4. Information technology and information systems in business

Question 1

define data.

Answer 1

numbers, letters and transactions that have been recorded but not yet processes into a form that is suitable for making decisions.

Question 2

define information.

Answer 2

data that has been processed that can be used to make decisions.

Question 3

why do managers require information? (4)

Answer 3

• to make informed decisions
• to monitor performance
• to analyse what is happening in the business
• to provide records

Question 4

who is information most commonly shared with? (4)

Answer 4

• shareholders
• government agencies
• customers
• employees

Question 5

good information is… (8)

ACRONYM

Answer 5

Accurate
Complete
Cost effective
Understandable
Relevant
Adaptable
Timely
Easy to use

Question 6

what is the difference between information systems (IS) and information technology (IT)

Answer 6

information systems refer to the management of information whereas information technology is any equipment used concerned with data.

Question 7

in relation to the three types of management, what data is needed?

Answer 7

strategic: long-term planning
tactical: summarised
operational: in-depth

Question 8

what types of information systems are used at each level of management? (3)

Answer 8

• strategic: management information systems (MIS) and executive information systems (EIS) used.
• tactical: management information systems (MIS)
• operational: transaction processing system (TPS)

Question 9

what is a TPS?

Answer 9

Transaction Processing System

- records daily transactions of the organisation

Question 10

what is a MIS?

Answer 10

Management Information System

- convert TPS data into information for tactical managers

Question 11

what is a DSS?

Answer 11

Decision Support System

- computer system that supports decision making. tailored to needs of particular business

Question 12

what is an EIS?

Answer 12

Executive information system
- combines information from the entire business and relevant environment. summarised and detailed reports for strategic managers.

Question 13

what is an ES?

Answer 13

Expert system

- used by higher levels of management for expert knowledge, such as by an accountant to calculate a tax liability.

Question 14

what is a software application? what are the 3 named in the exam?

Answer 14

a computer programme that is designed to help users with certain tasks.

• spreadsheets
• databases
• accountancy packages

Question 15

what are the advantages of computerisation? (6)

Answer 15

• speed
• accuracy
• amount/volume
• complexity
• cost
• presentation

Question 16

what is cloud computing?

what are the benefits of cloud computing? (10)

Answer 16

computing that uses the internet rather than software, applications or services.

• store and share data
• on demand
• flexible
• collaboration
• competitive
• easier scaling
• reduced maintenance
• back-ups
• better security
• disaster recovery

Question 17

what is artificial intelligence?

Answer 17

an area of computer science which creates intelligent machines to work like human beings.

Question 18

what is machine learning?

Answer 18

algorithms that detect patterns and make predictions and recommendations.

Question 19

what is machine learning used for in accounting? (4)

Answer 19

• code accounting entries
• fraud detection
• forecast revenue
• analyse unstructured data (i.e. contracts and emails)

Question 20

what is big data?

Answer 20

term for a collection of data which is so large that it becomes difficult to store

Question 21

what are the four Vs of big data? who said this?

Answer 21

Gartner

• volume
• variety
• velocity
• veracity (truthfulness)

Question 22

what are the benefits of big data? (3)

Answer 22

• innovation
• gaining competitive advantage
• improving productivity

Question 23

how is big data changing...
management accounting?
financial accounting?
reporting?
audit? (3)

Answer 23

management: control systems and budgeting
financial: control systems and budgeting
reporting: quality of accounting standards
audit:
- test entire populations
- better evidence
- higher risk and fraud occurrence

Question 24

what is a block chain technology?

Answer 24

technology that allows people who do not know each other to trust a shared record of events.

Question 25

what are the main processes in a block chain technology? (4)

Answer 25

• transactions are recorded by a number of participants using a network via internet.
• details recorded by everyone
• verification is carried out by computers
• new blocks linked to previous blocks using a cryptographic hash.

Question 26

how do block chains benefit accountants? (3)

Answer 26

• reduce cost
• provide certainty of assets and liability
• free up time

Question 27

define cyber security.

Answer 27

protection of internet-connected systems from cyber attacks.

Question 28

define a cyber attack

Answer 28

malicious and deliberate attempt to breach an information system.

Question 29

what are the main types of cyber attacks? (4)

Answer 29

• man in the middle
• phishing
• malware
• denial or service attacks

Question 30

what are the threats to IT systems? (6)

Answer 30

• natural disasters
• malfunction
• viruses
• hackers
• electronic eavesdropping
• human error