Deltum Ltd is an established retail company located in the north east of England. The company has been operating successfully for over 50 years. In 2000, following a rather aggressive takeover bid Deltum Ltd finally acquired the company’s only regional retail competitor, Hetmex Ltd. Although the combined company did experience some early operating successes, the overall profitability and efficiency of the combined company has recently fallen sharply, market share and product quality are now at record lows with the combined company recording its first annual trading loss in 2003. Despite attempts by the management of Deltum Ltd to combine the two companies’ accounting information systems, a recent external consultants’ report was highly critical suggesting that the core problems being experienced by the company have resulted from Deltum Ltd’s management’s inability to understand the nature, context and purpose of a company’s accounting information system.
Required
Provide a report for the management of Deltum Ltd explaining the nature, purpose and uses of a company’s accounting information system, and offer reasons why Deltum Ltd has faced such significant problems.