4. Decision-Making Under Uncertainty

Literature on decision-making in management accounting typically assumes certainty (certain expectations); this was also assumed in the previous chapters. There are several reasons for this, particularly the following two: 1. On the one hand, the management accounting system mainly serves as an instrument of information for the support of short-term decisions whose consequences are considered only for a specific period of time (e.g. a month, quarter or year). Here, it can generally be assumed that within such a time frame, forecast uncertainties are negligible, and therefore certain expectations are realistic. 2. On the other hand, management accounting data can explain the fundamental principles that remain valid under uncertainty.