Describe the decision-model approach to accounting research and identify the two major decisions embraced by this approach.
What will be an ideal response?
ANSWER:
The decision-model approach to research asks what information is needed by decision-makers. It does not address what information users want but rather concentrates on what information is useful for a particular decision. Its orientation is normative and deductive. The two major decisions embraced by this approach are: (1) enabling the user to better predict future cash flows; and (2) analyzing the efficiency and effectiveness of management (stewardship) as well as subcategories of both these major types of decisions.
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