Accounting Systems and Internal Control

These flashcards cover key concepts from the lecture notes on accounting systems, transaction processing, and internal control.

Globalisation

The process by which businesses develop international influence or operate on an international scale.

Deregulation

The removal or reduction of government regulations controlling how businesses can operate.

Metcalfe's Law

The principle that the value of a network is proportional to the square of the number of connected users.

Moore's Law

The observation that the number of transistors on a microchip doubles approximately every two years, leading to an increase in computing power.

System

A set of two or more interrelated components interacting to achieve a goal.

Goal Conflict

Occurs when components act in their own interest without regard for the overall goal.

Goal Congruence

Occurs when components acting in their own interest contribute toward the overall goal.

Data

Facts that are collected, recorded, stored, and processed - insufficient for decision making.

Information

Processed data used for decision making; excessive information can lead to data overload.

Relevant Information

Information that reduces uncertainty, improves decisions, or confirms/corrects prior expectations.

Reliable Information

Information that is free from error or bias and accurately represents an organization's activities.

Timely Information

Information provided in time for decision makers to make decisions.

Transaction

An agreement between two entities to exchange goods or services or any other measurable economic event.

Nexus of Contracts

A conceptual view of the firm as a network of contracts among various stakeholders.

Revenue Cycle

The set of activities involved in selling goods or services and collecting payments.

Expenditure Cycle

The set of activities involved in purchasing goods or services and making payments to vendors.

Accounting Information System (AIS)

A system that collects, processes, and stores data and reports information to support decision making.

Value Chain

The set of activities that a product or service goes through before being sold to a customer.