January 29, 2022


Accounting + Finance Blog

Five Objectives of a good information system

Five Objectives of a good information system

Information systems are created to help provide reports of stewardship of a business entity by management and directors. However, to be more specific, below are five objectives of a good information system.

Objectives of the information system

A good information system serves the following objectives

It helps management makes an informed decision

A good information system, especially an accounting information system is useful to management in making informed decisions. Each manager can tap from the wide data available in the information system (IT), analyze and brainstorm on it, then sit at a round table to make decisions on a current challenge.

It is an enabler of day-to-day operations

IT provides easy and efficient ways to carry out day-to-day business activities. Operational business activities such as inputting sales and purchases amount, calculating VAT charges, registering a new customer into the company register, paying for electricity bills, and so on are made easy and efficient as a result of Information Technology.

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It aids the stewardship function of management

Through an accounting information system (AIS), management can achieve its stewardship function effectively and efficiently. AIS provides various reports. These reports are for internal and external users.

Internal users require responsibility reports, such as a budget report. And external users need financial statements and other mandatory reports. The AIS system for a firm usually automates these reports.

It improves the workflow of an organization

A good information system improves the workflow of an organization. A small business that lacks an organized workflow may see improvement upon installing an accounting information system.

For example, in a small business, a manager may undertake more than one workflow. He or she may be in charge of accounting and as well as auditing activities. But with an accounting information system in place, a separate manager will have to handle each of these workflows.

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It helps delegate responsibility along with authority to each employee

Many organizations give responsibilities to their employees but fail to add relevant authority to them. However, a good IT system delegates responsibilities as well as authority to each employee of an entity.

In conclusion, an effective and efficient IT and AIS system provides data and information that are of utmost importance to a business entity. It also helps delegate authority and responsibilities to each employee of the organization.