The Impact of Financial Accounting in Decision Making Processes in Business

Hussen Amran Naji Al-Refiay; Azher Subhi Abdulhussein; Sinan Salem Kasim Al-Shaikh

doi:10.26668/businessreview/2022.v7i4.e627

Authors

Hussen Amran Naji Al-Refiay University of Karbela https://orcid.org/0000-0002-4012-3537
Azher Subhi Abdulhussein University of Karbela https://orcid.org/0000-0001-6470-0100
Sinan Salem Kasim Al-Shaikh Mustansiriyah University. Baghdad https://orcid.org/0000-0003-3850-731X

DOI:

https://doi.org/10.26668/businessreview/2022.v7i4.e627

Keywords:

Financial Accounting, Financial Accounting Information, Porter’s Five Force, Business Establishment, Competitors’ Analysis, Sales And Marketing, Cash Flow

Abstract

Purpose: This Study aims to test the impact of financial accounting on the decision made by business managements. As well as to analyse the relation among the business management decision and the financial accounting.

Theoretical framework: This research is theoretically covered by accounting knowledge by testing the relationship between the accounting information and decision-making process.

Design/methodology/approach: Data was collected from the tehrantimes.com and it was observed that, there are total 33,800 active small and medium organization operating in Iraq in 2019. For simplifying the survey and data collection as well as to reduce the time and costing of survey, an online survey method is used to get the votes of all responders. In this survey, 836 responders were invited, participated and interviewed using a prepared using well questionnaire.

Findings: The result shows that the business accepts the fact that the financial accounting information, helps in analysing the factors which affect start-ups in the early state of business establishment, the also shows that financial accounting information helps in analysing competitor, and it satisfactorily defines the study of alternative options which buyers may have with respective product or service. The study also shows that financial accounting information does not helps in defining the bargaining capacity of supplier or buyers.

Research, Practical & Social implications: This study helps accounting regulators and process decision maker by having more understanding of this relationship. In addition, it increases the knowledge of the companies regarding the decision making and accounting information by developing the accounting information system to increase the quality of accounting.

Originality: This research contributes to accounting felid and accounting knowledge as well as to accounting practice by understanding the relationship between the financial information and decision making.

Downloads

Download data is not yet available.

References

Accounting information in innovative small cap firms: evidence from London’s Alternative Investment Market, Andrei Filip, Alessandro Ghio & Luc Paugam, 421-456, 25 Nov 2020

Achim, A. M., & Chiş, A. O. (2014). Financial accounting quality and its defining characteristics. SEA: Practical Application of Science, 2(3), 93-98

Akhmetshin, E. M., & Osadchy, E. A. (2015). New requirements to the control of the maintenance of accounting records of the company in the conditions of the economic insecurity. International Business Management, 9(5), 895-902

Černius, G. (2012). The Influence of Misleading Terminology on the Company’s Finances. Societal Studies, 4(2), 539-558.

Florin, B. (2014). Development of decision making by managers with financial and accounting information. The Annals of the University of Oradea, 1, 837-844

Gibson, B. (1992). Financial information for decision making: An alternative small firm perspective. The Journal of Entrepreneurial Finance, 1 (3), 221-232.

Grundy, T. (2006). Rethinking and reinventing Michael Porter’s five forces model. Strategic Change, 15(5), 213-229.

Hopwood, A. G. (2000). Understanding financial accounting practice. Accounting, Organizations and Society, 25 (8), 763-766

Institutional Logics, ICT and Stability of Management Accounting, Janne Järvinen, Jukka Pellinen, , European Accounting Review 18(2):241-275, DOI:10.1080/09638180802681511, June 2009

Kızıl, A., Kızıl C. (2007). Accounting: Financial, Cost, Managerial. Bahar Yayınevi, İstanbul, Türkiye, ISBN: 994463070-5.

Özay, T. (1992). Yönetimde Muhasebenin Yeri, Mali Çözüm Dergisi, No: 12, Şubat-Mart 1992.

Porter, M. E. (1989). How competitive forces shape strategy. In Readings in Strategic Management (pp. 133- 143). Palgrave, London.

Regmi, R. H. (2022). Remittances and trade balance: A new transfer problem. Remittances Review, 7(1), 3-19.

Salako, M. A., Yusuf, S. A. (2016). Cost Accounting: A Pivotal Factor of Entrepreneurial Success.

Schaltegger, S., & Burritt, R. L. (2010). Sustainability accounting for companies: Catchphrase or decision support for business leaders? Journal of World Business, 45 (4), 375-384

Spathis, C., & Constantinides, S. (2004). Enterprise resource planning systems’ impact on accounting processes. Business Process Management Journal, 10 (2), 234-247.

Srivastava, P., & Lognathan, M. S. (2016). Impact of accounting information for management decision making. IJAR, 2 (5), 171-174

Yadav, B., Kumar, A., & Bhatia, B. S. (2014). Concept of creative accounting and its different tools. International Journal of Management and Social Sciences Research (IJMSSR), 3(2), 66-74

Zabielavičienė, I. (2009). Methodological Aspects of Accounting and Analysis of Innovations. Ekonomika ir vadyba: aktualijos ir perspektyvos, (2), 130-142.

Zambon, S., & Del Bello, A. (2005). Towards a stakeholder responsible approach: the constructive role of reporting. Corporate Governance: The International Journal of Business in Society, 5(2), 130-141