Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What best describes the impact of IT and ISD on business processes?

1. Reduction in the necessity for accountants

2. Creation of bureaucratic layers

3. Streamlining and enhancing methods of working

4. Increased complexity in decision-making

The correct answer is: Streamlining and enhancing methods of working

The impact of Information Technology (IT) and Information System Development (ISD) on business processes is fundamentally about improving efficiency and effectiveness. When IT and ISD are integrated into business processes, they streamline operations by automating tasks, facilitating faster communication, and enabling better data management. This leads to enhanced productivity and allows organizations to focus on higher-level strategic tasks rather than being bogged down by manual processes. By streamlining methods of working, IT and ISD contribute to a more agile and responsive business environment. For example, automated reporting tools can generate financial reports faster than traditional methods, allowing decision-makers to analyze data more quickly and accurately. Similarly, project management software can improve collaboration and visibility across teams, leading to more successful project outcomes. In contrast, the other options suggest negative impacts or misconceptions. The idea that IT reduces the need for accountants overlooks the evolving role of accountants, who increasingly utilize technology to add value rather than simply perform traditional bookkeeping tasks. Suggesting that IT creates bureaucratic layers is contrary to one of its primary goals, which is to simplify and flatten organizational structures. Lastly, indicating that IT increases complexity in decision-making does not align with the general understanding that modern tools are designed to simplify data analysis and enhance clarity in decision-making processes