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ACCA Strategic Professional · Advanced Performance Management · Technology and information systems

Marlow Foods' management accountants currently produce monthly variance reports manually from exported spreadsheets, which are issued ten working days after month end. Which change to the information system would most improve the usefulness of these reports for control purposes?

Automating data extraction and reporting is the best change, because timeliness is what limits control value here. Faster or on-demand variance information lets managers take corrective action sooner, while extra decimal places, indiscriminate distribution or quarterly reporting reduce relevance or delay feedback further.

  1. AAutomate data extraction and reporting so that variances are available shortly after period end or on demandCorrect
  2. BAdd more decimal places to each variance figure
  3. CDistribute the reports to all employees regardless of responsibility
  4. DIssue the reports quarterly rather than monthly

Explanation

Useful control information must be timely so corrective action can be taken. Automating extraction and reporting shortens the delay or gives on-demand access. Extra precision, wider uncontrolled distribution or less frequent reporting do not improve timeliness or relevance.

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