Question Tag: Information Quality

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  • 15 Marks

PM – Nov 2015 – L2 – Q7 – Performance Measurement Systems

Evaluate weaknesses in Stuck Ltd’s MIS and suggest improvements for enhanced strategic decision-making.

Stuck Ltd manufactures industrial glues and solvents in a single large factory. Approximately 400 different inputs are used to produce the 35 specialist outputs, which range from ultra-strong glues used in aircraft manufacture to high-impact adhesives for construction sites.

Two years ago, with the company only just breaking even, the directors recognized the need for more information to control the business. To assist them with their strategic control, they established a Management Information System (MIS). This system is now operational but provides only the following limited information to the directors via their networked computer system:

  1. A summary business plan for this and the next two years. The plan includes details of expected future incomes and expenditure on existing product lines. It was produced by a new member of the accounting department without reference to past production data.
  2. Inventory balances on individual items of raw materials, finished goods, etc. This report is highly detailed and comprises 80% of the output from the MIS itself.
  3. A summary of changes in total demand for glues and solvents in the market over the last five years. This information is presented as a numerical summary in six different sections, with each section taking up one computer screen, so only one section can be viewed at a time.

Required:

(a) Comment on the weaknesses in the information currently being provided to the directors of the company. (9 Marks)

(b) Suggest how the information may be improved, with particular reference to other outputs the MIS might usefully provide to the directors. (6 Marks)

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  • 15 Marks

PM – May 2019 – L2 – Q6 – Strategic Management Accounting

Discusses the essential qualities needed for management accounting information to be useful for decision-making.

“The purpose of management accounting is to provide relevant and reliable information so that managers can make well-informed decisions. The value of management accounting, therefore, depends on the quality of the information provided and whether this information helps managers to make better decisions.” Therefore, before management accounting information can be useful to managers, it must possess some qualities.

Required:
Discuss the essential qualities of good management accounting information.

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  • 20 Marks

PM – Mar/Jul 2020 – L2 – Q6 – Performance Measurement Systems

Explains types of information required by different management levels and the qualities of good information.

Performance management incorporates activities that aim to ensure that goals are consistently met in an effective and efficient manner. In order to achieve this, management requires reliable systems to support them in decision making.

Required:
Explain, with examples, the common types of information that are required by various levels of management for effective decision making, stating the qualities needed to classify such information as good. (20 marks)

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  • 1 Marks

MI – May 2015 – L1 – SA – Q10 – Introduction to Cost Accounting

Identify the factor that does not contribute to good cost accounting information.

Which of the following factors may NOT contribute to a good cost accounting information for management use?
A. Timeliness
B. Relevance
C. Accuracy
D. Efficiency
E. Clarity

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  • 3 Marks

MA – May 2017 – L2 – Q1b – Other aspects of performance measurement

Explain three qualities of management accounting information in terms of their importance for decision making.

While managers can use different leadership styles, they all share the task of utilizing information to make decisions that achieve organizational goals. Accounting information for decision making will differ in terms of its details depending on the user.

Required:

Explain THREE qualities of Management Accounting information. (3 marks)

Answer:

The qualities of Management Accounting information include:

  1. Relevance:
    Information should be timely and bear on the decision-making process by possessing predictive or confirmatory (feedback) value.
  2. Faithful Representation:
    Information must be truthful, complete, neutral, and free from error.
  3. Comparability:
    Even though different companies may use different accounting methods, there is still sufficient basis for valid comparison.

Additional points from the original answer but not required since only three qualities were asked:

  • Consistency:
    Deviations in measured outcomes from period to period should be the result of deviations in underlying performance (not accounting quirks).
  • Verifiability:
    Different knowledgeable and independent observers reach similar conclusions.
  • Timeliness:
    Information should be available in sufficient time to be capable of influencing decisions.
  • Understandability:
    Information should be clear and concise to those with reasonable business knowledge.

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  • 10 Marks

BMIS – Mar 2023 – L1 – Q5a – Introduction to information technology and information systems

Differentiates between data and information and explains essential qualities of information.

One of the most important resources Management of an organization requires in order to make meaningful decisions is credible information which has often been wrongly referred to as data.

Required:
i) Distinguish between data and information.
(2 marks)
ii) Explain FOUR (4) essential qualities of information.
(8 marks)

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  • 4 Marks

BMIS – May 2017 – L1 – Q1c – Introduction to information technology and information systems

Describe four qualities of useful information.

c) To be useful, information requires a number of specific qualities. Information systems should therefore aim to produce information that possesses these qualities.

Required:
Describe FOUR qualities of a useful information.

(4 marks)

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  • 15 Marks

PM – Nov 2015 – L2 – Q7 – Performance Measurement Systems

Evaluate weaknesses in Stuck Ltd’s MIS and suggest improvements for enhanced strategic decision-making.

Stuck Ltd manufactures industrial glues and solvents in a single large factory. Approximately 400 different inputs are used to produce the 35 specialist outputs, which range from ultra-strong glues used in aircraft manufacture to high-impact adhesives for construction sites.

Two years ago, with the company only just breaking even, the directors recognized the need for more information to control the business. To assist them with their strategic control, they established a Management Information System (MIS). This system is now operational but provides only the following limited information to the directors via their networked computer system:

  1. A summary business plan for this and the next two years. The plan includes details of expected future incomes and expenditure on existing product lines. It was produced by a new member of the accounting department without reference to past production data.
  2. Inventory balances on individual items of raw materials, finished goods, etc. This report is highly detailed and comprises 80% of the output from the MIS itself.
  3. A summary of changes in total demand for glues and solvents in the market over the last five years. This information is presented as a numerical summary in six different sections, with each section taking up one computer screen, so only one section can be viewed at a time.

Required:

(a) Comment on the weaknesses in the information currently being provided to the directors of the company. (9 Marks)

(b) Suggest how the information may be improved, with particular reference to other outputs the MIS might usefully provide to the directors. (6 Marks)

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  • 15 Marks

PM – May 2019 – L2 – Q6 – Strategic Management Accounting

Discusses the essential qualities needed for management accounting information to be useful for decision-making.

“The purpose of management accounting is to provide relevant and reliable information so that managers can make well-informed decisions. The value of management accounting, therefore, depends on the quality of the information provided and whether this information helps managers to make better decisions.” Therefore, before management accounting information can be useful to managers, it must possess some qualities.

Required:
Discuss the essential qualities of good management accounting information.

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  • 20 Marks

PM – Mar/Jul 2020 – L2 – Q6 – Performance Measurement Systems

Explains types of information required by different management levels and the qualities of good information.

Performance management incorporates activities that aim to ensure that goals are consistently met in an effective and efficient manner. In order to achieve this, management requires reliable systems to support them in decision making.

Required:
Explain, with examples, the common types of information that are required by various levels of management for effective decision making, stating the qualities needed to classify such information as good. (20 marks)

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  • 1 Marks

MI – May 2015 – L1 – SA – Q10 – Introduction to Cost Accounting

Identify the factor that does not contribute to good cost accounting information.

Which of the following factors may NOT contribute to a good cost accounting information for management use?
A. Timeliness
B. Relevance
C. Accuracy
D. Efficiency
E. Clarity

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  • 3 Marks

MA – May 2017 – L2 – Q1b – Other aspects of performance measurement

Explain three qualities of management accounting information in terms of their importance for decision making.

While managers can use different leadership styles, they all share the task of utilizing information to make decisions that achieve organizational goals. Accounting information for decision making will differ in terms of its details depending on the user.

Required:

Explain THREE qualities of Management Accounting information. (3 marks)

Answer:

The qualities of Management Accounting information include:

  1. Relevance:
    Information should be timely and bear on the decision-making process by possessing predictive or confirmatory (feedback) value.
  2. Faithful Representation:
    Information must be truthful, complete, neutral, and free from error.
  3. Comparability:
    Even though different companies may use different accounting methods, there is still sufficient basis for valid comparison.

Additional points from the original answer but not required since only three qualities were asked:

  • Consistency:
    Deviations in measured outcomes from period to period should be the result of deviations in underlying performance (not accounting quirks).
  • Verifiability:
    Different knowledgeable and independent observers reach similar conclusions.
  • Timeliness:
    Information should be available in sufficient time to be capable of influencing decisions.
  • Understandability:
    Information should be clear and concise to those with reasonable business knowledge.

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You're reporting an error for "MA – May 2017 – L2 – Q1b – Other aspects of performance measurement"

  • 10 Marks

BMIS – Mar 2023 – L1 – Q5a – Introduction to information technology and information systems

Differentiates between data and information and explains essential qualities of information.

One of the most important resources Management of an organization requires in order to make meaningful decisions is credible information which has often been wrongly referred to as data.

Required:
i) Distinguish between data and information.
(2 marks)
ii) Explain FOUR (4) essential qualities of information.
(8 marks)

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You're reporting an error for "BMIS – Mar 2023 – L1 – Q5a – Introduction to information technology and information systems"

  • 4 Marks

BMIS – May 2017 – L1 – Q1c – Introduction to information technology and information systems

Describe four qualities of useful information.

c) To be useful, information requires a number of specific qualities. Information systems should therefore aim to produce information that possesses these qualities.

Required:
Describe FOUR qualities of a useful information.

(4 marks)

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