The Role of Accounting Information in Corporate Decision-Making: A Review of Literature

Abstract

Accounting information plays a crucial role in corporate decision-making processes, serving as a key input for managerial decision-making, financial analysis, and performance evaluation. This review of literature explores the multifaceted role of accounting information in guiding corporate decision-making across various contexts and industries. Drawing on a wide range of scholarly research, the paper examines how accounting information is utilized by managers, investors, creditors, and other stakeholders to assess the financial health, profitability, and risk profile of companies. Additionally, it delves into the different accounting frameworks and methodologies used to measure and report financial performance, highlighting their implications for decision-making. Furthermore, the review discusses the challenges and limitations associated with the use of accounting information in decision-making, including issues related to data reliability, measurement biases, and information asymmetry. Overall, the paper underscores the importance of accounting information as a critical tool for informed decision-making in corporate settings, while also acknowledging the complexities and nuances involved in its interpretation and application.