Information for Decision

Making
AE 117
Types of information needed for stakeholder
decision-making
Stakeholder Management
Information Systems
• Set of interrelated subsystems that work together to collect, process,
store, transform, and distribute information for planning, controlling,
and decision making.
• Input – raw data
• Process – manual or computerized
• Output – financial statements (reports) for economic decision makers
Primary Information Systems
• Financial IS
• Personnel IS
• Logistics IS
Secondary Information Systems
• Research and development IS
• Marketing IS
• Strategic planning and policy making IS
Management Information System
• A set of data gathering, analyzing, and reporting functions designed to
provide information necessary in properly discharging management
functions
• Attributes of an effective and efficient MIS
• Relevance
• Accuracy
• Conciseness
• Timeliness
• Completeness
• Flexibility
• Economy
Accounting Information System
• A subsystem of MIS, is an orderly arrangement of procedures,
personnel, written records, equipment, and devices used for the
systematic collection, processing, and reporting of financial and other
information essential to the official and effective conduct and
evaluation of business economic activities
• Objectives
• To facilitate management planning, control, and decision making
• To comply with legal and government requirements
• To protect the organization’s assets
Essential Elements of AIS
• Procedures or set of interrelated activities involving the originating,
processing, and reporting of data
• Records and reports necessary to gather, process, store and transmit
financial and other information
• Bookkeeping system
• Personnel directly involved in accounting work
• Equipment and devices used in the system to expedite the work,
provide controls and minimize if not totally prevent errors and fraud
Sources of Information
• Accounting as a source of information
• Accounting is the management information system of any organization and is
concerned with providing necessary information to the management, i.e it is
a source of information.
• In the account, every step involves either generation or processing accounting
information.
• It serves as a means as well as an end of providing information to all
stakeholders who need information to make a proper decision.
Data Aggregation
• Data aggregation is a key aspect of business intelligence, allowing
companies to analyze and draw critical insights
• The ability to bring together information from multiple accounts,
tools, and institutions in order to get a 360-degree finances and make
better decisions.
• Data can be aggregated from bank accounts, credit cards, brokerage
accounts, and more.
Data Integration
• Data integration is the practice of consolidating data from disparate
sources into a single dataset with the ultimate goal of providing users
with consistent access and delivery of data across the spectrum of
subjects and structure types, and to meet the information needs of all
applications and business processes.
 Information
• Anti-information • Assumptions
• Data • Disinformation
• Fact • Grey area
• Information asset • Information consumption
• Information economics • Information economy
• Information goods • Information industry
• Information needs • Information overload
• Information skills • Know-how
• Knowledge • Meta knowledge
• Misinformation • Primary source
• Sensory information • Situational awareness
• Specifications • Sticky information
• Storytelling • Unknowable
• Visual information
Characteristics of information
• Availability/ accessibility • Value of information
• Accuracy • Cost of information
• Reliability or objectivity
• Relevance/ appropriateness **Identify limitations
• Completeness
• Level of detail/ conciseness
• Presentation
• Timing
New Information Systems and Platforms
• Computer systems
• Supercomputers, mainframe computer, and minicomputer
• Microcomputers
• Personal digital assistants
• Capabilities of computer systems
• Speed
• Logical operations
• Memory
• Accuracy
• Reliability
Computer Systems
• Limitations
• Can only handle and communicate programmed information to the user
• Can’t prepare its own program or decide its own action. They just follow the
detailed instructions given to it
• Computers are not perfect. They can malfunction due to environmental,
technical, or human factors
• Advantages
• Reduction (elimination) of computational errors
• Reduction (elimination) of errors in processing routine transactions
• Faster generation of information needed by managers for timely decision
making
Role of management accountants in
influencing stakeholder decision-making
• Balancing stakeholder requirements and information
delivery
• Differing levels of information in the organization
• Importance of linking information to strategy
• Roles of the management accountant
Reasons to Update or Improve Information
Systems
• Increased productivity • Reduced costs
• Improved communication • Compatibility
• Greater efficiency • Reduced power usage
• Better security • Happier staff
• Enhancements • Engaged customers
• Vendor support • Business growth
• IT support • Streamlined trainings
• Current warranty
Key Questions in Program Evaluation
• 1. For what purposes is the evaluation being done, i.e., what do you want to be able to decide
as a result of the evaluation?
• 2. Who are the audiences for the information from the evaluation, e.g., customers, bankers,
funders, board, management, staff, customers, clients, etc.
• 3. What kinds of information are needed to make the decision you need to make and/or
enlighten your intended audiences, e.g., information to really understand the process of the
product or program (its inputs, activities and outputs), the customers or clients who
experience the product or program, strengths and weaknesses of the product or program,
benefits to customers or clients (outcomes), how the product or program failed and why, etc.
• 4. From what sources should the information be collected, e.g., employees, customers,
clients, groups of customers or clients and employees together, program documentation, etc.
• 5. How can that information be collected in a reasonable fashion, e.g., questionnaires,
interviews, examining documentation, observing customers or employees, conducting focus
groups among customers or employees, etc.
• 6. When is the information needed (so, by when must it be collected)?
• 7. What resources are available to collect the information?