In this chapter the researcher presents relevant literature
both theoretical and experimental
studies. a literature review is an account of what was published on the study
by others. the main purpose from this chapter is understand what contributions
others have do scientists in this subject on impact of accounting information
on management decision making in the organization. (Kothari, 2004).
Theoretical Literature Review
Accounting information means simplicity advertising what imagines
it’s a right and in terms of monetary units. it also shows the characteristics
of the organization must be taken in their exemplification in their financial
activities. it is also a mechanism to inform all interested parties of this
full information . therefore, it displays the financial position of the company
to users. (Willlams,
Accounting information is created through financial statements.
financial statement is structural representation for financial position and
financial performance of an entity. Meigs (2003)
The nature of administrative accounting is saving information which
connecting daily measures or procedures for managers strategic objectives of
the organization. In addition , this information should stabilized managers to
effectively participate in the integrity of an expanded organization of
customers, suppliers, traders and recycling in achieving strategic objectives.
In the same time, The scope of accounting information systems is to
report the results of operations using financial and non-financial measures.
The purpose is Assist the Organization in achieving its main strategic
objectives . It can also note the major differences between administrative
accounting information Is primarily for internal purposes and helps managers to
make decisions and financial accounting that provide information to parties
outside the organization ( Drury ,2000)
In the order to ensure the achievement of goals, the company and
planning and the control is necessary. So, adds the control process after
decision making process. he suggests how to control in it two steps: Comparing
actual and planned outcomes. An accountant
should be put performance reports which
provide Feedback by comparing results with plans. The managers must take
Consider deviations from plans. the managers see on the budget report and
performance. In this way, accounting provides help for managers, especially
through Appears Areas of problems and measuring actions. ( Macintosh (1995)
Stated that decisions can be grouped in short and long term
decisions. It is necessary to consider decisions from both sides.( Horngren et al (2002) . The short term is usually defined as one
year or until less. in short term decisions, the importance of time value of
money is low. these decisions are Basically based on current or today’s date. Short
term decisions can usually be changed easily instead of long term decisions.
long term decisions impact on Longer periods of time. result that, such
decisions request company resources for a longer period of time. such decisions
can impact future decisions and can have an impact on long term Possibilities.
Examples might be capital investments, such as the purchase of new machinery.
( Langley et al (1995) .
The role of financial and non-financial information in
decision-making was confirmed in
many definitions of accounting, Accounting can be considered as the process of identifying,
measuring and communicating economic information to allow informed judgments
and decisions by users of information ( Pandey (2008).
Also see the main function of accounting information as an aid in
the decision-making process, because the understanding of accounting
information contributes to better decisions. Hence, by reporting and collecting
accounting information, controllers can influence management’s decision-making
and lead them towards decisions that are in accordance with the organization’s
objectives.( Horngren, (2002).
decision maker decides what information inputs considers as relevant for
his/her decision. If the proportion of input of accounting information compared
to non-accounting information is more than zero, then the accounting data may
affect the decision. This proportion or the use of