The article addresses the longstanding organizational issue on the use of financial accounting as the basis for guiding decision-making. Financial accounting is an imperative component of decision-making as conditioned by the likelihood that all the components of operations would be reviewed as conditioned by the detailed highlight of the past activities. A review of the history of performance of the organization is established when financial accounting tools are used to identify the consequences and implications that came as a result of using some options in the business setting formerly. There is a platform created in the context of overseeing the essential performance frameworks in the long term as conditioned by the evidence usable is projecting the likely outcomes to be deduced.
Some events related to organizational performance are often not perceptible from the daily activities, an implication that they may be thought to be valuable but are actually the onset of the challenges faced in the business setting. The qualitative and quantitative aspects of performance are; thus, only feasible to realize owing to the use of data that point out the degree of achievement from certain decisions. The tendency of making decisions relative to the status quo of the business and some predetermined belief systems in the organization would be potentially misleading (Socea, 2012). The outcome from the same would be a derailment of the primary objectivity and business focus. Financial accounting accords the quantitative evidence of the actual performance status of the organization so that the anticipated value would be precisely identified.
The problem is clearly stated as the use of financial accounting information in decision-making in the context of organizational performance. The merits of financial accounting are reviewed relative to the value that they would yield in the performance of an organization. The problem is practically important as conditioned by the improvements that would be realized in the course of business performance in view of the primary objectives to have been outlined from the outset. An understanding of the merits of financial accounting is the basis upon which the performance of an organization is advanced in light of the proper planning for the future using the data from the previous performance (Laudon & Laudon, 2015). The purpose of the study is to determine the role of financial accounting in business decision-making. The hypothesis of the study is identified as the success that would be realized by a realistic manager due to optimism in implementing the proposed ideas. The keywords identified point the study towards an overall direction of answering the question in the research problem. The words are decision, manager, decision-making, and financial accounting information.
Review of Literature
The sources used are pertinent to the study and essentially associate the performance of an organization with the nature of the decision-making practices in it. The review is broad and inclusive of all the essential components of the study. There is evidence given of the sustainability of operations as conditioned by the use of justification in the form of figures that designate the scope of performance in making decisions (Socea, 2012). Most of the sources used are recent, within five years before 2012 when the research was done. There is no evidence of bias as a result of the research layout being based on conducting a literature review on the identified topic. The sources used for the review meet the research criteria using the keywords as the lead in the search. Therefore, the findings would be reflective of the pre-determined expectations.
Design and Procedures
The research methodology is qualitative and uses the literature research as the basis for identifying the sought evidence on the value of using financial accounting information in decision-making. The study is original and uses credible databases in the search for peer-reviewed sources as the guidance to obtain the evidence needed to guide the scope of the study. Literature search from reputable databases is the tool used in amassing the needed evidence based on the research problem (Socea, 2012). The procedures were structured to reflect the retrieval of relevant studies that would match the focus. The layout was to conduct a search for all the studies that meet the study criteria using the keywords identified beforehand. There was no pilot study conducted, but the mere reliance on the theoretical frameworks to justify the need for the study. The independent variable is the use of financial accounting systems, and the dependent variable is decision-making in the organizational performance perspectives. The sampling was the identification of all the studies that meet the criteria of the key words.
Data Analysis and Presentation
The data collected was analyzed through observation to identify the action alternatives in the use of financial information systems to evaluate the consequences of applying various approaches to decision-making in different organizational fronts. The data is qualitative as a result of the determination of the trends in the performance of organizations relative to the review of the literature already conducted using the keywords as the guiding principle. The findings are in support of the study hypothesis and purpose in light of the determination that financial accounting is vital to the decisions that may be made in the context of organizational performance (Socea, 2012). Sufficient evidence is accorded to allow for justification of using particular systems as conditioned by the evidence presented from past activities. The potential weaknesses and problems have been highlighted as the likelihood of the shortfalls of the studies already conducted being reflected in the current study with the result that the errors would be carried over.
Conclusions and Implications
The conclusions of the study relate to the original purpose. Sufficient evidence has been gathered to allude to the value associated with using financial accounting to aid the decision-making process in organizations. The implications have been highlighted as the platform created to improve the performance index of organizations. An entity that uses financial accounting systems as the foundation for decision-making is bound to realize sustainable operations as a result of the potential that past mistakes that undermine objectivity would not be repeated. The results and conclusion are likely to affect the entire chain of organizational management due to the adjustments needed to embrace the new system of reviewing past performance in planning for the future (Libby, 2017). There is likely to be consistency in performance, a consequence that the initial value perceived to be inherent in the organization would be attainable. The significant recommendation made at the conclusion is the need to use financial accounting as the guiding principle to decision-making given the evidence in it to realize sustainability.
The study is vital as a tool of information to managers of organizations to embrace the use of financial information systems in decision-making relative to the success that would be realized. The past performance standards are reviewed to establish the mistakes that may have been made. The past success is also determinable. As a result, the future planning for performance is made to be in awe of the evidence presented. Mistakes are, therefore, avoidable with the result that the context of performance yields the much-anticipated business longevity. The article is dependable as a source of information. The literature reviewed expound on the topic to determine the success that has been exhibited owing to the use of financial information systems as the foundation for making decisions. The qualitative approach as ideal for revealing the sought evidence.