Accounting for Decision Making and Control, First Edition

JEROLD L. ZIMMERMAN, Accounting for Decision Making and Control, First Edition (Chicago: Richard D. Irwin, Inc., 1995, pp. xi, 648).

The stated objective of this book is to provide an understanding of the strengths and limitations of an organization's accounting system when accounting data are used in decision making. It is organized around the concepts of opportunity cost and organization theory as the framework for decision making, and is very effective in achieving its objective of building a bridge between accounting and management decision making.

An example of this framework for decision making is in the coverage of ROI and residual income. Coverage begins with a discussion of how each responsibility center, or agent, is assigned a set of decision rights.

The performance measurement system is then designed to measure the results of those decision rights as implemented by the various agents. The ROI and residual income calculations are covered, but the calculations are...