Consists of interrelated components that captures raw data and organizes it to produce information
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Business Model
A company's plan for making a profit
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Types of Business Models
Franchise modelSubscription business modelPremium business modelPeer-to-peer business model
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Types of Business Processes
Acquisition and payment processes
Conversion processes
Marketing, sales,
and collection processes
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Business events
Create data that is captured by accounting IS
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Transaction based systems
Used to record accounting information before more complex systems
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Management Tasks
Planning
Implementing
Monitoring
Changing
and improving
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Characteristics of Useful Information
Relevance and Faithful representation
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Decision Context
Preferences, constraints, and other factors that affect how a decision is made
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Reporting
Process of aggregating data into information on the activities and performance in a company
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Data Analytics
Process of using technology to transform raw data into useful information
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Online Transaction Processing System
System supports core business functions by handling sales, accounting, purchasing, and more
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Online Analytical Processing System
Focus on leveraging the data for information
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Executive Support Systems
Support strategic decision making and are a subset of decision support systems
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Decision Support Systems
Assist in solving nonroutine problems and unstructured decision making
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Management information Systems
Assist in routine management activities
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Transaction Processing Systems
Process day-to-day business activities, provide a foundation for other systems, and capture day from higher levels systems
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Batch Processing
Data is collected as it is generated and then is processed later
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Real-time processing
Transaction is processed as it occurs and it requires the company to have high processing capabilities
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Software
The interface between the components and the users
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Systems Software
Specialized software that runs a computer's hardware and other software
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Cloud Computing
Provides access to share resources over the internet, such as cloud computer processing, software applications, data storage, and other services
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Types of Clouds
Private CloudPublic CloudHybrid Cloud
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Software as a Service
Utilize the internet to provide customers with applications that are managed by the third-party provider
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Platform as a Service
Provides customers a platform for software development that is delivered remotely. Developers have access to maintained operating systems, servers, storage, and networks
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Infrastructure as a Service
Provides customers with fully self-service computers, networking, storage, and operating systems
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Organic Growth
Occurs when a company uses its own resources and business process to increase sales, customers, and market share
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Acquisition-based Growth
Occurs as a company purchases and integrates other companies into its infrastructure
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Systems Integration
The process of joining different systems or subsytems into one larger system and ensuring that they function as one system
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Lift and Shift
The company moves the acquired systems to the main data center so that users have access to all the systems simultaneously
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Immediate Integration
Moving acquired data to be retired or migrated to the new systems immediately
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Centralized System
Connects all users to one central location around a servers that all authorized users can access
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Decentralized System
Utilizes multiple locations that each maintain a copy of the data needed for its connected systems
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Distributed Systems
All the users and systems are directly connected to one another across the networks
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Enterprise Resource Planning
A solution that integrates multiple systems into a single cohesive communication system in order to plan the use of company resources
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Out-of-the box ERP
Preconfigured to work one way and will work that way immediately when implemented
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Configurable ERP System
Has some add-ins and features that can be customized for customers' needs
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Customizable ERP
Features are fully customized for an individual customer's needs
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Unfavourable event
Anything that can possibly hinder the success of a business
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Risk
The likelihood of an unfavourable event occurring
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Portfolio View
Examines risk at the entity level
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Profile view
Considers risk at the more granular level of a business function, process, or event
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Enterprise Risk Management
The comprehensive process of identifying, categorizing, prioritizing, and responding to a company's risks
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Risk Identification
Identify existing risks and their outcomes
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Risk Statement
Contains the issue and the possible outcome
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Risk Categorization
Categorizing risks based on their types
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Internal Risks
Occur throughout the company's operations and arise during normal operations
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External Risks
Risks that come from outside the company
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Risk Prioritization
Selection which risks are most likely to occur or which will have the largest impact
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Risk Inventory
· Listing of all the business's known risks
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Risk Severity
The likelihood of risks occurring and their potential impact on the company
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Risk Response
Decide how the company will address the prioritized risks
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Risk Management
Requires critical thinking and decision-making skills to understand the entire situation and come up with the appropriate combination of risk responses
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Risk appetite
The amount of risk a company is willing to take on at a particular time
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Risk Acceptance
Occurs when an inherent risk is present but the organization chooses not to act
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Risk Mitigation
When a company decides to accept the risk but to minimize its impact if it occurs
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Risk Transfer
The shifting of a risk to a third part
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Risk Avoidance
Eliminates the risk by completely avoiding the events causing the risk
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Internal Control
A process that specifically mitigate risks to the company's financial information
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Preventive Controls
Prevent problems from happening by limiting the risk from occurring
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Detective Controls
Alert management to an issue once it has occurred
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Corrective Controls
o Change undesirable outcomes and occur after a risk has occurred
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Management override
When internal control activities don't work because management is not following policy or procedure
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Collusion
When two employees work together to circumvent controls
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Time-Based Model of Controls
Measures the residual risk for technology attacks by comparing the relations of the three control functions
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Physical Controls
Governs human activities
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IT General Controls
Apply to the entire operation of the full system and its environment
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IT Application Controls
Controls that only application to a specific application
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Manual Controls
Requires human judgement or physical interaction
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Automated Controls
Use Technology to employment a control
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Continuous Monitoring Technology
Use of detective controls that use rules-based programming to create detective controls that use rules-based programming to monitor the business' data for red flags of risk
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Lines of Defense
o First Line of defense - Business Operationso Second Line of defense - Risk Management and Complianceo Third Line of defense - Internal Audit
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Maturity Model
Show how far along a company is on its journey to reach the ideal state by comparing the current state to a predetermine set of best practices
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Phase 1 - Limited
A company's business processes are poorly defined, which means employees may use multiple ways to achieve the same outcome
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Phase 2 - Informal
Some processes and controls are defined, but documentation, inconsistencies, and reliance on key individuals still exist
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Phase 3 - Defined
Policies, procedures, and controls are formally documented, which creates a consistent environment where key employees are no longer relied on
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Phase 4 - Optimized
Gold Standard in the business process maturity
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Internal Audit
Adds value to a business by providing assurance, insight, and objectivity to the company
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Assurance
Ensures that the organization is operating with management's plan
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Insight
Discovers improvements for policies, procedures, controls, and risk management
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Objectivity
Assesses the company from an independent consulting point of view
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Framework
A published set of specifications and criteria that defines a strategy to achieve certain objectives
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Sarbanes-Oxley Act of 2002
Created to protect investors from fraud and other risks by improving the reliability and accuracy of financial statements
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Internal Control - Integrated Framework
A controls-based approach to risk management that is widely accepted as the authoritative guidance on internal controls and SOX compliance
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Control Objectives
Three areas where the internal control - integrated framework focuses on achieving results- Operations objectives- Reporting objectives- Compliance objectives
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COSO ERM Framework
A set of five interrelated components that highlight the importance of risk in creating strategies and driving a company's performance
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Data
Consists of facts and statistics about a person or object that are collected for reference or analysis
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Data Elements
BitByteFieldRecordFileDatabase
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Structured Data
Organized and fits nicely into tables
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Unstructured Data
Doesn't fit into traditional table
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Web 2.0
Refers to user-generated content and user participation on the internet
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Static data
Doesn't change once it's created
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Dynamic data
May change after it is recorded and must be updated
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Database
A set of logically related files that contains an organization collection of data that is accessible for fast searching and retrieval
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Relational databases
Organize structured data in interrelated tables which are connected by similarities between tables
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Vertical Scaling
Increases the size of machine
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Horizontal Scaling
Increases with the number of machines
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Data lake
Vast pool of data as it is designed to contain all a company's data and acts as a central repository for data
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Data Warehouse
Designed specifically for reporting and data analysis and contains relevant data that has already been transformed for reporting use
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Big data
Refers to extremely large and complex data sets that can be analyzed using recent technological innovations to reveal patterns and associations
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