Ch.9 Full Powerpoint Notes Flashcards
What is Data Warehouses?
A data warehouse is a collection of information gathered from an assortment of external and operational (that is, internal) databases to facilitate reporting for decision making and business analysis.
Data warehouses often serve as the main repository of the firm’s historical data, or in other words, its corporate memory and will often serve as an archive of past firm performance.
What are the other details about data warehouses?
Data warehouses are kept separate from the operational database.
-Information in the warehouse can be stored safely for extended periods of time and data warehouses can run data queries without slowing down the performance of the company’s operational systems.
Data warehouses do work together with operational systems to provide necessary insight, particularly in the case of customer relationship management (C R M) and supply chain management (S C M) systems.
- What are customers buying?
- What did they buy in a recession?
- What did they buy after a natural disasters?
- What do they buy as their income goes up?
Data warehouses are often designed to facilitate decision making such as those often used in managerial accounting.
- Output might include variance reports, trend reports, variance analysis reports, and reports that show actual performance are compared to budgeted information.
What is business intelligence?
Business Intelligence is a computer-based technique for accumulating and analyzing data from databases and data warehouses to support managerial decision making.
How can firms gather business intelligence?
One way that firms may gather business intelligence is by use of a web crawler, which systematically browses the World Wide Web in a systematic way, collecting information.
The process of Business Intelligence
Gather information (either internal information, external information or both) from a variety of sources.
Analyze the data to discern patterns and trends from that information to gain understanding and meaning.
Make decisions, hopefully better-informed ones, based on the information gained.
What are examples of Business Intelligence?
How would Tesla (hub in Dallas) use business intelligence to find indicators of quality issues?
How would Dunkin’ Donuts use business intelligence to track information on potential franchise locations?
How would Morgan Stanley use business intelligence to price an initial public offering of stock for a firm in the Internet retail industry?
-They may use business intelligence to assess current economic and stock market conditions, assess how other Internet retail firms are performing in the stock market and assess how initial public offerings have recently performed.
What is data mining?
Data mining is one technique used to analyze data for business intelligence purposes. Data mining is a process using sophisticated statistical techniques to extract and analyze data from large databases to discern patterns and trends that were not previously known.
Data mining is often used to find patterns in stock prices to assist technical financial stock market analysts, or in commodities or currency trading.
- Data mining is used by credit card companies to find usage patterns which are indicative of fraud.
- It can also find trends in sales data which can be used in future marketing promotions.
What will data mining find?
Data mining will only find statistical relationships and some of them represent spurious correlations.
These do not have a plausible relationship in the real world
How can data mining be coupled?
Data mining must be coupled with common sense to interpret the statistical relationships found.
(There is a classic example that ice cream sales are correlated with drowning’s suggesting that as ice cream sales increase, the number of drownings also increase. That does not mean that ice cream sales cause drownings or that drownings cause more ice cream sales, but rather that warm weather caused (or had an effect on) both. )
What is digital Dashboard?
A digital dashboard is designed to track the firm process or performance indicators or metrics to monitor critical performance.
- Orders month to date, days that receivables are outstanding, budget variances, and days without an accident on the assembly line, etc. are all examples of what might be tracked continuously.
What is XBRL(Financial Reporting)?
X B R L stands for eXtensible Business Reporting Language and is based on the X M L language, a standard for Internet communication between businesses.
The X B R L database is available for various uses, including reporting on the firm’s web site, filing to regulators (S E C, I R S, etc.) and providing information to other interested parties such as financial analysts, loan officers and investors.
Additional Information on XBRL
Each interested X B R L user can either access standard reports (that is, 10-K going to the S E C or the corporate tax return going to the I R S) or specialized reports (that is, accessing only specific data for a financial analyst, etc.).
In 2009, the SEC published rule “Interactive Data to Improve Financial Reporting” which required all large and foreign accelerated filers (issuers/public companies) to format their financial statements using XBRL.
What is extensible markup language(XML)?
Similar to HTML
Users define their own tags
XML tags describe the data
What is the eXtensible Business Reporting Language?
Tags are standardized for business reporting purposes
What are some other important characteristics of XBRL and financial reporting?
Open source Extensible Required for SEC reporting Can also be used for internal information, such as journal entries Language—not a new set of GAAP Overseen by XBRL International
What are two major benefits that XBRL provides to the creation and electronic disseminations of financial data?
First, it enables organizations to publish information only once, using standard XBRL tags
Secondly, the information that XBRL tags provide is interpretable
What is XBRL Taxonomy?
The X B R L taxonomy defines and describes each key data element (for example, total assets, accounts, payable, net income, etc.).
XBRL files contain tagged data that is delivered to users in the form of an “instance document”, similar to that used by HTML.
XBRL instance documents contain facts about a data item (element) and contectual information (i.e. measurement unit, point in time) and are used to describe the various line items in the financial statement.
- Ex: The actual dollar amount or the details of each of the elements within the firm’s XBRL database
How is an instance document created?
An instance document is created using a taxonomy that defines the various elements and relationships between them and a schema which is the file that contains the definitions of every element that could appear in the instance document.
What is XBRL style sheets?
XBRL style sheets take the instance documents and add presentation elements to make them readable by humans.
Additional information on XBRL terminology?
The ability to modify XBRL is why it is referred to as an extension taxonomy.
The taxonomy includes a set of files knows as “linkbases”. These define the relationship among elements.
Examples:
- The Calculation linkbase specifies that “Current Assets” equals the sum of Cash, A/R, and Inventory.
- The Definition linkbase defines a hieracrchical relationship (Current Assets is a subset of Assets)
What assurances do we need on XBRL?
The most current, standardized X B R L taxonomy is used,
The underlying financial and nonfinancial data that is used in X B R L tagging is reliable,
The X B R L tagging is accurate and complete, and,
The reports generated using X B R L are complete and received on a timely basis.
XBRL- Financial Reporting on the interent
XBRL Instance Documents and Taxonomies
- Must understand the standard tags
- Must understand the rules that govern the use of the tags
Current Status of XBRL
-XBRL International Consortium
What are 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
What are 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
What is XBRL GL?
X B R L G L is also known as X B R L Global Ledger Taxonomy.
X B R L G L allows the representation of anything that is found in a chart of accounts, journal entries or historical transactions, financial and non-financial.
What are the advantages of XBRL GL?
X B R L Global Ledger is reporting independent.
X B R L Global Ledger is system independent.
X B R L Global Ledger permits consolidation.
X B R L Global Ledger provides flexibility, allowing extensible, flexible, multinational solutions that can exchange the data required by internal finance, accountants, and creditors.
The summary of XBRL
XBRL serves as a means to electronically communicate business information to facilitate business reporting of financial and nonfinancial data to users.
XBRL greatly enhances the speed and accuracy of business reporting.
Summary of Data Warehouses
Data warehouses serve as a repository of information that is separate from the operating databases of the firm to support decision making across a number of functions in the firm.
Summary of Data Marts
Data marts represent a slice of data from the data warehouse to meet a specific need.
Summary of Business Intelligence
Business intelligence uses computer-based techniques to accumulate and analyze data that might be helpful to the firm’s strategic initiatives
Summary of digital dashboards
Digital dashboards tracks critical firm performance in a way that is easily accessible to executives.
