Chapter 4: Data required for decision-making Flashcards
What is a relevant cash flow?
Future incremental cash flow
What future cash flows should be considered when making a decision?
Only future cash flows that occur as result of the decision should be considered
What should opportunity costs be included as?
Incremental cost
What are the 5 types non relevant costs?
Sunk or past costs
Absorbed Fixed overheads
Committed costs
Depreciation
Finance costs
What are sunk or past costs?
Costs that have already been incurred in the past
What are committed costs?
Costs that are unavoidable in the future
What is an opportunity costs?
Value of the best alternative that is foregone when a particular course of action is undertaken
What is data?
Data consists of numbers, letters, symbols, raw facts, events and transactions which have been recorded but not yet processed
What is information?
Information is data that has been processed in such a way that it has meaning to the person that receives it
What are the benefits of collecting, analysing and presenting high quality data?
Collaborative working - everyone working from the same data
Customer Insight
Risk management
Governance
What are the costs of collecting, analysing and presenting high quality data?
Software licenses costs
Software maintenance costs
IT training costs
User training costs
Integration costs
Redundant Infrastructure costs
What are the two categories that computer controls fall into?
Application controls
General controls
What are application controls?
Manual or automated procedures that apply to individual areas within the system to ensure the completeness, accuracy and validity of the recording and processing of transactions
What are general controls?
Policies and procedures that relate to many applications and support the effective function of application controls by helping to ensure the continued proper operation of information systems
What does the term business intelligence describe?
The technical architecture of systems that extract, assemble, store and access data to provide reports and analysis.
What is data analytics?
Complex analysis, data mining and predictive modelling enable by BI applications which can access both financial and non-financial data from the business’s data warehouse and external sources
What is data mining?
Process of sorting through data to identify patterns and relationships within a data set between different items.
What is a data lake?
Central location that holds a large amount of data in its native, raw format
What is structured data?
Data that is contained within a field in a data record or file
What is unstructured data?
Data that is not easily contained within structured data fields
