The Characteristics Investment Decision Accounting Essay


- Introduction.

That the success of the investment project depends to a large extent on the integrity of investment decisions taken at the start of the life of the project, and this due to the fact that investment decisions are distinct from operational decisions with a set of characteristics that make them more dangerous. Decisions investment entails a set of burdens fixed is not easy to modify or refer them if it turns out not to the safety of these decisions are relatively large and cash flows associated with these investment projects realized over the long period of time, which calls for the need to take the problem of change time value of money into account, the investment decisions entail spend huge sums may require the project by borrowing huge sums or capital increase, which affects the financial structure of the facility, and the success of the project in the future investment decisions taken at the start of the project life, decision to invest is one of the important decisions and perhaps there is no decision in the business sector the most important and most dangerous of investment spending resolution.

1- investment decision.

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This section devoted researcher to identify the authors' views on the concept of investment decision. have multiplied the literature in this area, Ferry team of writers that investment decision "is one of the most important decisions and the seriousness of the project and because it contains a large link cannot be reversed only a great loss. (Weston & Brigham, p422).

Another group said, investment decision that: the resolution which requires a fair amount of money risked facility if she accepted an investment proposal. (Robert N, Anthony & Reece, p629).

Another searcher said, it is the link or the allocation amount is known of funds and resources facility and sacrifice at the present time based on curriculum prior to analysis division and comparison in order to achieve or get returns appropriate expected to occur over the time periods receptor relatively long.(Al- laidi p5).

Another group said, the decision to lead to additional fixed costs and once implemented irreversible, and management expects to implement profit but profit receptor uncertain occurrence.( Merett & Sykes, p11).

Another searchers said, Resolution, which involves the allocation of an undisclosed amount of money the facility at the moment over the long period of time in order to make a profit in the future, and he shall be subject to different degrees of risk and uncertainty. (Bierman,Jr&smidt,p83).

Another group said, Investment decision includes a link Mali huge long period of time in order to obtain a return in the future (Jones&Dudley,p186). also knows another project the new investment that create productive units new, which involve the commitment set of expenses and revenue for one or several specific intervals receptor vary depending on the type of investment.( Kaid,p51).

It is clear from the above definitions of multiple perspectives book about the concept and the importance of the decision to invest, but the researcher believes that these definitions, despite their multiplicity but mostly consistent in investment decision is one of the decision-investment is one of the decision of the huge funds risking their project in order to get returns appropriate expected they occur in a future time periods. According to these multiple concepts, the researcher believes that the concept of an investment decision include the following:

1 - investment decisions entail investing in funds set up investment projects generate new productive capacities.

2 - investment decisions result in investment funds in the expansion of existing projects and generate increase current production capacity of the project.

3 - investment decisions result in the replacement and renewal of existing assets and the purpose of these investment decisions is to maintain the current production capacities or increased.

Summarizes the researcher, however, that the decision to invest long-term can be defined as an administrative decision includes allocating huge funds to create productive capacities new or to increase production capacities current or maintain in order to obtain an adequate return extends for a long time over the life of the investment project.

- investment decision theories.

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The investment decision is type of decision , so the researcher choose to search for decision theory, that can find the theory about how to make decision, however any decision need information and need to approve this information to take a good decision.

Decision-making can be identified basic function of all the officials in various sectors in different views. Despite these differences, there is agreement among economists and statisticians, psychologists and political scientists, philosophers, social or be routed decision-making process of the target set and the alternatives available to choose the best that their(Even & Shankaranarayanan, 2007).

To achieve this goal, the process of decision making in general does not work in sequences because the decision makers should gather information simultaneously and developing alternatives (Witte, 1972). This concurs with Edwards (1954), that decision maker has a set of given alternatives and is aware of the consequences of each alternative in problem solving process.

The importance of information for decision making and processing of information about the available alternatives in order to weigh their relative merits and demerits has been highlighted in the literature. Decision making process follows a sequence of steps and adopts a set of criteria to collect information, design alternatives, and evaluate alternatives (Choo,2006; Edwards,1954).This can be done through interpretation, conversion and processing the information which are considered as dynamic social processes and subjected to interruptions and iterations.

The rationality in decision making process is for the decision maker to obtain adequate information which is of sufficient quality, quantity and accuracy (Mintzberg, 1973). While Simon (1977) calls for bounded rationality as the decision makers should interpret information and extract essential features to rationalize their decisions despite of the boundaries surrounded them.

This can be summarized as the rational man concept which presented as an economic man theory by Edwards (1954). Economic man is a person who is assumed to recognize all available information for him for different courses of actions. Based on this theory, the economic man tries to optimize his choice in his decisions.

Discussion proved that the researchers believe that the selection stage is the most important stage in the decision-making process. They try to choose a distinctive option or greater than among other options. As mentioned before Zhou (2006), if one option would be sane, that the selection is based on completeness of the information about the organization's goals and feasibility of alternatives, the possibility of the results of these alternatives and the benefits of these results to the organization.

This will lead to the theory of utility in decision-making, which calls for the selection of the alternative with the highest interest. Simon (1986) points out that the decision maker rationally to maximize the benefit to the environment certainty that the possibility of all the variables available to him. However, the possibilities depend on the availability of information.

Fundamentally, the assumption in utility theory is that the decision maker always needs high quality information to select from the substitutes for which the expected values of the utility are exploited. This high quality information heavily support operations to be uncomplicated and permits decision effectiveness (Even & Shankaranarayanan, 2007). Conversely, poor data quality will lead to organizational incompetence and resulted in losses to its principal (Redman, 1996).

Cooper (1983) laments that theories which found in economics, system analysis and decisions making often adopt the basic model of `input-process-output'. In the decision making process, the evidence supports that information quality play an important role as the main input for decision making process. In order to make significant decisions, organizations continuously search and evaluate information as this can reduce the uncertainty in decision making (Choo, 1996). This concurs with media richness theory that recognizes organization's need to process information in order to decrease the level of uncertainty and ambiguity in its decision surroundings (Daft & Lengel, 1986).

This is consistent with information theory developed by Shannon and his colleagues in 1940s. The theory suggested that information serves to reduce uncertainty. In general sense, the decision making approach depends on the nature of the situation, particularly on the time and the availability of information (Aftab, Cheung, Kim, Thakkar & Yeddanapudi, 2001).

Decisions are dependent on the amount and characteristics of information available and the expectations of those involved. Cyert & March (1992) highlighted that decision makers should be aware of the importance of information. Decision makers need to decide what type of information is important and how to access to it successfully. This is summarized by Simon (1977) in one concept as the bounded of rationality. He argued that there are limitations in the human rationality due to knowledge boundaries for the managers about all the preferences and end results of selection. Therefore, the rational choice depends on the information, conditions and the surroundings where the choice is to be made.

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On the other hand, contingency theory linked the completeness of information which is available to the decision makers with objectives clarity as the attributes of information differ based on the situations and objectives (Tarter & Wayne, 1998). In summary, contingency theory proposed that decision making models can be classified into classical, administrative, mixed scanning, incremental, garbage-can or political model. The characteristics of these models and the relationship between the information and different decision making situations are summarized in Table 2.1 below.

Decision-making Model

Model Description

Classical Model

Information is complete and the ends are clear, then optimizing is the appropriate decision strategy.

Administrative Model

Information is incomplete and ends are clear, then satisfying is the appropriate decision strategy.

Mixed Scanning Model

Information is incomplete and ends are tentative, then adaptive satisfying is the appropriate decision strategy.

Incremental Model

Information is incomplete and ends are tentative then, in the short-run, the incremental model of muddling through is an expedient choice to avoid negative consequences.

Garbage-Can Model

Information is incomplete and ends are vague, loosely-structured organizations then occasionally chance will link persisting problems with appropriate solutions.

Political Model

Politicized organizations, a variety of decision-making strategies are used by individuals to pursue personal ends.

Table : Decision Making Models

- Characteristics investment decision.

That the nature of the investment decisions they are connected on credit term, and usually need to spend large sums of money may be difficult to recover if not successful project, decisions investment represents a degree of risk to the life of the project, especially since the future dominated by an element of risk and uncertainty and a devoted researcher of this part of the study the characteristics and attributes that distinguish investment decisions and these properties may be classified as follows:

1 - characteristics associated with the temporal dimension.

2 - characteristics that relate to nature.

3 - characteristics associated with the funding structure.

- characteristics associated with the temporal dimension.

(A) - Linked investment decisions always on credit term, and in this say a book "that although the investment spending may be associated with a period of time and one precedes the process of obtaining the benefits of this investment but these returns and benefits associated with a subsequent period of time (Kamal Ibrahim p1), and as such, requires this need to take into account the change in the value factor that requires the need to take into account the factor of the change in the value of money when calculating the costs and returns of these investments. Interval between the time to spend money for investment decisions and time to obtain the return always be relatively longer, comparing the decisions of current expenditure in this regard says Hauge "that for after the time between the date of investment spending and the date of obtaining the benefits of tunnels major role and an important role in the investment decision, as the Onsite live with this decision for several years following future (D .C. Hauge p122 ).

It also emphasizes the Haynes "that there will be a time lag between the time of the investment expenditure and time to obtain returns" (Whaynes,Mote&poul,p26).

(B) - that the planning investment decisions is long-term planning extends to the long period of time, decision to invest is of extreme importance at the enterprise level, especially with continued technological advances in the modern era, which led to a major development in the means of production and marketing, which increases the difficulty of investment decision .

- characteristics that are related to nature and situations are:

(A) - usually include investment decisions elements of risk and uncertainty tied to those decisions in the future and therefore, the expected return is uncertain occurrence.

(B) - risk investment decision lies in the difficulty of irrevocable without substantial losses, so should be subject to the investment decision-making for more specialized scientific studies and to ensure its success properly in the future.

(C) - exposed to many investment decisions of the sales forecasting problems and how to estimate costs for a number of years to come in light of the cases of risk and uncertainty, and how the rate of return on investment and cost of capital rate. (Abdul Rahman Alyan,p112).

- characteristics that are related to the structure and funding are:

(A) - most of the investment decisions need to be huge amounts, which could affect the lives of the yield expected from the project usually runs for long periods of time, and this requires forecasting expected revenues and costs for a long time.

(B) includes investment decision to allocate as much of the economic resources currently available in order to create new productive capacities. Or an increase in production capacity or maintain current and hoping to get a return extends for a long period of time.

(C) result in the investment decision to dump part of the entity funds specialized in fixed assets for a long period of time, this may require the search for sources of financing borrowing. Investment decisions leading to afford the facility in case of expansion or replacement fixed costs consequent increase the size of a tie to a higher level than the usual level for a long period of time.

(D) lost making any investment decision on a specific project the entity to invest its funds in other investment alternatives could have been invested in other areas.

Researcher concludes from the foregoing that the nature of the investment decisions require large sums of money and is not expected Allen give any return only after a long time. The degree risks and uncertainties associated with large investment spending decisions, and commits these decisions established in most cases specialized assets for a long time and pass several years before coverage and cost recovery for these assets through the operations and current activity. And affect choice of fixed assets on the production capacity of the investment project and the nature of the products and the costs of current activity long-term impact. For all that has been invited several authors (Salem &Al Shafei p7,8,71), need attention and care of studying and planning investment activity.

2- Accounting information.

- accounting information quality overview.

The importance of the quality of information has been recognized at all organizational levels specially among the top management. Information quality is critical and key determinant for organizations' success. Brown (2004) highlighted that efficient manipulation of data to produce quality information is critical for successful management. Likewise, quality is a critical factor for achieving competitive advantages among organizations in the business environment (Drucker, 1985). Therefore, quality of information is the fundamental factor for making effective decisions specially in the banking sector (Jonas, Traut-Mattausch, Frey & Greenberg, 2008).

Quality in general is a subjective concept because it depends on the users' perception. Various definitions had been proposed to describe quality. For example, Juran (1988) claimed that a generalized quality can be perceived as `fitness for use.

Massaki (1997) argued that quality begins when the employees did not send refused or faulty information to the next course of action. In similar vein, Deming (1986) reiterated that quality should be an essential issue in managers' thinking not only as a tangible issue related to the products.

Quality is subjective concept and varies among users and uses of information. Generally, information quality is a measure of the value which the information provides to the users. Therefore, quality or value of information is reliant on the person who is going to use it (Strong et al., 1997). Hence, the concept of quality is relative, depending on the perceptions and needs of the users.

Similarly, Klien (2001) perceived information quality as a multi-dimensional concept with unpredictable characteristics depending on the theoretical perspective of the authors. This is supported by Nauman & Rolker (2000) who argued that the actual assessment of information quality dimensions is difficult because the concept of quality is subjective.

The importance of information quality has been highlighted by past studies. For example, Deloitte Development Consulting Group (2006) found information quality could influence business management and users as it is considered the core matter. Moreover, information quality is crucial for other than management field such as healthcare to enhance the efficiency of processes in these fields (Poston, Reynolds & Gillenson, 2007).

Fundamentally, there is no lack of data but users and investor are afflicted by the overload of data they received. Huge efforts and resources are needed to process these data. Hence, it is essential to develop a format for processing and identification of data and to transform them into information. The quality of information is subjective and the definition of quality differs based on the objective of their usage (Lillrank, 2003).

In agreement with Juran (1988), Wang & Strong (1996) perceived information quality as fit-for-use. This is because information that is considered fit for one use may not have adequate characteristics for another use (Klien, 2001; Strong et al., 1997; Tayi & Ballou, 1998). Fitness for use indicated to the degree which information match or exceed the need or the objective based on the user's point of view (Hurter, Ofner &Otto, 2009). This implied the different dimensions could determine the information quality which is one of the focuses of this study.

3- Qualitative characteristics of accounting information.

The (FASB) Concepts Statements are intended to serve the public interest by setting the objectives, qualitative characteristics, and other concepts that guide selection of economic phenomena to be recognized and measured for financial reporting and their display in financial statements or related means of communicating information to those who are interested. Concepts Statements guide the Board in developing sound accounting principles and provide the Board and its constituents with an understanding of the appropriate content and inherent limitations of financial reporting. Statement of Financial Accounting Concepts does not establish generally accepted accounting standards.

Accounting information is the compilation of a company's financial transactions. Companies present accounting information to internal and external business stakeholders for making decisions. Most companies must present accounting information according to national accounting standards; in the United States, generally accepted accounting principles (GAAP) represent the most authoritative accounting standards. GAAP requires accounting information to include qualitative characteristics on which business stakeholders can rely.(

Decision makers vary widely in the types of decisions they make,( Obaidat, 2007) how they make decisions, the information they already possess or can obtain from other resources, and their ability to process the information. For information to be useful there must be a link between decision makers and the decisions they make. This link, understand ability, is the quality of information that permits reasonably informed users to perceive its significance.

The general objective of financial reporting is to provide useful information to present and potential investors, creditors, and others to help them make investment,( Obaidat, 2007), credit, and other decisions. The purpose of this paper is to find out whether there is an existing gap concerning the importance of accounting information qualitative characteristics from investors and external auditors perspective as they represent the independent part responsible for the fairness of financial reports.

- Reliability effectiveness in invest decision.

Reliability is the quality of information that permits users to depend on it with confidence.

This means it is verifiable, has faithful representation, and is reasonably free of errors and bias.

Representational faithfulness refers to correspondence or agreement between a measure or description and the phenomenon that it purports to represent. That means the numbers and descriptions represent what really existed or happened. Verifiability refers to the ability, through consensus among measurers, to ensure that information represents what it purports to represent or that the chosen method of measurement has been used without error or bias.

Neutrality means that, in formulating or implementing standards, the primary concern should be the relevance and reliability of the information and the information cannot be selected to favour one set of decision makers over another.

The FASB's Conceptual Framework indicates that reliability, in conjunction with relevance, determines the usefulness of accounting information. The Conceptual Framework emphasizes two characteristics of reliability: representational faithfulness (the correspondence or agreement between a measure or description and the phenomenon it purports to represent[FASB 1980,63]), and verifiability (the ability through consensus among measurers to ensure that information represents what it purports to represent or that the chosen method of measurement has been used without error or bias [FASB 1980, glossary]).

The Conceptual Framework also notes that neutrality interacts with reliability. Neutrality

signifies that the processes of formulating and implementing accounting standards, and the resulting accounting information, should be free from bias toward a predetermined result (FASB 1980, 98-99). Finally, the Conceptual Framework emphasizes that reliability is a matter of degree, rather than an all-or-none concept (FASB 1980,59). However, accounting information must meet some threshold level of reliability to be useful to investors, creditors, and other financial statement users.

Despite the guidance in the Conceptual Framework,( Laureen A. Maines and James M. Wahlen 2006), reliability is elusive because it is difficult to directly observe or measure. As a result, researchers often use indirect approaches to study reliability. To clarify reliability as a construct and to distinguish among approaches for studying reliability, we develop a framework that portrays accounting information as a representation of economic constructs that are embodied in a firm's and banks commercial arrangements, transactions, and events that yield a firms and banks future cash flows.1 Our framework comprises the following three distinct relations, which we depict in Figure 1:

1. the relation between economic constructs arising from current-period commercial arrangements, transactions, and events and future-period cash flows (the economic relation).

2. the relation between current-period economic constructs and current-period accounting information representing and measuring those constructs (the accounting

relation) .



Current Period


Statements and

Notes3. the relation between current-period accounting information and future-period cash flows (the predictive relation, including users' expectation formation).

Future Cash Flows

(3b) User Expectation Formation

[A function of economic relevance, accounting relevance, accounting reliability, and users' expectations]

(3a) Predictive

(1) The





Accounting information: Current Period Financial Statements and Notes




Classifications and




The Set of



Economic Constructs

Selected Measurement


Economic Constructs:




Transactions, and


figure 1 . Accounting Horizons, December 2006.

Accounting information should be true and neutral to some extent. Meanwhile, it should be honest and true representation to the information. Reliability of information is necessary for those who have enough time and experience with respect to evaluating the trueness of the information content. For the accounting information to be reliable, it should enjoy the following properties:

Faithfull representation This means that accounting descriptions and numbers are related to their sources or to the events they represent or the events these numbers represent.

Neutrality It means avoiding choosing information in a way that results in preferring certain party of those concerned with accounting information on the expense of the others.

Accounting information should enjoy enough reliability, which involves paying more attention to the concepts of disclosure, objectivity and neutrality of information so that decision makers can trust such information considered as true and real representation of the company's balance sheet, and also represent the company's activities as best as possible. (Al- Nageeb, 1995).

Reliability is the second main property after relevance. It is defined as follows:

the property of information which confirms that such information is true and neutral to a logical extent and that the information truly represents what it claims to Reliability is also related to the integrity and dependability of information (Hanan, 2005).

- Relevance effectiveness in invest decision.

Relevance is known as the ability of the accounting information to change the decision of the information user and influence him. In other words, it is the ability of the information to create a difference in the decision making. Practically, this concept depends on the decision maker.( Ghazi F. Momani 2011).

To make a difference in the decision process, information must possess predictive value and/or feedback value. Generally, useful information will possess both qualities. (open,,2012) For example, if net income and its components confirm investor expectations about future cash-generating ability, then net income has feedback value for investors. This confirmation can also be useful in predicting future cash-generating ability as expectations are revised.

Relevance accounting information is capable of milking a difference in a decision helping users to form predictions about the outcomes of past, present, and future events or to confirm or correct prior expectations. Information can make a difference to decisions by improving decision makers' capacities to predict or by providing feedback on earlier expectations. Usually, information does both at once, because knowledge about the outcomes of actions already taken will generally improve decision makers' abilities to predict the results of similar future actions. Without a knowledge of the past, the basis for a prediction will usually be lacking. Without an interest in the future, knowledge of the past is sterile.( Statement of Financial Accounting Concepts No. 2).

In discussions of accounting criteria, relevance has usually been defined in the dictionary sense, as pertaining to or having a bearing on the matter in question.

That broad definition is satisfactory as far as it goes-information must, of course, be logically related to a decision in order to be relevant to it. Mistaken attempts to base decisions on logically unrelated information cannot convert irrelevant information into relevant information any more than ignoring relevant information makes ii irrelevant. However, the meaning of relevance or financial reporting needs to be made more explicit. Specifically, it is information's capacity to "make a difference" that identifies it as relevant to a decision. (Financial Accounting Standards Boards, No. 1204-001).

To be relevant to investors, creditors, and others for investment, credit. and similar decisions, accounting information must be capable of making a difference in a decision by helping Users to form predictions about the outcomes of past, present . and future events or to confirm or correct expectations.( Principles- Based Approach, to U.S, Standard Setting,2002).

The importance of property convenience, in that the decision which the user intends accounting information taken an important and dangerous whether that user is a manager or investor. Starting point to decide is the validity and relevance of the information available to him for a decision under study. In addition to the attention of the Director to determine the degree of liquidity enjoyed by the company, it also cares and focuses on the side of the current assets and current liabilities. The investor it focuses on profits earned by the company now and in the future. Therefore, what interests him is to know the profitability of the company in which he owns shares in or intend to invest in them.( Nicholas Dopuch1964).

But the plurality of users of financial reports, and the different goals makes the job of accountant included the production and ensure the appropriate information is not easy. However, the accountant plays a big role in the provision of accounting information guided by the ethical concepts of honesty in expression, justice, and truth, fairness, impartiality, and clarity, which are essential for his career.( Antoinette L.Cocker, 2005).

- Timeliness, that is. having information available lo decision makers before it loses its capacity to influence decisions, is an ancillary aspect of relevance. If information is not available when it is needed or becomes available so long after the reported events that it has no value for future action, it lacks relevance and is of little or no use.( Statement of Financial Accounting

Concepts No. 2). Timeliness alone cannot make information relevant, but a lack of timeliness can rob information of relevance is might otherwise have had.

- The ability to predict - and means to contain information on the predictive ability and thus enable users explore information or estimate future and image composition probability (estimated) with him. good information is that enables the user to configure the expectations of future results and improve the abilities and capacities in this area.( Nilsson& kand 2003).

- The ability to re-evaluation - and is intended to contain information on the property enables its user evaluation rebound or feedback or feedback through the information produced by the information , which contribute to the improvement and development of the quality of outputs (information) and its ability to adapt to changing environmental conditions constantly. So we can say that the appropriate information that enables decision makers to enhance current expectations or bring about change and evaluate the results of previous resolutions.(Fuglister, Meeting&rozen,1989).

- Corporate governance.

The phrase "corporate governance" is often used but yet lacks a precise definition (Low, 2000: 436). Most of the definitions focused on the structure and the function of the board of directors or the rights and prerogatives of any shareholders in boardroom decision making. The High Level Finance Committee Report on Corporate Governance also defined corporate governance from the same perspective. They defined corporate governance as "the process and structure used to direct and manage the business and affairs of the company towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholder value whilst taking into account the interest of other stakeholders" (Lee, 2003: 41).

From the definition, corporate governance mainly focuses on the process used to

direct and manage the business and affairs of the company with the objectives of striking a balance on:

· The attainment of the company's objectives.

· The alignment of corporate behavior to meet the expectations of shareholders.

· Accountability and good stewardship, taking into consideration the interests of shareholders, stakeholders, corporate participants and society at large.

- characteristics of corporate governance.

Corporate Governance of important topics on all institutions and regional and international organizations and after a series of financial crises different that occurred in many companies, especially in developed countries, such as financial meltdowns that have occurred in a number of East Asian countries and Latin America in 1997, and the crisis company Ernon which was involved in the marketing of electricity and natural gas in the United States of America in 2001, as well as the American company WorldCom crisis communications in 2002.(Bushmen&Smith,2001).

These collapses due mostly to accounting and administrative corruption in general and corruption in particular financial, bearing in mind that corruption accounting is due in one of the important aspects to the role of auditors and their emphasis on the health of the financial statements and the accounting information contained therein and that otherwise the truth. Moreover, as noted by some: that of the main reasons for the collapse of companies is the lack of management to good practice in monitoring and supervision and lack of experience and skill, as well as disruption of financing structures and the inability to generate cash flows sufficient internal to repay outstanding obligations on them, in addition to the lack of transparency and lack of interest in the application of principles investigating accounting disclosure and transparency beside not show accounting information to the financial reality of the situation.( Alkadry,p95).

Resulted in landslides lack of confidence in the various financial markets and scared away by the investors as well as the lack of confidence in the accounting and auditing offices due to the lack of confidence in the accounting information contained in the financial statements of different companies.( Hazem Hassan,2002).

can say that an important reason for the occurrence of the collapse of many economic units is not applied accounting principles and the lack of disclosure and transparency and do not show the data and factual information that reflect the financial situation of these economic units, has been reflected in a range of negative effects the most important loss of confidence in the information accounting, and thus lost this information the most important elements of excellence, namely quality.

- Qualitative characteristics of corporate governance.

Represents disclose good and transparency in the presentation of financial information and non-financial one of the principles and main pillars upon which corporate governance, so did not devoid of any report issued by the organization or body or a scientific study of the emphasis on the role of corporate governance in achieving transparency and disclosure private and that they are an effective way to achieve the interests of the parties various related, and represent one of the important indicators to judge the application of the system of governance or not, within the various economic. (Robert M,Bushman,Abbie&Smith,2003).

So the principles of corporate governance developed by the OECD and amended on April 12, 2004 believes that governance framework must include disclosure precise and timely of all significant matters relating to units of economic regarding their status and financial and operational performance and cash it and other aspects related to the members of the Board of Directors and management of high.(OECD,2004).

- Disclosure effectiveness in invest decision.

Definition of disclosure, many of the definitions, and following a number of these definitions, and has focused some researchers on the purpose of clarifying the financial information, it has touched many writers Machine concept of disclosure, and its importance in the decision-making Froth that dissemination of information necessary for the classes they need and so as to increase the effectiveness of the operations of the financial market, as the different groups need information to assess the degree of risk faced by the company to reach resolution through which you can achieve its objectives and that are commensurate with the degree of risk.( Abdullah,1995).

There are many definitions for the disclosure, some of which deals with disclosure in financial reports, in that it displayed important information to investors and other users a way that allows the prediction ability of the project to make profits in the future and its ability to repay its obligations, and Hendricksn said disclosure as "inform users of reports financial whatever helps them to make rational economic decisions whether or investment decisions granting loans or related to the identification of the tax burden for each company from institutional shareholders.(Hendriksen,1992).

Khalid Amin Abdullah said: The concept of accounting disclosure that is based on the need to show the financial statements of key information relative importance properly and accurately so as to serve all beneficiaries.(Abdullah,1995).

Choi said, linking the degree of disclosure and reducing the uncertainty of the beneficiaries through the dissemination of economic information related to the project, whether quantitative or qualitative information help the investor to take decisions and reduction of uncertainty has about future economic events.( Choi,1972).

Matar said, that the requirements for presentation of information in the financial statements in accordance with generally accepted accounting principles requires the availability of an appropriate disclosure on these lists and so on all material things (core) and a disclosure meant here closely associated with a content of the financial statements and the terminology used, and also the observations attached to them, and how much of the details make those lists informational value from the point of view of users of these lists.( Mattar,1990).

And there are a lot of definitions for disclosure and its importance some of which deals with disclosure in the financial reports of where he offered important information for investors from creditors and other beneficiaries a way that allows the prediction ability of the project to make profits in the future and its ability to repay its obligations and that the amount of information that must be disclosure does not depend on how much experience the reader, but the desired standards for disclosure (full disclosure - adequate disclosure - disclosure acceptable).( Hikmat al-Rawi,1995).

There are also connected between the degree of disclosure and reducing the uncertainty of the beneficiaries through the dissemination of economic information related to the project, whether the amount of information or other information that will help the investor to take decisions and reduce uncertainty has economic events receiving.( Abdullah,1995).

Institute of Chartered Accountants Americans also said and unequivocally to the need commitment reviewers rules and accounting principles generally accepted, and the recommendations and views of the Committee of Financial Accounting Standards (FASB), and the Commission on accounting principles (APB) and not express an opinion contrary to these rules and recommendations only If there is the need to require this.( AICPA,1997).

Therefore that the disclosure concept relative achieves a lot of advantages to investors and creditors and project management and other beneficiaries,(Abdel-Salam,1984), requires notification of decision makers economic important information, and aims to streamline decision-making process and take advantage of the efficient use of resources, which is reflected thereby to increase the degree welfare of the national economy in general.

But there who violates this opinion and stand against the disclosure of important information to financial reporting for fear of getting projects competition on this information or discover financial analysts for some advantages for the benefit of investors or claim unions some advantages for the benefit of workers, and has been possible to answer that on the grounds that information, which fears projects disclosed for fear of competition may be obtained from other sources outside of the project plus it may happen that lead to increase the degree of disclosure in financial reports to improve the degree of negotiation and bargaining with trade unions and staff.( Hendriksen,1992).

Quality disclosure refers to the strength and credibility of the information provided in the investor's perspective of management. (Millicent Zhang, Gino D'Anna, Ian Watson, and Marvin Wei 2008). Although investors have thinking their own perception of the information provided, but if the quality of disclosure is high in the notes have a good and positive impact on the selection of the investor (Hong Wei Xu and Ruef Martin, 2004). The investors are looking for information in the form of expectations, are studied, and then make a decision.

As has been the importance of issuing these forecasts for the firm and focused management.

Since the release of expectations is important for both investors and companies the concept of quality disclosure also equally important while analyzing expectations and investor's decision.

Have been discovered this line of inquiry by (Millicent Zhang, Gino D'Anna, Ian Watson, and Marvin Wei 2008), where the study concludes by saying that it cannot achieve high-quality detection by Investor Program effective relationship. They also extend to research the options and the investor by the fact that the concluding investors while making investment option does not rely only on the information provided which is also trying to verify the information provided to be more safety through various private sources as well. In addition to other factors also prove to provide credible information of power if you will have a direct impact in the mind of the investor. So it can easily say that the authorities provide information increase or decrease the quality of disclosure of the information provided. In this case a positive expectations if it will increase the confidence of investors and thus investor's decision to be more positive and if you do not this will have a negative impact on the decision of investors.

the researcher take some studies to discuss the disclosure and the relation with investor decision.

Qingyuan Li, Tielin Wang.

Study examined the relationship between the transparency of accounting disclosure affecting the quality of financial reporting and the efficiency of investment companies and Chinese study found that the accounting disclosure forms measure the degree of reaction of investors, because of their fully disclose openly to answer some questions that revolve in the minds of investors.

Dorota Dobija

Study also discussed the development of accounting in one of the European countries (Poland) for the purposes of increasing the efficiency of the capital market with a view to presenting financial statements refer to the declared objective profits financial reports and the study found that the presentation of models for accounting disclosure attached financial statements contribute to the improvement of the investment decision.

Different views on the concept and limits disclosure of information to be provided in the financial statements published where this difference mainly from differences in the interests of related parties and which is reflected on the corner, seen through each party about the problem look the party responsible for preparing the financial statements published for example,(Khalaf,2009), a management entity about problem disclosure may not converge necessarily look all these may not meet also look destinations control and supervision on the profession Audit Bureau and central banks and bodies and Exchange aggregates professional from here it becomes very difficult to provide a general concept and uniform disclosure ensures the level of disclosure that achieves each party of these parties desires full in this area.

- Transparency effectiveness in invest decision.