ACCA Performance Management (F5) Certification Practice Exam

What type of reports does an Executive Information System (EIS) typically provide?

1. Detailed analytical reports

2. Real-time operational reports

3. Heavily summarized strategic reports

4. Financial performance reports

The correct answer is: Heavily summarized strategic reports

An Executive Information System (EIS) is designed to provide top executives with easy access to internal and external information that is relevant to their strategic management tasks. The primary focus of an EIS is to facilitate decision-making at a high level by presenting information that is heavily summarized. These reports condense vast amounts of data into a format that allows executives to quickly grasp key performance indicators and trends without delving into overly detailed analytics or operational specifics. Heavy summarization is crucial in this context because executives typically need to make informed decisions rapidly, relying on essential insights rather than details that are more suitable for operational management. This type of reporting enables them to understand the overall performance and strategic direction of the organization at a glance, helping them focus on long-term goals and strategic initiatives. While detailed analytical reports and real-time operational reports are valuable for more granular decision-making at lower levels of management, they do not align with the primary function of an EIS. Similarly, financial performance reports, while important, do not encompass the strategic overview that an EIS is intended to provide; they could be included as part of the summarized information but do not capture the broader strategic context an EIS aims to deliver.