The Role of Behavioral Accounting in Understanding Financial Decision-Making and Its Influence on Corporate Strategies

Behavioral accounting has emerged as a crucial field in understanding financial decision-making by integrating cognitive psychology with traditional accounting principles. This study examines how behavioral accounting influences corporate strategies, with a particular focus on mitigating cognitive biases, improving investment decisions, and enhancing financial transparency. The research employs a systematic literature review and statistical correlation analysis of secondary data from 2020 to 2024. Key findings reveal a strong correlation (r = 0.997) between behavioral accounting adoption and improvements in financial decision-making, with a regression analysis indicating that every 1% increase in behavioral accounting adoption leads to a 0.20% improvement in decision efficiency (β = 0.197, R² = 0.986, p < 0.001). Companies that implemented behavioral insights experienced an 8% improvement in decision-making, a 3.5% increase in return on investment (ROI), and a 6% reduction in financial miscalculations. The study concludes that behavioral accounting significantly enhances corporate governance, risk assessment, and financial forecasting, reinforcing its importance in modern financial strategies. Recommendations include integrating behavioral analytics into corporate finance tools, increasing managerial awareness of cognitive biases, and aligning behavioral accounting practices with regulatory frameworks. These findings contribute to advancing behavioral finance theory and its practical applications in corporate decision-making.

Keywords: Behavioral accounting, financial decision-making, corporate strategy, cognitive biases, investment efficiency.