Ch02-Accounting on the Internet Flashcards
Internet
is a collection of local and wide-area networks that are connected together via the internet backbone i.e. the main electronic connections of the system
domain address
- The Internet begin with this.
- also called a Uniform Resource Locator - URL
- is a text address: “www.name.com.uk”
Internet Protocol (IP)
- a numeric address of a text-based domain address, for transmission purposes.
- 207.142.131.248
Internet Corporation for Assigned Names and Numbers (ICANN)
ICANN, maintains the official registry of domain names, manages the domain name system (DNS) to ensure that all IP addresses are unique and make sure that each domain name maps to its correct IP address
Transmission Control Protocol / Internet Protocol
- TCP/IP, IP addresses enable Internet computers to deliver a specific message to a specific computer at a specific computer site, for example: when you send an email message to a friend at another university using this standard
- IP address - useful to auditors b/c they identify the sender.
intranet
- Based on same software as the Internet
- Internal to the organization
- Outsiders are unable to access information
extranet
- Enable selected external users to access intranets
- Utilize passwords or private data communications channels
- a network that a business might establish with its trading partners.
World Wide Web, or the Web
- Multimedia portion of the Internet
- web browser, web page
HTML (hypertext markup language)
- Editing language
- Used in design of web pages
HTTP (hypertext transfer protocol)
Communications protocol used to transfer web pages
Groupware
- Allow users to complete numerous tasks electronically
- Send and receive e-mail, collaborate on work tasks, schedule appointments, share files
- Software include Exchange, Groupwise, Lotus Notes, and Outlook
Instant message software
- Remote users communicate in real time
- Electronic Conferencing
- MSN message, yahoo Messenger, Skype
Knowledge management
Programs utilized to distribute expertise within the organization
e.g. an employee with a client issue can access the knowledge database to learn how others handled similar issues.
Web logs or Blogs
- Collaboration tool - allow users with Web browser and easy-to-use software to publish personal diaries, etc.
- Create, share, and leverage knowledge
Social Networking and Its Value to Accountants
Commercial Utilization
- Increase organization recognition
- Public reaction to launch of new product
- Developing an online presence
- Seeking new clients
- Communicate on projects
- Identify consumer anger
XML (eXtensible Markup Language)
- Similar to HTM:
- users define their own tags
- XML tags describe the data
- Problem: lack of consistency, no standardized tags that describe financial information, hence difficult for comparison
XBRL (Extensible Business Reporting Language)
- a specialized subset of XML
- Tags are standardized for business reporting purposes
XBRL International Consortium
- create XBRL standards that anyone can use, license-free
- current status of XBRL
XBRL Instance Documents and Taxonomies
- Must understand the standard tags
- Must understand the rules that govern the use of the tags
The Benefits of XBRL
- Transmit financial data in standard format
- Data items are uniquely defined
- Searching for tags is easier (IDEA)
- Data is self-checking
- Automatic and reliable exchange of financial information
- Companies are not constrained to specific formats
interactive data and electronic applications (IDEA)
part of the SEC, contains XBRL information for over 10,000 companies, a valuable source of financial information and an important reason why standardized reporting is useful
The Drawbacks of XBRL
- Requires new users to learn, and conform to, the standards of the language
- Evolving standards require conformity to changing specifications
- No requirement for auditors to provide assurance
- Costs of transition
e-business
- conducting business with computers and data communications
- via Internet / virtual private networks (VPN), or data transmission lines.
- eg. (1) e-accounting, (2) retail sales, (3) e-payment and e-wallets, (4) electronic data interchange, and (5) cloud computing services
Categories of E-business
- eAccounting
- B2B, B2B, and C2C
- Retail sales
- E-payments and E-wallets
- Electronic data interchange (EDI)
- Cloud-computing services
- The Internet of Things (IoT)
E- accounting
Performing accounting functions on the Internet :
- Preparing financial reports
- Completing income tax returns
- Preparing budgets
- Writing reports
- Publishing financial information
Retail sales
- Virtual stores to sell directly to customers
- Automated AISs
Problems with Internet Retail Sales
- Legitimacy of web sites
- Reliance upon e-mails
- Reliance upon suppliers
- Click fraud
- Privacy concerns
Click fraud
- pay-per-click contract
- Overcharging companies for phantom clicks on an advertising link
Pay-Per-Click contract
Business pay fee every time a customer clicks on a link to its website from another site (search engine)
Retail sales - privacy concern
- Annoying e-mail
- Credit card information
- Sensitive information (example – Rx)
e-payments
- Faster, easier, and safer way to handle online transactions
- E-payment service acts as intermediary
e-wallet
- Store consumer’s personal information. Do not store dollars.
- Customers pay for purchases by providing their e-wallet account numbers
Virtual Currency
a medium of exchange that operates beyond restrictions of a particular country or its monetary policy
Virtual Currency - risks
- Potential devaluation of currency in response to market forces
- Transactions are not independently auditable
- Earlier virtual currencies have failed
- Unwillingness of others to accept it
Retailers accept virtual currency
- Ability to do more business
- Ease of electronic transactions
- No need for credit card middlemen or check clearing houses
- Near-instantaneous credit of transactions to corporate accounts
- Consumer wallets cannot be frozen
- No transaction fees
- Useful if required to pay ransomware quickly
Virtual Currencies–Advantages
- No need to exchange one type of currency for another
- Escapes government scrutiny (e.g., frozen assets)
- Ability to conduct business electronically on the Internet
- Avoids middlemen such as check-clearing houses
- Transactions happen almost instantaneously
- Can be spent at a variety of places
Virtual Currencies–Disadvantages
- Increased risk because it operates without safety of a central bank or government
- Transactions are not auditable
- May not be universally accepted
- Currencies themselves have been volatile in the past
- Most past virtual currencies have ultimately failed.
Three Models of E-Commerce
B2B, B2C, C2C
B2C –Business to Consumer
Oldest and best known model
Example: Dell Computers
B2B – Business to Business
Businesses conduct business with each other
Example: Purchases from suppliers
C2C – Consumer to Consumer
Consumers buy goods or services from each other
Example: Uber
E-Commerce
Businesses buying and selling goods and services to each other over the Internet
E-Commerce - Advantages
- Shortens time from purchase to delivery
- Expanded variety of vendors
- Reduces processing costs
- Wider availability of real-time data
- Open for business 24/7
Electronic Data Interchange (EDI)
- Transmit information over high-speed data communications channels
- EDI automates the exchange of business information, particularly with respect to source documents.
EDI - Advantages
- Ability to fax documents
- Can include handwritten signatures
- Ability to exchange graphic and photographic documents
Cloud computing
- Refers to purchasing services from vendors over the -Internet.
- eg, Web hosting, payroll processing, emailling, outsourcer business phone systems
Processing services
Platform as a Service (PaaS)
the Internet of Things (IoT)
devices that use the Internet to communicate with their owners
Storage and Backup Services
Maintain copies of critical data
Educational Services
- Research and using specialized web tutorials
- One important personal category of cloud computing for accountants
phishing
- tricking users into providing information such as social security number, debit card PIN number, passwords or similar personal information
- spear phishing - attempting to collect sensitive information / focus on specific individual or groups.
spoofing
Posing as an authentic user to gain access to a computer system
ransomware
malicious software that deny access to computer system resources until you pay $$$.
firewall
- reject unauthorized users from access
- Stand-alone devices and/or software
firewall - Two Primary Methods
- Inclusion – Access Control List (ACL)
- Exclusion
firewall - problems
- Denial-of-Service Attacks
- Spoofing
Intrusion Detection Systems (IDSs)
- (1) to prevent unauthorized access to sensitive information and (2) to alert system admin to potential violations.
Passive IDSs - Create logs of potential intrusions - Alert network administrators Reactive IDSs - Detect potential intrusions dynamically - Log off potentially malicious users - Program firewalls to block messages from suspected source
Value-added networks (VANs)
Definition: - Private, point-to-point communication channels - Usually created for security purposes Methods of Creation - Blank slate, create from scratch - Lease secure, dedicated transmission lines - Create a Virtual Private Network (VPN)
Virtual private network (VPNs)
Definition - Similar to VAN - Transmit messages over existing Internet connections Creating Secure Data Transmission - Use “tunneling” security protocols - Encrypt transmitted data - Authenticate remote computer
Proxy Server
Definition
- Network server that controls web access
Advantages
- Funnel internet requests through a single server
- Examine and test requests for authenticity
- Limit employee access to approved websites
- Limit stored information
- Store frequently-accessed web pages (Cache)
Data Encryption
Definition
- Transform plaintext messages into unintelligible cyphertext messages
Encryption key
- Mathematical function dependent upon a large prime number
- Data Encryption Standard (DES)
Secret Key Cryptography
- Users must keep the key secret and not share the key with other parties
Public Key Encryption
- Each party uses a pair of public/private encryption keys
SSL and S-HTTP
Digital Signature
- Encrypted portion of message: a company can transmit a complete document in plaintext and then include a portion of the same message or some other standard text in an encrypted format
- Digital Signature Standard (DSS)
Groupware is the technology that enables knowledge sharing and knowledge management among employees.
True
XBRL allows users to extract and compare financial data from many different companies.
True
EDI automates the exchange of business information, particularly with respect to source documents.
TRUE
A major issue impacting e-business is the trade-off between accessibility and vulnerability.
TRUE
Digital time stamping authenticates the time and sometimes the place a transmission or transaction occurred.
TRUE
Three types of access security are:
(1) what you have; (2) what you know; and (3) who you are
The term “phishing” refers to the use of web pages or other means to trick viewers into revealing their passwords or other personal information.
TRUE
SaaS
stand for “software as a service”
When a cloud service company hosts a client’s website, this is an example of :
“platform as a service” (PaaS)
An example of an Internet service provider is:
a) General Electric
b) AOL
c) PeachTree
d) ISP
e) none of these
AOL
An advantage of an extranet is that:
a) It can disseminate information corporate-wide
b) It can be accessed by selected trading partners
c) Users can employ common web browsers to access information in them
d) all of the above
D
The letter “p” in the acronym http stands for:
a) Page
b) Provider
c) Protocol
d) Parity
c. protocol
http = hypertext transfer protocol
This language allows its users to create web pages on the Internet:
a) HTTP
b) HTML
c) URL
d) COBOL
b. HTML - hypertext markup language
Which of the following is true about XBRL?
a) It is a business application of XML
b) It uses tags such as <b> like HTML
c) It is used by the SEC to collect and store financial information about companies
d) all of the above are true about XBRL</b>
D
One advantage of XBRL tags is that:
a) They always contain links to other web pages
b) Optional entries allow users to specify units of currency, such as Euros
c) They are now fixed standards
d) They cannot be used by hackers
B
IDEA is used by the Securities and Exchange Commission (SEC) to:
a) Store the financial data of public companies
b) Collect lists of bankrupt companies
c) Store the URL’s of member firms
d) Collect data on individuals victimized by identity theft hackers
IDEA - interactive data and electronics application
A.
All of the following are examples of EDI “documents” except:
a) Purchase orders
b) Sales invoices
c) Customs documents
d) Bar codes
D
What is the main reason why companies prefer VANs to the Internet for implementing EDI?
a) Cost - VANs are cheaper than the Internet
b) Speed - VANs are faster than the Internet
c) Security - VANs are thought to be more secure
d) Convenience - VANs are everywhere
C.
VANs - value-added network
Tricking users into providing personal information such as a social security number on a web site is an example of:
Phishing
The term “spoofing” refers to:
a) Computer hijacking
b) Kidding
c) Posing as a legitimate computer user
d) Distributing junk mail
C.
The purpose of a company firewall is to:
a) Guard against spoofing
b) Assist the IETF
c) Deny computer hackers access to sensitive data
d) all of the above
C.
A secure method of transmitting messages cheaply over existing Internet connenctions.
VPN (virtual private network)
A local area network file server typically devoted to providing Internet service
Proxy
A transmission protocol enabling users to send voice-grade messages over the Internet
VoiP
A transmission protocol used to send email messages sent over the Internet
TCP/IP
An encryption standard used by the U.S. government.
DES (data encryption standard)
Inflating the number of uses of a link to an alternate website.
click fraud
The exchange of electronic documents such as contracts
EDI (electronic data interchange)
The markup language typically used to display web pages in a web browser
HTMP
What does “html” stand for and what is it used for?
HTML stands for “hypertext markup language.” HTML is the editing language used to display text, graphics, hyperlinks and similar information in web pages. HTML is nearly universal in that it works no matter which browser you use. The language mostly uses pairs of tags such as <b> and </b> to perform such tasks as bolding text.
