Alternative Methods of Accounting and Decision Making: A Psycho-Linguistical Analysis.

Abstract The article examines the impact of the apparent differences attributable to the alternative accounting methods in which the reported data such as income and inventories are measured, as opposed to real differences, on the decision making by the accountants. Accountants are now showing an increasing interest in understanding the relationship between accounting and decision making. Management, creditors and stockholders, both present and prospective, are the major users of accounting data. Management uses the accounting data for planning and control decisions in so far as the accounting data reflect the operating results and the financial position of the business organization. Similarly the stockholders and the creditors want to make decisions regarding their investment in the business organization. In decision making, a principal input means a decision input upon which the decision maker ultimately wants to base his decision. A surrogated input is a decision input upon which the decision maker bases his decision insofar as the surrogate reflects a principal.