In: Accounting
Accounting systems generally produce information about numbers - certainly necessary for both decision-making and control. However, other information is also needed in both decision-making and control. Discuss the non-quantitative information that could prove useful to management, indicating the types of decisions and/or control issues where it would prove helpful.
Qualitative factors are decision outcomes that cannot be measured. Examples of qualitative factors are:
A manager should consider qualitative factors as part of his or her analysis of a decision. Depending on the manager and the level of investment involved, qualitative factors can be the deciding point in whether to engage in a certain activity. For example, if a large investment of funds is involved, the key decision factors are more likely to be quantitative, since the investing business has a great deal at stake in the decision. However, if the investment of funds is minor, the impact of qualitative factors could play a more important role in the decision.
From a branding perspective, qualitative factors can be particularly important. Proper branding requires high expenditure levels to establish and maintain an aura of quality, which a purely quantitative analysis might not justify.