Accounting Will Only Be Relevant in Decision Making If the Information It Provides Relates to the Past and It Includes Future Prediction
Introduction
Accounting, which is also known as accountancy is a “language of business”. It provides financial information about one’s business to the internal and external users such as managers, investors, creditors and etc. Users need information to help in planning, decision-making, evaluating and controlling their business or investment. The information is generally in the form of financial statement where they can show where the money is spent, helps to assess performance over a period and helps to identity problems and opportunities. Users also use the financial information to make resource allocation decisions between and within companies, organizations and public agencies. Accounting involves the process of recording, verifying, and reporting of the value of assets, liabilities, income, and expenses in the books of account. Sub-classification of accounting consists of financial accounting and reporting, management accounting, auditing and taxation.
Decision making is the process of choosing between alternative courses of action using cognitive processes. Accounting systems can aid our decision making by providing information relevant to the decision and to the decision makers. They can aid us in allocating environmental resources. In order to design an effective accounting system for this problem, the process of decision making must be understand. Accounting systems also provide a check for the validity of that information through the process of auditing and accountability.
In this report, we are going to relate Air Asia Berhad with the discussion we have selected. We are using the annual report of 2007 and 2008 to make a comparison related with the topic.
Content
Accounting will be only relevant in decision making when the information provided relates to the past, as well as important for future decision making. Financial documents that are created according to Generally Accepted Accounting Principles (GAAP) to ensure that the information is
Accounting, which is also known as accountancy is a “language of business”. It provides financial information about one’s business to the internal and external users such as managers, investors, creditors and etc. Users need information to help in planning, decision-making, evaluating and controlling their business or investment. The information is generally in the form of financial statement where they can show where the money is spent, helps to assess performance over a period and helps to identity problems and opportunities. Users also use the financial information to make resource allocation decisions between and within companies, organizations and public agencies. Accounting involves the process of recording, verifying, and reporting of the value of assets, liabilities, income, and expenses in the books of account. Sub-classification of accounting consists of financial accounting and reporting, management accounting, auditing and taxation.
Decision making is the process of choosing between alternative courses of action using cognitive processes. Accounting systems can aid our decision making by providing information relevant to the decision and to the decision makers. They can aid us in allocating environmental resources. In order to design an effective accounting system for this problem, the process of decision making must be understand. Accounting systems also provide a check for the validity of that information through the process of auditing and accountability.
In this report, we are going to relate Air Asia Berhad with the discussion we have selected. We are using the annual report of 2007 and 2008 to make a comparison related with the topic.
Content
Accounting will be only relevant in decision making when the information provided relates to the past, as well as important for future decision making. Financial documents that are created according to Generally Accepted Accounting Principles (GAAP) to ensure that the information is