Critical review of the role of accounting in the decision-making process

Abstract

PurposeThis study aims to investigate the accounting role’s deficiencies in managers’ decision-making processes.Design/methodology/approachThe current research applies a critical review method, which along with a deductive approach – based on a library review of existing sources – examines the underlying causes for the deficiencies of accounting role in the decision-making process of managers; moreover, based on the results obtained, the current study proposes a structural model to explain the issue.FindingsThe results exhibit the inadequacies of the accounting role in the decision-making process of managers into three sections: “dilution of financial reporting information content,” “malpractice of accounting information providers” and “managers’ unwillingness to use accounting information.”Practical implicationsThis research provides a new perspective on critical accounting studies for the accounting profession, policymakers and managers and invites them to examine the roles of accounting information in more depth and breadth.Originality/valueThis article is the first study that critically expounds upon the literature on the deficiencies of accounting role in the decision-making process of managers and presents these deficiencies in the form of a structural model from three different perspectives.