The Role of Financial Accounting Information in an Entity

The paper aims to present ways to streamline and remedy the quality of financial accounting communication offered to managers. Management decisions on quantity, quality and timing of information depends on the cost and benefits of producing and disseminating accounting information. All differences in the reporting of financial and non-financial information would be generated by the gaps between the benefits and costs of the voluntary provision of information. It is often the case that entities provide more information than required by their managers, being convinced that the benefits outweigh the costs of production and financial accounting reporting. The efficiency of the decisionmaking process is directly proportional to the nature, quality, periodicity and volume of information that the decision-maker has at his disposal. The financial statements in particular and the financial accounting reports in general are documents that underlie a diagnosis of the financial position and profitability of the entity, they allow the determination to confirm and refute the strengths and weaknesses in the performance of all functions of the entity.