useful are these perceived?
What challenges are seen to hinder the utilization of reported management
accounting information in decision-making?
What challenges are seen to hinder the utilization of reported should be
produced in the future to support the management activity, what issues should be considered?
How the reported management accounting information can better support in- formed and efficient managerial decision-making process?
IV. Conclusions
Having report containing financial information available to support decision-making
was seen as important to the organization’s management in many areas. Above all significant was perceived to have the reports available to support in developing long- term plans and strategies. As well, clearly necessary was considered to have these reports available to support in goals and objectives as well as, directing and controlling the performance. Regarding utilization of the financial information, the study result indicates in most of the cases currently about half of the available information is utilized. This is a strong indicator of the need, to pay more attention in the future to utilize available financial information more comprehensively in the organization.
Reliability and equality of reporting is also essential to invest in, because this directly affects the relevance of information. The accuracy of the reports is as well fundamental. According to the results, manual reporting poses challenges, as the data processing is slow the margin of error possibility increases. Therefore, it is essential to minimize this in future, as it is important to be able to produce consistent reports, in order to avoid misperceptions and ensure clear understanding of the reports. In addition, special attention needs to paid to user friendliness, right level of detail and analysis to increase the reports scope of usability and meet the management information needs as well as possible. As well, it would be important to make assessments of the quality and content of the reports in order to guarantee the reports' usability and accuracy to support their relevance in decision-making. In addition should strive to keep the reports clear and uniform, in order to assure their quality. In terms of the content, the reports will need to contain a more in-depth and analytical approach in the future to achieve the optimal benefits from the use of reports in decision-making. As a result of the abundance of information, will need to as well focus on clarity and compacting the reports to ensure the relevant information is displayed, so that it will be used in decision-making.
V. Recommendations
The findings of this study suggest that more attention should be paid to getting the right information to the right people in time to support decision-making, because all did not receive the reports they needed. This is important because information can only acquire value through the ability to influence the decision made by the users. This means that the utilization of a report is an important benchmark for its value, which is substantially affected by the availability of reported information on time. In additon to this it is aldo essential, as we have gone through, the information is relevant and accurate, to have value for the decision maker. Considering the current information and technology driven economy, the significance of understanding information sharing and the practice is emphasized for organizations to stay competitive and increase profitability. Thus, it is particularly important to ensure clear distribution of information to make sure all would have the right tools available to do the job. This distribution of information should be consistent and clearly guided. It is also important to clarify, whom to ask for the missing information if necessary, so the lack of information does not affect the work. Openness and broad dissemination of information are also seen to strongly support organizational learning, sense making and creation of new knowledge for decision-making.
