1. Based on your research, assess how corporate leaders may make improper assumptions related to accounting information systems and the related information. Indicate the most negative potential impacts on business operations related to these assumptions. Provide support for your rationale.
An accounting information system (AIS) is a system that collects, records, stores, and processes data to produce information for decision makers (Romney & Steinbart, 2012). Accounting information systems has become one of the most popular tools in the business world. They have the potential of being inexpensive to slightly costly. However the benefits greatly outnumber the cost. Accounting ...view middle of the document...
Ackoff’s five common assumptions included: (1) management needs more information, (2) managers need the information they want, (3) giving managers the information they need improves their decision making, (4) more communication means better performance, and (5) managers need only to understand how to use an information system (Ackoff, 2012). Although these are assumptions are from December 1967, some are still prevalent today.
The improper assumptions related to accounting information systems that corporate leaders make can all be avoided with proper knowledge. One improper assumption is giving employees the information that they need and they will be fine. Also, I feel that two of Ackoff’s assumptions apply to corporate leaders today; more communication means better performance and managers need only to understand how to use an information system. All three of these are improper. An individual can have all the information, as well as, communication in the world and not benefit from. There is more to accounting information systems than just having the manual. In order for the system to be efficient and effective proper training is needed. The more training and refresher courses one receives on AIS the better the decision making process would be for corporate leaders.
Many negative potential impacts on business operations elated to these assumptions may arise. However, some are of greater importance than others. These negative impacts include a decrease in the financial reporting process integrity, a decrease in the financial reports quality, a loss of time and money for shareholders, and an improper reflection of the company’s true assets. Corporate leaders should remember that an organization’s AIS plays an important role in helping it adopt and maintain a strategic position. Therefore, training and refresher courses are of great importance.
2. Suggest three to four (3-4) ways in which organizational performance may be improved when information is properly managed within a business system. Provide support for your rationale.
According to BusinessDictionary.com, organizational performance is an analysis of a company’s performance as compared to goals and objectives (Business Dictionary, 2013). Although, in the business world many companies main goal and objective is to maximize profits. With this in mind, it is essential to understand a company’s organizational performance as it relates to business systems.
There are several ways in which organizational performance may be improved when information is properly managed within a business system. With the business world being so competitive, organizational improvement is a requirement. There are five guided principles being used to make outstanding improvements in organizational performance: benchmarks/measurements, leadership, employee involvement, process improvement, and customer focus (Potocki & Brocato, 1995). Although the article was written in 1995, these...