Why Is Accounting Important?
Making Corporate Decisions
Suppose a telecom company is looking to acquire a regional company to boost its presence in that region. There are several potential targets that fit the bill. How does this company determine which of these targets, if any, would make a good acquisition candidate?
Making Investment Decisions
A mutual fund is looking to invest in several diverse technology companies— Microsoft, Oracle, and Intel. How does this mutual fund determine in which of these targets it should make an investment?
Accounting Facilitates Corporate and Investment Decisions
A major part of corporate and investment decisions relies on analyzing all of the companies’ financial information in the above-mentioned cases. Accounting, the standard language by which such financial information can be assessed and compared, is fundamental to making these decisions.
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