A Concept Paper
Isabelle Guillena
12- Rockefeller
scorekeeper records every point earned, while an accountant records and keeps track
game or a company is flourishing and not losing profit (Beticon, et al. 2016).
Information is defined to be “data that is accurate and timely, specific and organized for
a purpose” (Business Dictionary). In other words, it presents valuable data that is used
differently for certain reasons. An example of information is age, name, blood type or
hair color. These facts can be used for the purpose of specifying the identity of a person
information that the managers are accounting properly for the resources under their
control. This information helps the shareholders to evaluate the performance of the
managers. The performance measured by the accountant shows the extent to which the
economic resources of the business have grown or diminished during the year (Elliot B.
According to Codjia (2017), “Financial information is diverse and may have various facets,
depending on the reviewer and the objective of the study.” She implies that financial
information varies depending on the user and what they wish to do with it. A great
example is when an accountant prepares financial statements. There are four types:
Statement of Changes in Equity (SCE) and Statement of Cash Flows (SCF). All of these
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require different financial information. Example for SCF, it generally needs the state of
cash flow, or how much money goes in and out of the company. In the end of the
financial statement, the accountant looks if the company used its finances properly or
not.
Taking the previous example into consideration, to avoid the net losses or decrease in
resources, companies must base their decisions on the financial information provided
by the accountant. However, the accountant must make sure that data they give is
Business and Management (2016). It is also stated on page 7 of the book that “if an
accountant fails to capture useful financial information, then the decisions made by the
terms, if the information they’ve given is wrong, these will lead to bad things such as net
Decision making process requires information – financial and non-financial information as well
(Zager K. and Zager L. 2006). The role of financial information comes in when users
convert data from financial statements into usable information for business quality
important for users in the context of future decisions. For example, after finding out that
there is a net decrease after preparing the Statement of Cash Flows the owner must
consult the company accountant. The owner must take into consideration where most of
his cash goes so as to avoid the same result happening again. He found out that he
invested too much and did not gain most of the money back. He could either choose to
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invest into a new business, equipment, etc. or reduce. Business decisions such as this
was affected by financial information presented from the financial statements (Baker, et
al 2000)
information continues to be very useful in estimating the current business quality and
creating assumption for more successful business in the future. Moreover, it goes to
show that if a business does continue to flourish, this is because the accountant of the
accurate financial statements that is then used to come up with the best decisions.
In conclusion, the writer sees the role of financial information in the decision-making process
akin to a trustworthy friend. A person may have lots of friends to rely on, just like a
business owner relying on his marketing team. But that person will always come back
seeking the guidance of that one trustworthy individual who gives the best advices. In
the context of business, the owner will then seek the fortitude of the financial information
presented by his or her accountant before proceeding to make decisions for the good of
References
[1] Baker, R., & Wallage, P. (2000). The Future of Financial Reporting in Europe: Its
https://www.sciencedirect.com/science/article/pii/S0020706300000443.
[2] Beticon, J. L., Domingo, J. D., & Yabut, F. D. (2016). Fundamentals of Accountancy,
Business and Management 2(M. T. Manaligod, Ed.). Quezon City, Metro Manila:
Vibal Group.
information.html
[4] Elliot, B., & Elliot, J. (2007). Financial Accounting and Reporting (11th ed.). Essex:
http://www.businessdictionary.com/definition/information.html
[7] Zager, K., & Zager, L. (2006). The Role of Financial Information in Decision Making
from businessperspectives.org.