Lecture 4 + 5 - Conversion and Reporting Business Processes

Question 1

Describe the different inventories in prod. firms

Answer 1

Explanations:
- Mat. issues: Quantity mat. issued from raw mat. to prod
- Timesheets: Hours worked to convert raw mat. to finished goods
- Prod OH: Costs in man. process w. no direct link to specific output unit: Eg. Electricity or personnel

Question 2

Describe the generic model of a conversion process

Answer 2

• No external agents: Differ from sales & purchase
• Dualities since both want to know actual & standard use: Variances

Question 3

Describe the integrated model including both conversion, purchases & sales

Answer 3

To avoid redundancy data

Question 4

(!) Describe a data warehouse & its benefits

Answer 4

General:
- Info collection
- From in- & external databases
- Facilitate reporting for DM & business analysis
- Main depot of firms historical data: Past performance
- Often designed for MA
- Many data marts: Subset info for specific purpose or function
- Repository of corporate memory
- Good for variance analysis

Benefits:
- Easy & quick info comparison
- Data stored safely
- Separate from operational database
- Dont affect operational performance
- Work w. CRM & SCM
- Support Decision support system / DSS
- Hinder outdated data

Question 5

(!) Describe business intelligence

Answer 5

General:
- Computer-based technique
- Accumulate data from database & warehouse
- Analyze data to support DM
- Web crawler: Systematic browse WWW to collect info
- Eg. Track cost of flight snacks
- Eg. Current stock market condition to assess firm performance

Three steps:
- 1. Gather info: In- & external
- 2. Analyze data: Understand pattern
- 3. Make decisions: On info basis

Question 6

(!) Describe data mining

Answer 6

• Technique to analyze data for BI
• Use statistical techniques to extract & analyze data from large databases
• Find unknown patterns & trends
• Only statistical relationships: Maybe false correlations. Add common sense.
• Often used in stock market analysis
• Limits of statistical relations: Causality vs. correlation
• Ref. Big data

Question 7

(!) Describe digital dashboards

Answer 7

• Track firm process, performance indicators & metrics
• Easy to read most important things
• Track critical firm performance
• Real time KPI´s
• Poss. to incl. non-financial measures

Question 8

(!) Describe Extensible business reporting language / XBRL & its benefits

Answer 8

General:
- Global std. of computer language format for financial reporting
- Basis: XML: Std. for internet comm. btw. firms
- Both financial & non-financial data
- Mostly for auditing students
- Often supported by ERP
- Standard report: Regulators
- Specialized report: Financial analyst
- Help firms communicate

Benefits:
- Enhance speed
- Enhance accuracy
- Good for preparation, analysis & communication

Uses:
- Report on firm web site
- File to regulators: SEC & IRS
- Info to stakeholders: Analysts, loan officers & investors
- Communicate business info electronically to users

Beliefs:
- Most current, standard XBRL used
- Reliable financial & non-financial underlying measures
- XBRL is accurate & precise
- Reports on XBRL are complete & on timely basis

___________

Standard reports:
- To regulators
- Eg. 10k going to SEC
- Eg. Tax return going to IRS

Specialized reports:
- Specific data for financial analysts

Needed assurances:
- Most current, standardized XBRL taxonomy used
- Reliable financial & non-financial data used for XBRL tagging
- Complete & timely reports

__________

Facts:
- Wanted reported in XBRL website

XBRL taxonomy:
- Definition
- Define & describe each key data element
- Eg. Total assets

XBRL instance documents:
- Content
- Contain actual dollar amounts or details of each elements within XBRL database

XBRL style sheets:
- Presentation
- Readable when applied
- Make things readable: Eg. Visions
- Take instance doc. & add presentation elements so readable by humans
- Company specific one for firm & website
- Standardized on for regulators use w. only needed info
- Own style sheet for analysts accessing financial & non-financial info
- Internal users use these for reports or access to data

Reporting:
- Show the style sheet

Question 9

(!) Describe the model of data warehouse design

Answer 9

Eks. AU: Internal: Grades

Question 10

(!) Describe the process of XBRL

Answer 10

General:
- Often country-specific

Tagging:
- Important
- Assigning tags
- Ref. Elements under taxonomy
- Automatic by XBRL or manually tag ERP system info
- Can destroy accuracy if not tagged the right way
- Secure properly definitions

Internal use:
- MA reports

External use:
- Mostly for this
- Advantage of standardization

Question 11

(!) Describe the global ledger (GL) taxonomy of XBRL

Answer 11

General:
- Definition: GL
- Facilitate efficient comm. within firm
- Things needed to be filled by content
- Eg. Account charts, journal entries or historical transactions

Benefits:
- Reporting independent
- System independent: Not only for special employees
- Allow consolidation: Eg. Transfer ledger from one system to other
- Provide flexibility: Extensible, multinational solutions that exchange data required by internal finance, accountants & creditors