Modern managers need both financial and nonfinancial information that traditional GAAP-based accounting systems are incapable of providing.

Question

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Traditional GAAP-based accounting systems mainly focus on financial information such as revenues, expenses, and profits. However, in modern business environments, managers require nonfinancial information such as customer satisfaction level, employee productivity, and market trends to make informed decisions. Therefore, traditional accounting systems are insufficient to provide both financial and nonfinancial information required by modern managers.

Modern Managers Need Both Financial and Nonfinancial Information That Traditional