REDWOODS LIMITED

Budgets for Redwoods Limited



Budgets for Redwoods Limited

Introduction

Accounting is an important decision making tool for senior management of Redwood Limited. Accounting is an information system, as it captures, processes, stores and distributes vital information for sound decision-making in the company. The key role played by early accounting to control and organizes the various activities of the company in order to meet the situation where this is located, in a flexible, timely and useful to carry out the purposes you want to perform and thus meet the objectives (Romney, John, Steinbart, 2009). In this essay, I discuss the uses of accounting information for decision making and the constraints faced by the decision makers in getting help from such information.

Discussion

The accounting information systems and handled frequently in economic entities lead to measurement of benefits in monetary terms and for that reason have a limited ability to reflect the value and importance of intangibles in the organization. Intellectual capital is divided into human capital, structural capital and relational capital. Human capital refers to knowledge that people have and are useful for the company. Structural capital refers to organizational knowledge people have of the company. Relational capital refers to the value to a company that maintains relations with foreign customers and mainly because they sustain and generate new customers are key to its success. An information system is a tool fro providing information to leaders of different activities. It also investigates the foreseeable consequences of certain choices and to automate repetitive tasks.

For the decision makers, it is important to have the information for making a rational decision. For this decision making, financial planning is necessary. The requirements to be complied with financial planning for optimal results that are on the one hand, the prevention, which means company, must provide both the probable and improbable, either benefit or disadvantage to the company. Valid decisions are made on a consistent basis, when a decision making model is identified and utilized. Identifying the decision-making steps, having a working understanding of the components of each step, and the effective order of those steps, will provide a clearer path toward a sound and valid outcome to any situation. In making an individual decision, we might use the 7-steps of decision making, as defined by Rick Robert's Decision-Making Model. Those steps include: Identify the decision; Know yourself, Identify the options; Gather information and data: Evaluate options, Select one of the options, and Design a course of action to implement the decision.

From a decision making perspective, diversity in the composition of the group is proposed to increase the information available for problem solving and, in turn, enhance the ability of the group to generate correct or creative solutions to problems; that is, the emphasis is on an enhanced capability for problem solving. Although never explicitly investigated, it is reasonable to presume that the effect of increasing information availability has a curvilinear effect such that some initial diversity has more value than subsequent increments; that is, there is a ...