Case study: Sahira has received employee complaints about the lengthy time it takes for her team to create financial reports. Sahira’s team explains that the computers are the problem and that the software programs are too difficult to use and that many hours of manual manipulation of data are required to complete monthly reports (Colorado State University-Global Campus, 2014, p. 6, ¶3).
Issues of delays in financial reporting generally emanate from two root causes: 1) data reporting system problems (data input and software integration), or 2) insufficient training (operator error), and sometimes a combination of the two (of course, new software would require retraining in any event). Given the widespread nature of the problem in this case, operator error due to lack of or insufficient training likely is not the root cause of the problem (although that may be the initial target for potential solution). Consequently, the management dilemma here can be defined as: Financial reporting delays. The management and research questions should address how to fix the cause of the financial reporting delays (Formulating the Research Question Worksheet, Appendix).
Financial Reporting Delays: Can Collection and Management of
Financial Data Be Improved?
Every company, public or private, is faced with the issue of integrating its internal operating reporting systems into its accounting software in order to provide timely monthly financial reports to its stakeholders: management, other employees, shareholders, and often government regulatory entities, i.e., the U.S. Securities and Exchange Commission, or local, state, or federal taxing or regulatory authorities (Cathro, 2012). The best, and thus most efficient, information systems (IS) enable single entry of information: The fewer times the data has to be input, the less chance for error, and manual re-entry is particularly inefficient from time wasting alone—one-time input with no retyping of data must be the ultimate goal, and, if possible, no further manipulation of the data once it is imported into the financial reporting system (Li, Peters, Richardson, & Weidenmier Watson, 2012). The information technology (IT) department’s primary purpose must be to ensure that all of the internal reporting systems seamlessly communicate with each other and are fully integrated to import information from all departments into the ultimate financial reporting platform (American Institute of Certified Public Accountants, 2007). The management question to be addressed, therefore, is: Can collection and management of financial data be improved?
Can Collection and Management of Financial Data Be Improved?
Whether addressing a training problem or an IT software integration problem, the question of improving collection, management, and integration of financial data is critical to finding a solution to financial reporting delays (Institute of Finance & Management, 2012). Particularly in the era of Sarbanes-Oxley,...