Accounting information and the quality of financial managerial decisions

Accounting information is an ingredient in most, if not all, financial managerial decisions. In developed economies, these decisions are worth billions of dollars each year. In some cases, the decisions are lacking in quality. Consequently, if research can improve decision making through improved information, society will benefit. This paper argues that, in management decision-making, accounting information affects decision quality via three intervening variables: uncertainty, information load and data load. The paper discusses the effects accounting information has on these variables, and the effects they, in turn, have on decision quality. The paper goes on to discuss the future research that is needed in the area before the current knowledge can be applied in practice with any precision.