Question

There is a statement in AIS that states, “collecting too much information is that same as not collecting any” … the last thing you want to do from a management point of view is to collect information about your company that you will not be able to analyze and make decisions on. The idea about information is that ability to make strong decisions that will help the business. Now, putting that in consideration, how can you determine how much information is to be collected? Provide an example

Answer 1

WHAT IS AIS?

An accounting information system (AIS) is an information system used by a business to collect, store, manage, process, retrieve and report its financial data so that it can be used by accountants, chief financial officers (CFOs) and management.

The data related to the finances of any business must be included in the AIS which will help in preparing the accounting reports.

The statement in AIS that collecting too much information is that same as not collecting any” holds true.

Data is the backbone of the business that help any business to conduct it operations efficiently and easily.Various department in the company requires data such as Sales department,accounts and finance department requires respective data which enable them to take decision.

Too much of anything will lead to nowhere instead of that it will complicate the decision making process of any business.and will lead the company to act in many unproductive ways.As an individual we tend to believe the more the data the more it will benefit the business but that's not true.

DETERMINING HOW MUCH DATA IS TO BE COLLECTED:

1.Objective:

The data collected should adhere to the objective of the company.Instead of too much data company should focus on right data.The areas need to be identified for which the data is required.The data should be just adequate for the objective of the business.For instance if the company' objective is to increase sales it should have the data of target customers.

2.Identification of data:

After collecting the data the company should look into the data to filter it according to the company's need.The remaining data needs to be eliminated to reduce the burden of such unwanted data.

3.Data check:

After performing the data identification check whether the information is assisting the company to meet it's required objective.