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