Comparative Analysis: Value of Accounting Information in Organizations

This report presents a comparative analysis of the value of accounting information in both profit and non-profit organizations. The analysis draws from several research articles that explore the role of accounting information systems in financial decision-making, risk management, organizational communication, and investment decisions. The report summarizes key themes, including the significance of accounting information for managerial decisions, the importance of accurate data, and the differences in how accounting information is used across various organizational types. The findings highlight the risks associated with computerized accounting systems and the impact of communication strategies. The report concludes by acknowledging study limitations and suggesting avenues for future research, emphasizing the need for managers to consider organizational-specific factors when applying the discussed theories. The report also emphasizes the role of accounting information in capital budgeting decisions and the implications for management, offering insights into the strategic use of accounting data.

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A Comparative Analysis of
The value of
The Accounting Information
Prepared By
Student Name:
Date:

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Executive Summary
This article is written with the purpose to assist the procedure of the identification of the
relevant sources of research and review the theoretical concepts on the information system
for both the profit and non-profit organizations having the real world business implication. In
this article an attempt has been made to make a comparative analysis of the value of the
accounting information in not for profit organization and for profit organization based on
different articles published in different journals which have been identified through the
intensive online search.

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Table of Contents
Introduction...........................................................................................................................................4
Discussion and Analysis.........................................................................................................................4
Brief Summary of the theories and progression in the field..............................................................4
Common Themes amongst the various studies conducted...............................................................5
Differences amongst the various studies conducted.........................................................................6
Management implication..................................................................................................................6
Conclusion - Study limitation and future reference...............................................................................6
References.............................................................................................................................................7

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Introduction
The value of the accounting information is relevant and critical irrespective of the nature of
the organization, (i.e., Whether it has been formed with the purpose to earn profit or not) but
still there are various aspects which are to be analyzed in detail so as to bring into the notice
the thin line of differences lying between them (Arnott, Lizama, & Song, 2017). In order to
assist the process of this analysis the four different articles, i.e. Bansah, EA (2018), ‘The
threats of using computerized accounting information systems in the banking industry’,
Accounting & Management Information Systems / Contabilitate si Informatica de Gestiune,
vol. 17, no. (3), pp.440–461 Jiwon Suh1, J. S. ed., Harrington, J. and Goodman, D. (2018)
‘Understanding the Link Between Organizational Communication and Innovation: An
Examination of Public, Non-profit, and For-Profit Organizations in South Korea’, Public
Personnel Management, 47(2),pp.217–244, Stearman, S. W. 1,. (1995) ‘The Not-for-Profits
Toolbox’, Journal of Accountancy, 180(3), pp.50–62, Kneževi? S., Stankovi?, A. and
Tepavac, R. (2012) ‘Accounting Information System as a Platform for Business and Financial
Decision-Making in the Company’, Management (1820-0222), (65), pp. 63–69. doi:
10.7595/management.fon.2012.0033. ALIEID, E. E. M. (2016) ‘The Role of Accounting
Information Systems in Making Investment Decisions’, Internal accounting & Risk
Management, 11(2), pp. 233–242 have been accessed through the process of extensive online
search. There are major aspects discussed in the following sections in relation to these articles
by way of summarised description and development of these theories. Some common and
different themes were also noticed in these articles along with its managerial implications and
finally the report focuses the attention on the study limitation and future research direction
proposed in these articles.
Discussion and Analysis
Brief Summary of the theories and progression in the field
Bansah, EA (2018), ‘The threats of using computerized accounting information systems in
the banking industry’ Accounting & Management Information Systems
In this article the study is aimed at investigating the various sources along with causes due to
which the presence of susceptible vulnerabilities have been noticed by the financial firms
using computer assisted information system together with the measures available to mitigate
the impact of these risks (Alexander, 2016). The major sources for such risks as identified are
the threats from the outsiders, virus attacks, power failures etc, The main causes for the same
as described were weakness in the internal control system, unauthorized access and copying
of data, lack of the system to take the frequent back up along with infrequent system software
updates and lack of the appropriate policy for the system usage. But there is lack of measures
noticed for the prevention of these risks, hence it is better to give proper attention before their
occurrence.
Jiwon Suh1, J. S. ed., Harrington, J. and Goodman, D. (2018) ‘Understanding the Link
between Organizational Communication and Innovation: An Examination of Public, Non
profit, and For-Profit Organizations in South Korea’, Public Personnel Management (Choy,
2018).
This article focusses on the media richness theory which talks about the fact that positive
communication can have a positive impact so as to introduce innovation in the organizations

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of the profit oriented approach. Similarly in case of the not for profit organization it is the
meeting with the executive director and number of communications channels used by it that
brings about the innovation, but nothing has been noticed in case of the effect of such
communication for the public sector undertaking.
Stearman, S. W. 1, (1995) ‘The Not-for-Profits Toolbox’, Journal of Accountancy, 180(3),
pp.50–62, Kneževi? S., Stankovi?, A. and Tepavac, R. (2012) ‘Accounting Information
System as a Platform for Business and Financial Decision-Making in the Company’
As per this article at first the categorisation of the organisations information system as
qualitative and quantitative has been made (Visinescu, Jones, & Sidorova, 2017). The second
thing is the subcategorization of the quantitative information as financial and non financial
information has been made. In the financial information the relevance of the accounting
information generated through the basis of the double entry book keeping system which are
relevant both for the internal and external users of such financial information has been
considered. Further it prescribes the qualitative characteristics of such accounting or financial
information system like availability, reliability etc. so as to assist the managers to take
significant business and financial decisions based on such accounting information system.
E. E. M ALIEID, (2016) The Role of Accounting Information Systems in Making Investment
Decisions’, internal accounting & Risk Management
As per this article the use of the accounting information or its relevance while making the
investment or capital budgeting information has been discussed. It clearly says that though
the accounting information has the highest significance in the day to day administrative
decision, but the same is not applicable in case of capital budgeting decision (Farmer, 2018).
As in capital budgeting decision various tools such as average rate of return, net present
value, internal rate of return and payback period etc. are used wherein only the average rate
of return where the accounting information is of utmost importance and in case of other tools
it is simply used either to predict the cash flow from operating activity or the calculation of
the weighted average cost of capital.
Common Themes amongst the various studies conducted
The major common themes noticed in all of these given articles are summarized hereunder:
1. All of the articles uniformly accept that it is the accounting information system which
has its significant influence on the successful working of any organization.
2. In all of the above articles the accounting information system has been recognized as
significant in making decisions by the managers (Alieid, 2016).
3. Though the qualitative information has its own relevance but more important is the
quantitative accounting information so as to assist the decision making process.
4. All of the above articles emphasizes the need to maintain the accurate accounting
information (Heminway, 2017).
5. Without the accounting information, no matter which types of tools or measures are
available in the hands of the managers it can never assist to make significant
managerial decision.

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Differences amongst the various studies conducted
The major differences amongst these articles are summarized as follows.
1. The first article is primarily focused to reveal the various sources and causes of risks
associated with the use of computerized based accounting system primarily in the
banking industry. It further recognizes that the best measure to prevent the probability
of these risks is to pay proper attention before their occurrence.
2. The second article talks about the impact or the influence of the organizational
communication depending on the nature of the various organization which may either
be profit oriented or may be not for profit organization and the public sector
undertaking organization too. It further talks about the means of communication or
the ways to be communicated within or outside the organization (Dichev, 2017).
3. The third article which recognizes the relevance of the accounting information system
both for the internal and external users of such information and the qualitative
characteristics which it should possess in order to assist the decision making for the
business and financial decisions (Jiwon Suh1, 2018).
4. The fourth article talks about the use of accounting information system while making
the significant investment decision .It is because the various financial tools that are
used while making these capital budgeting decision and the use of the accounting
information along with these tools of analysis differ depending on the use of the
specific tool or techniques of the capital budgeting (Kew & Stredwick, 2017).
Management implication
The management implication of the above study and findings are mentioned hereunder:
1. The first article clearly specifies that the use of computer based accounting system
has imposed a large amount of risks associated with the preparation and
presentation of the accounting information system which demands the careful
dealing of these risks with the appropriate measures.
2. The second theory suggests the managers that it is at first they need to see the
accurate nature of the organization before the use of various means of
communication .It is because as the nature of organization varies so as the means
of communication too demand the different means of communication (Werner,
2017).
3. The third article says that in order to make the business and financial decision it is
only the quantitative information in form of Accounting information that is to be
considered, hence they should focus on this aspect only.
4. The fourth article tells the managers that it is the technique they choose to analyze
the capital budgeting decision that finally decides whether the particular
accounting information shall be relevant or not (Linden & Freeman, 2017).
Conclusion - Study limitation and future reference
Each of the above articles has been drafted on the basis of the significant case study made by
the concerned research scholar and appropriate care has been taken by them while reaching to
the final conclusion. Hence the only limitation underlining the above studies is that before

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applying the theory prescribed through these article, the manager needs to make the careful
analysis of each and every aspect of his own organization, as even though the final
conclusion may be same, but there are limitations associated with these case studies too,
hence it is suggested to consider these limitations as well.
References
Alexander, F. (2016). The Changing Face of Accountability. The Journal of Higher Education, 71(4),
411-431.
Alieid, E. E. (2016). The Role of Accounting Information Systems in Making Investment Decisions.
Internal Auditing & Risk Management, 11(2), 233-242.
Arnott, D., Lizama, F., & Song, Y. (2017). Patterns of business intelligence systems use in
organizations. Decision Support Systems, 97, 58-68.
Choy, Y. K. (2018). Cost-benefit Analysis, Values, Wellbeing and Ethics: An Indigenous Worldview
Analysis. Ecological Economics, 145. Retrieved from
https://doi.org/10.1016/j.ecolecon.2017.08.005
Dichev, I. (2017). On the conceptual foundations of financial reporting. Accounting and Business
Research, 47(6), 617-632. doi:https://doi.org/10.1080/00014788.2017.1299620
Farmer, Y. (2018). Ethical Decision Making and Reputation Management in Public Relations. Journal
of Media Ethics, 33(1), 1-12.
Heminway, J. (2017). Shareholder Wealth Maximization as a Function of Statutes, Decisional Law,
and Organic Documents. SSRN, 1-35.
Jiwon Suh1, J. S. (2018). ‘Understanding the Link Between Organizational Communication and
Innovation: An Examination of Public, Nonprofit, and For-Profit Organizations in South
Korea. Public Personnel Management, 47(2), 217-244.
Kew, J., & Stredwick, J. (2017). Business Environment: Managing in a Strategic Context (second ed.).
London: Chartered Institute of Personnel and Development.
Linden, B., & Freeman, R. (2017). Profit and Other Values: Thick Evaluation in Decision Making.
Business Ethics Quarterly, 27(3), 353-379. Retrieved from
https://doi.org/10.1017/beq.2017.1
Visinescu, L., Jones, M., & Sidorova, A. (2017). Improving Decision Quality: The Role of Business
Intelligence. Journal of Computer Information Systems, 57(1), 58-66.
Werner, M. (2017). Financial process mining - Accounting data structure dependent control flow
inference. International Journal of Accounting Information Systems, 25(1), 57-80.

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