The Role of Accounting Disclosure In Rationalizing Capital Budget Decisions: A Case Study

Abstract

This study seeks to identify the impact of accounting disclosure contained in financial statements on the rationalization of capital budget decisions, particularly investment decisions of investors, at a time when global variables are characterized by a situation of uncertainty, risk, and significant economic transformations in the investment market, which necessitated the disclosure of a set of accounting and financial information that leads to contingency planning. Achieving the desired goal of investment depends on the provision of this information and the extent of its validity and reliability, as well as the fact and integrity of its presentation in the financial statements because these decisions are of great importance to determine the future of companies and achieve their goals by maximizing the wealth of their owners are long-term decisions that extend for periods in an environment dominated by risk and uncertainty, it is clear that the provision of this information and the extent of its validity and reliability, as well as the fact and integrity of its presentation in The study question thus centers on how accounting transparency in financial information aids to rationalizing capital budget choices and making logical investment selections. The questionnaires were used to gather data and then analyzed using statistical software (SPSS). This questionnaire was given to two groups: an investor sample and academic instructors in the specialized area. The results indicate that there is no interest in the accounting information contained in the accounting disclosure, which may influence the rationalization of capital budget decisions represented by the sound investment decision, and therefore does not contribute to reducing the degree of risk associated with making these decisions.