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CIMA E1 > B. Technology In A Digital World > Flashcards

B. Technology In A Digital World Flashcards

1
Q

What is an industrial revoultion?

A

rapid and major change in an economy, driven by a shift in the methods and types of work undertaken

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2
Q

What was the 1st Industrial Revolution?

A
  • 18-19th centruy
  • shift from rural to urban societies
  • growth of steam power and machinery advancements transformed industries
  • changed basis of economies
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3
Q

When and what was the 2nd Industrial Revolution?

A
  • 1870s-1914
  • from coal, steam, iron to electricity, petroleum and steel advancements
  • growth in corporations
  • globalisation
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4
Q

What was the 3rd Industrial Revolution?

A
  • began in 1980s
  • ‘Digital Revolution’
  • move from mechanical to digital technology
  • communications, computers and introduction of internet were key
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5
Q

What technologies resulted in the 4th Industrial Revolution?

A

cloud computing, big data, data analytics, process automation, AI, data visualisation, blockchain, IoT, mobile tech and 3D printing

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6
Q

What are the features of the 4th Industrial Revolution?

A
  • fusion:cyber and physical systems will become autonomous
  • employment:automation
  • AI and ML:products customised
  • machine led manufacturing:workers help machine not vv
  • improved asset management:more efficiency
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7
Q

Points from BBC 2018 article about how owning cars will become obsolete

A
  • self driving electric vehicles operated in Uber style network
  • driverless tech will drive down fares as there is no driver
  • electric vehicles are simpler and cheaper to operate
  • tech continues to advance (Ec of Scale)
  • English drivers have cars parked 95% of the time
  • saves time and safer commutes as human error eliminated
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8
Q

What is cloud computing?

A

delivery of on-demand computing recourses over the internet: from applications to data centres

replaces trad method of locally based server

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9
Q

What are the two main types of cloud setups?

A

Public cloud-hosted by 3rd party company

Private cloud-IT service provides for own organisation

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10
Q

Amazon cloud computing

A
  • 2018:broke 1T market value
  • due to Amazon Web Services
  • market leader in cloud computing
  • third of market
  • clients range from individuals to government agencies
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11
Q

What are some advantages of cloud computing?

A 
flexibility and scalability
cost efficient
security:providers are specialists
flexible working
environmental benefits
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12
Q

What are some disadvantages of cloud computing?

A

organisational change
contract management
security, privacy and compliance
reliance on service

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13
Q

What is Big Data?

A

data sets so large and varied they are beyond the capability of traditional data-processing

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14
Q

What are the key features of Big Data?

A 
4Vs
Volume
Velocity:speed data is fed
Variety:formats
Veracity:reliability
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15
Q

2 main forms of Big Data?

A

structured (feedback data) vs unstructured (liked, social media)

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16
Q

Where can you find Big Data?

A

Human-sourced data e.g social media, emails
Machine-generated data e.g smart tech, sensors
Processed data e.g in databases
Open data e.g publicly available data

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17
Q

What is data analytics?

A

collecting, organising and analysing big data to discover patterns and other information which could inform decisions

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18
Q

What are the 3 steps to data analytics?

A

Collection of data:int and ext sources
Organisation of data:organised and stored for future use
Analysis of data:find correlations/patterns

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19
Q

What has McKinsey stated are the benefits of effective data analytics?

A 
Fresh insight and understanding
Performance improvement
Market segmentation and customisation
Decision making
Innovation
Risk management
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20
Q

What is process automation?

A

technology enabled automation of complex business processes aimed at improving consistency, quality and speed whilst delivering cost savings

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21
Q

How is traditional process automation different from modern process automation?

A

simple repetitive task replaced to automation of complex business problems

automation is becoming smarter and can make decisions using reasoning language and learned behaviour

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22
Q

How has process automation been implemented in customer contact centres?

A
  • voice recognition and AI
  • calls answered robotically
  • data capture and analytics used to monitor calls
  • led to cost savings and service improvements
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23
Q

What is Artificial Intelligence? What is the Kaplan definition?

A

area of computer science that emphasises the creation of intelligent machines that work and react like human beings

Kaplan definition: system’s ability to correctly interpret external data, to learn from such data ad to use those learnings to achieve specific goals and tasks through flexible adaptation

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24
Q

What are some examples of advanced activities AI can now master?

A

voice recognition
planning
learning
problem solving

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25
Q

AI in business?

A

Apple and Amazon use voice recognition in existing products or developing products

Facebook uses AI to recommend friends

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26
Q

What is machine learning?

A
  • subset of AI
  • code mimics human thoughts
  • uses data to calculate probability and learn from mistakes
  • detects patterns to make predictions and recommendations
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27
Q

AI use in the game GO

A
  • more advanced version of chess
  • Google DeepMind played against world champion in 2016
  • -Move 37 appeared bad but turned out to be game winning move
  • computer built knowledge from previous games
  • Lee Sedol found AI limitations to beat computer
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28
Q

What is data visualisation?

A

allows large volumes of complex data to be presented in a visually appealing and accessible way that facilitates understanding and use of underlying data

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29
Q

What is the most common use of data visualisation?

A

creating a dashboard to display the key performance indicators of a business in a live format

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30
Q

What 5 features should an effective data visualisation tool display?

A 
decision making ability-results focused
effective infrastructure-output reliant on quantity/quality of data
integration capability
prompt discovery of rules and insight
real time collaboration
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31
Q

What is blockchain?

A

decentralised, distributed and public digital ledger used to record transactions across many computers

cannot be altered retroactively without all blocks being changes and consensus of network

BOE:allows people who do not know eachother to trust a shared record of events

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32
Q

Benefits of blockchain?

A

security from cyber crime

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33
Q

What are the key features of blockchain?

A
  • number of participants record transactions via internet on publicly available ledger
  • details recorded by everyone
  • verification carried out by computers in decentralised network and discrepancies rejected
  • new block added is linked to previous block using cryptographic hash which ensures chain is never broken and always recorded
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34
Q

What are the 6 stages of a blockchain transation?

A
  1. A transaction is requested
  2. A block is created as a digital representation of the transaction
  3. The block is sent to every node in the network (distributed ledger)
  4. The nodes validate the authenticity of the transaction
  5. The nodes receive a reward for the proof of work i.e some Bitcoin
  6. The completed authorised block is added to the chain
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35
Q

Describe the characteristics of cryptocurrency

A

Bitcoin (2009, Ethereum and Litecoin)

  • no physical version
  • peer-to-peer payment network made up of users’ accounts
  • can acquire by exchanging money for bitcoin (most common) or bitcoin mining (solving problems generated by Bitcoin network)
  • stored in encrypted wallet using password protection
  • no need for central bank
  • no pre-reqs or transaction limits
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36
Q

What is the internet of things?

A

network of smart devices with inbuilt software and connectivity to the internet allowing them to constantly monitor and exchange data

37
Q

What devices are connected to the IoT?

A

anything with an on/off switch can become a smart device

common devices:

  • smart meters
  • doorbells and security
  • wearable tech
  • home appliances
  • cars
  • transport and infrastructure
  • manufacturing equipment and plant
38
Q

What is the growth in ‘smart tech’ fuelled by?

A

by improvements in broadband connectivity and development of 4G

39
Q

How is smart tech used in farmng?

A
  • monitor data on adverse effects
  • allows forewarning
  • preventative action taken resulting in better yields and cost saving
  • Allflex use smart sensors in her animals
  • monitor any problems so they can call vet or prevent infection
40
Q

What is Code-division multiple access?

A

CDMA is tech that underpins mobile tech and has increased the capability of mobile technology

41
Q

Which industries have been impacted by mobile technology?

A
  • newspapers:physical sales down
  • advertising:online ads
  • music:streaming
  • banking:mobile apps
  • socialising: media and dating
  • TV/Film:streaming and Youtube
42
Q

What is 3-D printing?

A

additive manufacturing where object is created layer by layer

allows complex parts and components to be produced much cheaper, faster and in an entirely customisable manner

43
Q

How does 3D printing work?

A
  • blueprint made using modelling software
  • printed using thermoplastic composite type material
  • follows precise coordinated layer by layer
  • can be used to build prototype parts of for bio-printing
44
Q

What are the advantages of 3D printing?

A

speed-print and test same day and altered immediately
cost effectiveness-speed and labour cost
less waste-exact design printed more accurately
confidentiality- continuous prototyping and manufacturing in-house protecting IP

45
Q

What are core modernisation tools used for? Give 2 examples

A

update existing systems and improve capabilities
mainstream

cloud tech & data visualisation

46
Q

What are exponentials? Give 2 examples

A

deliver new capabilities
at early stage of adoption

blockchain and advanced analysis

47
Q

How is modern tech changing the face of finance?

A

cloud computing revolutionising hardware and software Bs
variety and volume of data changed through data analytics and big data
info generated improved through data visualisation

48
Q

What is one of the main drivers for 9-5 schedule becoming obsolete?

A

cloud computing

49
Q

What changes has cloud computing driven?

A

collaboration-file sharing/version control minimised, multiple collaborators
flexible working- dont need to be present
increased security-specialists
up-to-date-software updates and GDPR compliant
easier integration-link with other cloud based software such as CRM

50
Q

What is cloud computing’s effect on financial reporting?

A

shift from physical assets to digital
growth in the significance of intangibles which are not recorded on SOFP
difficult to determine underlying value of digital B
IP, staff skills could be undervalued

51
Q

Cloud service impact on physical goods?

A

Streaming, AirBnB, ride sharing apps mean businesses utilise cloud computing tech in provision of their services

  • absence of physical assets such as stock
  • financial reporting is different to traditional bricks and mortar businesses
52
Q

How has computerisation changed finance professional’s role?

A

evolved from bean counters to strategic value adding

53
Q

What is business partnering?

A

mgmt accountants embedded within functions instead of central accounts
provide real time support on analysis and operational performance
data analytics and big data will increase business partnering significance

54
Q

How does Big Data affect management accounting, financial accounting and reporting?

A

mgmt: more efficient and insightful management control systems and budgeting processes
financial: quality and relevance of accounting info thus enhancing transparency and stakeholder decision making
reporting: creation and improvement of accounting standards to ensure profession stays dynamic

55
Q

How does Big Data affect internal audit?

A
  • enhance quality and relevance of assignments
  • change how internal controls are reviewed
  • shift from sample-based to entire populations examined
  • better identify fraud, anomalies or business risks and tailor approach
56
Q

What are the benefits of process automation within finance?

A 
cost savings-lower headcount
value adding-resources freed up
improved accuracy- human error omitted
positive return-well managed process
adaptability-can lead to process improvement exercise
57
Q

What are the drawbacks of process automation within finance?

A

uncertainty-job security and prospects
relationship management-resources required to work it
competence-IT staff must understand needs
training
change management-managed carefully and led effectively

58
Q

Process automation in intercompany balances at Johnson and Johnson

A
  • wanted to make different systems across business more integrated and compatible
  • project focused on simplifying inter company requests, recharges and postings:
  • use of automated inbox
  • used template to verify decisions
  • omissions cause request to be rejected and flagged
  • complete requests uploaded
  • purchase order approved
  • triggers next stage
  • all relevant posting automatically made in both divisions with sales and receivable on one side and expenses/payables in the other division

process improved consistency, accuracy and timeliness of recharge process. No longer intercompany balance issues. Simpler reporting and increased detail with regards to workflow

Freed up finance staff time to focus on more value activities and improved understanding of core process

59
Q

AI and forecasting in Salesforce

A
  • Salesforce is a cloud based CRM system provider
  • AI aids revenue forecasts
  • omits human input which stops confirmation bias/emotion
  • CIO insists data needs to be seen in day-to-day operations to aid understanding and buy-in process
  • e.g introducing AI data driven approach in sales will be consistent and fact lead to leave out human inconsistency and enhance forecasting and improve AI learning that can be achieved
  • done by system interrogating and attempting to understand the differenced between the forecasts and actuals
  • AI will learn and become increasingly accurate

-process took time but CIO insists the improved forecasting has resulted in efficiencies

60
Q

How will AI contribute to substantial improvements in accounting?

A

ML to code entries and improve on accuracy of rules based approach
improve fraud detection through sophisticated ML models of ‘normal’ activities and better prediction of fraudulent activities
predictive models to forecast revenues
improved analysis of unstructured data including contracts and emails

61
Q

AI In Serious Fraud Office (SFO)

A

UK SFO invested in AI system called OpenText Axcelerate

  • interrogates huge volumes of documents and find connections between individuals, words, phrases better than humans
  • saved countless man hours
  • identified more connections than average human worker
  • handled more complex and opaque connections
  • enhanced investigative power and effectiveness of fraud agency overall
62
Q

What are the key benefits of data visualisation?

A

accessible-user friendly compares to spreadsheets/reports

real time-live updates

performance optimisation - better decision making and efficiency

insight and understanding - improved understanding and fresh insights

63
Q

Data visualisations and KPIs

A

KPI=key performance indicator
-set of metrics used to monitor performance in critical business areas

  • big data underpins the collection and analysis of this data
  • data visualisation helps us understand it
  • dashboards are increasingly used to display KPIs to staff in real time and flag areas needing improvement to hit targets
  • if performance is falling below target levels the graphics will highlight this prompting action or reason
64
Q

How does cryptocurrency work?

A

in a normal transaction:
bank checks ledger and authorises card transaction to retailer and charge a small fee for doing so

For cryptocurrencies, the bank is removed and blockchain technology is used to verify the transaction using the distributed ledger

with crypto:
authorisation is given by different independent ledgers on whether buyer has sufficient crypto, if they all agree then transaction is authorised. Otherwise attempt is flagged up. One ledger holder is randomly selected and awarded new crypto like a few.

DISTrIBUTED LEDGER removed central intermediary

65
Q

Blockchain in financial reporting

A
  • crypto accounting is a grey area on how it should be classified
  • no accounting standards for this development
  • should it be considered cash, intangible asset, financial instrument?
66
Q

Blockchain and cross border payments

A
  • these are complex, expensive and slow
  • intermediaries charge fees
  • blockchain driven solutions e.g RippleNet are growing in number and use
  • aim to make money transfer like data transfer:easy, seamless and circumvent middle man
67
Q

Blockchain and smart contracts

A
  • self executing contracts using blockchain tech built upon crypto, digital signatures and secure computation
  • assets exchanged in transparent manner
  • doc is created and agreed upon then verified
  • obligations cannot be tampered with without validation
68
Q

Blockchain and security/traceability

A
  • dist ledger means all network players hold copy
  • cant amend single block or will become invalid and flagged up
  • all blocks are marked and secure through cryptography
  • has impact on how finance fns record transactions with third parties
69
Q

What are some examples of how blockchain can enhance the accounting profession?

A

reduce costs of maintaining/reconciling ledgers
providing absolute certainty over ownership/history of assets
helping accountants gain clarity over available resources
freeing up resource to concentrate on value adding activities rather than record-keeping

70
Q

Rolls Royce and internet of things

A

-manufacturer has embraced IoT and Big Data capabilities

engines manufactures with sensors built in throughout unit

  • produce live data which feeds back to engineers
  • anomalies flagged up immediately
  • preventative maintenance schedules earlier than before

AI repaces human intervention over time as there is no room for error

new way of monitoring has facilitated design improvements for new models and led to new business model

  • customers charged per hour use of engine
  • package called total care that covers all maintenance and upkeep of engines
71
Q

Efficiencies facilitated by mobile phone use in finance fn?

A

communication and flexibility-improved comm btwn staff
scalability-mobile and cloud tech overcome capital costs of setting up systems and IT
less paperwork-use of mobile tech has reduced duplication and data entry e.g expense system
instant data visiblity- assess and communicate key data through dashboards

72
Q

Impact of 3-D printing on finance function?

A

largely from cost perspective

  • less waste: no offcuts
  • no overproduction:made to exact specification
  • increase in direct costs :time spent setting up system
  • minimal tooling and set up costs:smaller prod runs
  • inventory:JIT printing
73
Q

What is a digital mindset?

A

concept of seeing beyond the individual elements of digital change

understanding the deeper ways in which tech will transform every aspect of society and therefore impact organisations

extension of ‘helicopter view’ idea

74
Q

5 qualities Forbes magazine identified as being important dimensions of the digital mindset?

A 
provide vision yet empower others
give up control yet 'architect' the choices
sustain yet disrupt
rely on data yet trust intuition
be sceptical yet open-minded
75
Q

What quality do staff of a change adept organisation need?

A

have a growth mindset:appetite to continuously develop and learn

76
Q

Change as an opportunity or threat in Kodak

A

digital mindset=seeing the bigger picture

  • Kodak developed first digital camera in 1975
  • didnt pursue innovation
  • lost core business of photo film and didnt benefit from digital photography
  • entered saturated market
  • filed for bankruptcy in 2012
77
Q

Technology impacting Expenses in finance

A
  • Certify/Rydoo: mobile expensing apps
  • details extracted from receipt picture and categorised
  • submitted for authorisation
  • immediately reimbursed
  • human input and authorisation
  • rest is automated so time is saved
78
Q

Skills required by future finance professionals?

A

analytical skills
business acumen-wide understanding
judgement-decision making, evaluating data sources
people skills-communication, empathy and understand people
leadership-position within organisation

79
Q

What is the automation paradox?

A
  • increased automation means humans lose skills on practical level
  • humans may not be able to fill in gaps that machines can’t without these skills
  • retaining expertise is a challenge for modern professionals
  • e.g if maintaining ledger accounts is automated, accountant may not remember underpinning knowledge and can’t step in when it fails
80
Q

What is GDPR and when was it introduced?

A

General Data Protection Regulation(2018) is a data protection legislation introduced throughout the EU and details the following principles:

  • used fairly, lawfully and transparently
  • used for specified, explicit purposes
  • used in a way that is adequate, relevant and limited to only what is necessary
  • accurate and, where required, kept up to date
  • kept for no longer than is necessary
  • handled in a way that ensures appropriate security
81
Q

What do data controllers do?

A

ensure adequate safeguards and controls are in place within an org to implement GDPR principles

82
Q

Why was the last GDPR edit 1995?

A

internet was in its infancy, social media didn’t exist

2018 data use required new laws

83
Q

What happened between Facebook and Cambridge Analytica?

A
  • Fb faces £500k fine for role in CA scandal
  • this was max fine under GDPR law at the time
  • FB breached legislation by allowing 3rd party developers access to user data without consent

CA scandal:

  • app used personality quizzes to collect data of 87m FB users data
  • CA bought this data
  • used data to profile voters in US election based on personality and psychology and then targeted ads
  • around 1m UK used affected by scandal
84
Q

What is ethics?

A

system of moral principles that affect how people make decisions

85
Q

Why are ethical and social considerations important?

A

investor confidence
customer confidence in data security is vital
consumers feel safer
attracts employees
long term sustainability
proactiveness & risk awareness displayed

86
Q

What are some of Microsoft’s AI ethical principles?

A

-laid down voluntary set of principles surrounding AI use

Principles:

  • fairness
  • reliability & safety
  • privacy &security
  • inclusiveness
  • transparency
  • accountability
87
Q

What is CDR?

A

Corporate Digital Responsibility is a new concept that extends CSR ethos to digital world

  • voluntary commitment to protecting customers and employees
  • considers broader ethical issues
  • ensures tech and data re used proactively and wisely
88
Q

Which 5 key areas does CDR strategy include?

A
  • digital stewardship:using data responsibly
  • customer expectations:transparency, opt in and out
  • giving back:help society by sharing data e.g medical data
  • data value:reward/incentivise customers to give data
  • digital inclusion:ensure members of society have necessary skills

CIMA E1 (5 decks)

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