ACCA Performance Management (F5) Certification Practice Exam

What advantages do Executive Information Systems (EIS) provide to senior managers?

1. Direct access only to internal company data

2. Flexible access to both internal and relevant external information

3. Limitation in reporting capabilities

4. Limited scope of information for immediate decision-making

The correct answer is: Flexible access to both internal and relevant external information

The correct choice highlights the advantage of Executive Information Systems (EIS) in providing flexible access to both internal and relevant external information. EIS are designed to assist senior managers in making informed decisions by aggregating and presenting data from various sources. This flexibility is crucial because it allows executives to gain insights not only from their company's internal datasets—like sales figures and financial reports—but also from external sources, such as market trends, economic indicators, and competitor analysis. The ability to access a broader range of information enables senior managers to understand the context of their operations better and drives more strategic decision-making. For instance, having access to market trends can help in identifying potential opportunities or threats that could impact the organization, allowing for quicker and more informed responses. This comprehensive access contrasts with scenarios where only internal data is available, which can lead to a narrow understanding of the business landscape. Furthermore, the limitations mentioned in the other options would hinder the capabilities of an EIS. An effective EIS should enhance reporting capabilities and support a wide scope of information for immediate decision-making, rather than restrict it.