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110.249 - Accounting information systems > Week 7 - 12 study > Flashcards

Week 7 - 12 study Flashcards

1
Q

What is the five step systems development life cycle (SDLC) process? What does this process do?

A
  1. System analysis (incl feasibility)
  2. Conceptual design
  3. Physical design
  4. Implementation and conversion
  5. Operations and maintenance

SDLC is the process used to obtain and implement a new AIS.

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2
Q

What are the two PLANS that are required before the SDLC process is begun?

A

Project development plan - including cost/benefit analysis, development requirements, schedules etc.

Master Plan - What, How, Who (a more long range plan)

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3
Q

What two methods are used to ensure a plans objectives are being met in the time forecasted?

A

Program Evaluation and review technique (PERT) chart - shows a network of arrows and nodes (including a critical path which shows the path requiring the most amount of time)

GANTT Chart - a bar chart with activities on the left hand side and time across the top. like Microsoft project.

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4
Q

Why is feasibility analysis important? What are the different types of feasibility that should be considered?

A

Proper feasibility analysis ensures that projects are less likely to be cancelled or fail.

Different types of feasibility analysis include economic, technical, legal, scheduling and operational.

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5
Q

People can sometimes be very resistant to change. What are the three types of resistance that such people may use?

A
  1. Aggression - deliberate behaviours e.g. sabotage, increased error rates etc.
  2. Projection - Blaming a new system for everything that goes wrong
  3. Avoidance - ignoring the system in the hope that it will go away
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6
Q

What are some solutions to issues to resolve resistance to change in the context of developing or acquiring a new AIS?

A
  • obtain org. wide support through involvement
  • stress new opportunities
  • provide training
  • keep communication lines open
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7
Q

What are the five different activities that are usually undertaken in the systems analysis step (i.e. step one of SDLC)?

A
  1. initial investigation
  2. Systems Survey (questionnaires etc)
  3. Feasibility study
  4. Information needs and system requirements (by considering AIS objectives)
  5. Systems analysis report
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8
Q

What can be some of the problems that can occur if an AIS used to support REVENUE cycle activities is deficient?

A
  • customer service problems
  • ill marketing efforts
  • failure to identify profitable customers & markets
  • monitoring of credit accounts and cash collection procedures
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9
Q

What is a simple explanation of the revenue cycle? What is its primary objective?

A

Revenue cycle = a set of exchange transactions between the firm and its customers associated with providing goods and services to customers (GIVE) and collecting payment from them (GET).

Primary objective: to provide the right product in the right place at the right time for the right price.

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10
Q

What are the four basic activities that are performed in the revenue cycle?

A
  1. Sales order entry
  2. Shipping
  3. Billing and accounts receivable
  4. Cash collection
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11
Q

What are some of the main decisions that managers need to make in respect of the revenue cycle?

A
  • how much inventory to carry and where
  • should we deliver our products
  • how should we price our products
  • should we offer customers credit?
  • how can we process payments to maximize cash flow
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12
Q

What are the four tasks involved in the “sales order entry” activity in the revenue cycle?

A
  • take the order
  • approve credit
  • check inventory availability
  • respond to customer enquiries (to encourage loyalty through CRM)
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13
Q

What are the two tasks involved in the “Shipping” activity in the revenue cycle?

A
  • pick and pack (assisted with RFID)

- ship the goods

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14
Q

What are the two tasks involved in the “billing” activity in the revenue cycle?

A
  • invoicing

- update accounts receivable

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15
Q

What are the two commonly used methods of accounts receivable for billing?

A

Open invoice method - customers pay using a second copy of the invoice (remittance advice)

Balance forward method - customers pay based on amounts on monthly statements.

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16
Q

What are the three different methods of the “cash collections” activity in the revenue cycle?

A
  • Electronic lockbox i.e. a postal address where remittances are picked up. Electronic lock boxes are where data is sent from the bank directly to the company
  • Electronic Funds transfer
  • financial electronic data interchange (FEDI) - where remittance data and funds are exchanged simultaneously. e.g. countdown
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17
Q

Why is it important that the revenue cycle in an AIS provides both operational data and financial data?

A

so that information is useful for both managers and accountants.

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18
Q

What is the expenditure cycle? Why is it important?

A

Expenditure cycle - transactions between the firm and its suppliers associated with:

  • ordering goods (COMMITMENT)
  • receiving and storing good (GET)
  • paying suppliers (GIVE)

The exp cycle is important to ensure inventory, supplies and services are acquired and maintained at the lowest price.

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19
Q

What are some of the main decisions that managers need to make in respect of the EXPENDITURE cycle?

A
  • inventory management (how much, where)
  • where to source raw materials
  • payment terms to debtors (cash flow)
20
Q

What are the four activities in the expenditure cycle?

A
  1. ORDERING materials, supplies and services
  2. RECEIVING materials, supplies and services
  3. Approving customer invoices
  4. Payment
21
Q

What are three commonly used inventory management techniques?

A

Economic order quantity - inventory is based on an optimal order size (based on carrying costs, ordering costs etc). Often involves significant inventory levels.

JIT - inventory is only purchased in response to actual sales

Materials requirements planning (MRP) - less inventory is carried through accurate forecasting techniques

22
Q

What is a purchase requisition form?

A

A form used before an actual purchase order is created indicating a need for goods or services.

23
Q

What are the activities in the general ledger and reporting cycle? (GLARC)

A
  1. Update general ledger (using data from all other cycles)
  2. Post adjusting entries (accruals, deferrals, estimates, revaluations and corrections)
  3. prepare financial statements
  4. produce managerial reports
24
Q

What is XBRL?

A

Extensible business reporting language

A variant of XML designed specifically to communicate the contents of financial data.

25
Q

What is an integrated ERP system?

A

A system that includes the revenue, expenditure, production, HRM and GLAR cycles.

26
Q

What are the two ways in which an ERP can be acquired? (per Considine)

A

Single source - all system modules are provided by one vendor e.g. Xero + Xero add ons.

OR

Best of breed system - individual ERP components are chosen that have functionality that best suit the business.

27
Q

What are the three main functions of an internal control system?

A
  1. Preventative (deter problems)
  2. Detective (discover problems)
  3. Corrective (fix problems)
28
Q

What is the ERM model?

A

Enterprise risk management model = a comprehensive risk management approach that looks at 8 interrelated risk and control components and how they can be used to meet different company objectives across all company ‘units’.

29
Q

When assessing risk, what are the different types of risk?

A

Inherent - risks that exist before any plans are made to control it.

Residual - remaining risk after controls are in place to reduce it.

30
Q

What is the separation of accounting duties in the context of ERM control activities?

A

No one employee should be given too much responsibility.

the following three categories of duties should be kept separate:
Authorisation, recording (accounting info) and custody (handling cash)

31
Q

Contrast COSO (committee of sponsoring organisations of the Treadway commission) and COBIT (control objectives for information and related technology).

A

COSO addresses GENERAL internal control while COBIT addresses IT internal control.

32
Q

Describe an overview of the COBIT framework.

A

It shows that achieving an orgs business and governance objectives requires adequate controls over IT resources to ensure information provided to management satisfies the 7 key criteria for useful info.

33
Q

What are the four basic management activities in the COBIT cycle that are used to produce useful information?

A

PO - plan and organise
AI - acquire and implement
DS - deliver and support
ME - monitor and evaluate

34
Q

What are the 5 categories of systems reliability in the “Trust services framework”?

A
  1. Security (access) - the foundation of systems reliability. A management issue, not a technology isue.
  2. Confidentiality
  3. Privacy
  4. Processing integrity
  5. Availability

The Trust services framework focusses on systems reliability.

35
Q

What does the time-based model show in the context of IS security?

A

That the time taken to detect and respond to a security breach should be less than the time it takes an attacker to break through preventative controls.

36
Q

Contrast authentication and authorisation.

A

Authentication looks at the verification of who a person is.

Authorisation determines what a person can access.

37
Q

What are the four actions used to preserve confidentiality.

Note: these are the same controls used for PRIVACY as well!

A
  1. Identification of info and data to be protected
  2. Protecting confidentiality with encryption
  3. Control access to sensitive info
  4. Training
38
Q

What is encryption?

A

Encryption - the process of transforming normal content (plain text) into unreadable gibberish (cipher text). Decryption reverses this process.

39
Q

At what point does encryption provide control?

A

Encryption provides one last barrier that must be overcome by an intruder who has obtained unauthorized access to stored information.

40
Q

What are the three types of encryption?

A

Symmetric - one key used to both encrypt and decrypt. Fast but vulnerable.

Asymmetric - different keys used. Secure but slow.

Hybrid

41
Q

What is “hashing”?

A

When information is converted into ‘hashed’ code of a fixed length.

The code can not be converted into the text (i.e. it is a one way function)

42
Q

What is VPN?

A

Virtual private network - private communication channels (tunnels) which are accessible only to those parties possessing appropriate encryption and decryption keys.

43
Q

What are the three controls that ensure processing integrity (i.e. the fourth category of system reliability in the Trust services framework)?

A
  1. Input - garbage in, garbage out. Through form design and data entry controls.
  2. Process
  3. Output e.g. 4ir
44
Q

What are the two key controls used to ensure availability? (i.e. the fifth and final category of system reliability in the Trust services framework)?

A
  • minimise risk of downtime through preventative maintenance, data centre location etc.
  • recovery and resumption of normal operations through back up and business continuity plans (BCP’s)
45
Q

What is the difference between incremental and differential back up?

A

Incremental back ups only copy data that changed from the last partial backup while differential back up copies only data from the last full backup.

46
Q

What is a disaster recovery plan (DRP) and what are some of the factors that are considered when devising such a plan?

A

DRP= procedures to restore an organisations IT function in the event that its data centre is destroyed.

  • cold sites - an empty building pre wired for internet and telephone + a contract with vendors to provide all necessary equipment within a specified period of time.
  • Hot sites - prewired buildings that have all computing and office equipment ready to go.
  • Second data centre?
47
Q

What is RTO in the context of disaster recovery?

A

Recovery time objective i..e the amount of time in which an org would like to be able to recover its systems should a disaster occur.

110.249 - Accounting information systems (2 decks)

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