Should Accountants Have a More Significant Role in Corporate Decision-Making

2153 words 9 pages
Should accountants have a more significant role in corporate decision-making?

In the changeable world with dynamic economic situation and fluid market information, corporate decision-making is becoming increasingly difficult for many enterprises. Under these circumstances, executives and managers are expected to be equipped with accurate, related and real-time information and live up to expectations of strong profits and growth (Royaee, Salehi and Aseman, 2012). Accounting and financial information, which is becoming easier to collect and access, is widely employed by decision makers as the main resource of information in the process of managerial decision making. In other words,the primary purpose of an accounting
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In the field of accounting, there are several standardized decision rules which decision makers are expected to conform. These rules are part of the principles and benchmarks on accounting which provide accountants and managers with proper guidance for a range of decision making activities. Generally, a decision rule has two prominent aspects. It is not only a presentation of a set of theoretical conditions but also an instruction about the movement to be taken into these conditions. For instance, an accountant would use the net present value (NPV) method to assess a potential investment. Under the decision rule of NPV, the managers should evaluate the distinction between the initial investment cost and the present value within an investment, and if the outcome is positive, the investment could be acceptable. Furthermore, a decision rule is usually prohibited from violating the law and acknowledged accounting regulations and standards which will protect the integrity of the business. Utilizing decision rules ensures that an educated guess can be advantageous in making decisions, and it also equips people with solid information when making decisions about management activities. On one hand, it gives managers an opportunity to examine the given plans more objectively. On the other hand, it cuts the risks of making a poor decision and, to some extent, guarantees the efficiency making a better one.

Finally, apart from the roles of

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