Systems Exam 1

What does AIS stand for?

Accounting Information System

What is an AIS?

a system that records, processes, and reports on transactions to provide financial and non-financial information to make decisions and have appropriate levels of internal controls for those transactions

What are internal controls?

security measures to protect sensitive data

Why is AIS important?

it provides information that companies are required to have and also information that can be used to make important decisions

What type of information resides in AISs?

transactions, account balances, descriptive information (metadata)

What are the attributes of useful information?

relevance and faithful representation

What is relevance?

information capable of making a difference in a decision

What are the attributes of relevance?

materiality, predictive value, confirmatory (or feedback) value

What are the attributes of faithful representation?

completeness, neutrality, free from error

What is faithful representation?

information produced accurately reflects the condition of the business

What is data?

simply raw facts that describe an event and have little meaning on their own

What is information?

data organized in a meaningful way to be useful to the user. data serves as an input

What is information overload?

too much information causes information overload, decision making is hindered

What is the order of the information value chain?

transformation of data to decisions, business need / event, data, information, knowledge, decision

What is discretionary information?

information that is not required by law; managers must decide if the benefits of info outweigh the costs of obtaining the info

What is mandatory information?

information that is required by law; since it is required, managers may choose to minimize the costs of producing this info

What is a CISA?

Certified Information Systems Auditor

Who is the certifying body of the CISA certification?

ISACA

What do CISAs do?

perform IT audits

What is a CITP?

Certified Information Technology Professional

Who is the certifying body of the CITP certification?

AICPA

What do CITPs do?

work to effectively and efficiently manage information while ensuring the data’s reliability, security, accessibility and relevance

What is the Certified Internal Auditor certification?

globally accepted certification for internal auditors?

What is the certifying body for the Certified Internal Auditor certification?

IIA

What are the CPA sections?

education, experience, exam, ethics

How long is the CPA exam?

30 months

What is the order of the primary activities in the value chain?

inbound logistics, operations, outbound logistics, marketing, service

What is the order of support activities in the value chain?

procurement, IT, HR, infrastructure

What are inbound logistics?

the activities associated with receiving and storing raw materials and other partially completed materials and distributing those materials to manufacturing when and where they are needed

What are operations?

the activities that transform inputs into finished goods and services

What are outbound logistics?

the activities that warehouse and distribute the goods to the customers

What are marketing and sales activities?

identify the needs and wants of their customers to help attract them to the firm’s products and buy them

What are service activities?

provide the support of customers after the products and services are sold to them (e.g. warranty repairs, parts, instruction manuals)

What are procurement activities?

involve purchasing inputs such as raw materials, supplies, and equipment

What are human resource management activities?

recruiting, hiring, training and compensating employees

What are technology activities?

all of the technologies to support value-creating activities. these also include research and development to develop new products or research and development to determine ways to produce products at a cheaper price

What are firm infrastructure activities?

all of the activities needed to support the firm, including the CEO, finance, accounting, and legal

What does a Financial Reporting System consist of?

GL, Accounting Transactions, journal entries, journals, and sub-ledgers

What does a financial reporting system do?

summarizes the accounting transactions in financial reports, including financial statements, footnotes, and related disclosures

What does a human resource management system do?

records and tracks interactions of a company’s employees

What does a human recourse management system consist of?

employee records, payroll, benefits, attendance, career progression, performance evaluation

What is an enterprise system (ES)?

a centralized database that collects data from throughout the company including orders, customers, sales, inventory, and employees

Why an ERP important?

it allows information across the business to be available to everyone within the company in a useful and timely way

What can an ERP do?

take an order from a customer, fill the order, ship it, and then create an invoice to bill the customer

What is the supply chain?

the flow of materials, information, payments, and services from suppliers all the way through the customer

Supply chain management can be used for what?

optimizing processes within the supply chain

determining levels of inventory in stock and the amount to be ordered

determine timing to transferring inventory

What is customer relationship management used for?

used to manage interactions with customers and may include the following:

tracking customer purchases

ensuring customer satisfaction

product placement

What is a business process?

a defined sequence of business activities that use resources to transform specific inputs into specific outputs to achieve a business goal

What is a business analysis?

the process of defining business process requirements and evaluating potential improvements

What is a business model?

a simple abstract representation of one or more business processes; allows us to depict the important features of business processes and systems clearly and concisely

What is documentation?

explains how business processes and business systems work; a tool for information transmission and communication

What are examples of documentation?

business process models, business rules (internal controls), software manuals, organization charts, schedules, strategic plans

What did the Sarbanes-Oxley Act of 2002 do?

made documentation essential for businesses

What does the Sarbanes-Oxley Act of 2002 require managers to do?

assess and attest to the business’ internal control structure and procedures

What does the Sarbanes-Oxley Act of 2002 require external auditors to do?

audit management’s assessment of the effectiveness of internal controls and express an opinion on the company’s internal control over financial reporting

What does documentation support?

employee training, internal and external audit requirements, accountability, standardized communication within the enterprise, standardized communication between the enterprise and its customers suppliers and other stakeholders

What are the four major areas companies focus on for continuous improvement?

Effectiveness — are the outputs obtained as expected?

Efficiency — can outputs be produced with fewer inputs?

Internal Control — are the controls working?

Compliance — does the process comply with constantly changing local, state, federal, and internal laws and regulations

What should workflow models be able to describe?

1. events that start, change, or stop flow in the process

2. activities and tasks within the process

3. the sequence of flow between tasks

4. decision points that affect the flow

5. division of activity depending on organizational roles

Activity models are tools for what?

planning, documenting, discussing, and implementing systems

What do activity models represent?

the sequential flow and control logic of a set of related activities

What does BPMN stand for?

Business Process Model and Notation

Who maintains the BPMN specifications?

the Object Management Group

What do events include in a BPMN?

include start, intermediate, and end events. intermediate events affect the flow of a process, but do not start or end the process

What do activities represent in a BPMN?

specific steps; generally described with a short verb phrase of two or three words

What do pools do in a BPMN?

identify organizations; must include one start and at least one end

What do lanes do in a BPMN?

identify departments or individuals within an organization; tasks/activities are placed in lanes to show responsibility

What are messages flows in a BPMN?

exchanges between two participants (pools) in the same process; shown as dashed lines with an arrow on the destination end and a small circle on the source end

What doesn’t traverse message flows?

token concepts

What is an exclusive gateway?

only one path can be taken out of the gateway

How is an exclusive gateway represented?

a blank diamond or a diamond with an X

How is an inclusive gateway represented?

a diamond with a circle

What is an inclusive gateway?

one or more paths can be taken out of the gateway

How is a parallel gateway represented?

a diamond with a +

What is a parallel gateway?

all paths are taken out of the gateway

What is a start message (catch) event?

used to begin a process based on an incoming message, such as a sales order. can only receive messages and not send them

What are intermediate message events?

indicate that the process sends or receives a messages from an external participant

What is an end message (throwing) event?

indicates that the process sends a message when it ends. can only send messages and not receive them

What is a start timer event?

used to indicate a process that starts at a particular time or date, such as creating monthly budgets

What is an intermediate timer event?

indicates a delay in the process flow until a specific time or date or for a specified period

What is an intermediate error event?

indicates the alternative process flow when an error occurs in an activity

What is a collapsed subprocess?

contains other detailed processes that are hidden from view. the details are normally show in another diagram

What is an expanded subprocess?

embeds the subprocess in the current process

What is a looping task?

repeats until a condition is satisfied, such as until all email in the inbox is checked

What is a parallel multi-instance task?

performed several times at the same time, such as when several different people perform the same task at the same time in the same process

What is a sequential multi-instance task?

performed several times in a sequence, such as when an instructor grades tests for several students

What are the steps to prepare business process models?

identify the purpose of the model

define the model context

outline basic process flows

define activities in the process

refine and decompose activities as necessary

validate with stakeholders

What does UML stand for?

Unified Modeling Language

What are the building blocks for UML Class Diagrams?

classes, associations, multiplicities

What are classes?

separately identifiable collections of things about which the organization wants to collect and store information

What are associations?

depict the relationship between two classes

What can classes represent?

resources (trucks, cash, buildings, investments), persons (customers, employees), events (sales, purchases), conceptual structures (accounts, budgets)

What are multiplicities?

describe the minimum and maximum number of times instances of one class can be associated with instances in another class

What are attributes?

data elements that describe the characteristics of instances in a class (or rows in a table)

What are included in attributes?

primary keys that uniquely define instances of the class, foreign keys that support links between classes shown in the associations, and other data elements for each class

What is a primary key?

an attribute or combination of attributes that uniquely identifies each instance in a class or row in a table

Who should the primary key be controlled by and why?

the organization that assigns it so it will not change over time

What should you not use as a primary key?

items that may be NULL, change, or missing

What are foreign keys?

an attribute or combination of attributes that allows tables to be linked together

eligibility

Is this individual or organization eligible for this product or service?

validation

Is this claim valid for processing?