THE IMPLICATIONS OF FINANCIAL REPORTING DEVELOPMENT ON MANAGEMENT DECISIONS – REVIEW OF THE CURRENT SITUATION
THE IMPLICATIONS OF FINANCIAL REPORTING DEVELOPMENT ON MANAGEMENT DECISIONS – REVIEW OF THE CURRENT SITUATION

Summary/Abstract: This paper aims to review the management decision-making process and the developmentof financial reporting systems to show a possible correlation between them. The literaturereview delivers as the leading methodology an understanding of the decision-making processconcerning the traditional and cohesive approaches, which were dominant amongthe literature. Further, the evaluation and development of financial reporting show thatcompanies were likely to publish financial data after the Security Acts were launched inthe US from 1933; this and the income tax regulation resulted in a need of a commonaccounting policy. International Financial Reporting Standards (IFRS) became popularby the end of the 20th and beginning of the 21st century. According to empirical studies,companies may benefit from implementing IFRS. The paper's objective was met partlybecause no literature about the implications of reporting standards/systems on managementdecisions was found. This is an area with a clear gap worth further investigating.

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