ADM 4346 - Midterm

Information System

Consists of interrelated components that captures raw data and organizes it to produce information

Business Model

A company's plan for making a profit

Types of Business Models

Franchise modelSubscription business modelPremium business modelPeer-to-peer business model

Types of Business Processes

Acquisition and payment processes

Conversion processes

Marketing, sales,

and collection processes

Business events

Create data that is captured by accounting IS

Transaction based systems

Used to record accounting information before more complex systems

Management Tasks

Planning

Implementing

Monitoring

Changing

and improving

Characteristics of Useful Information

Relevance and Faithful representation

Decision Context

Preferences, constraints, and other factors that affect how a decision is made

Reporting

Process of aggregating data into information on the activities and performance in a company

Data Analytics

Process of using technology to transform raw data into useful information

Online Transaction Processing System

System supports core business functions by handling sales, accounting, purchasing, and more

Online Analytical Processing System

Focus on leveraging the data for information

Executive Support Systems

Support strategic decision making and are a subset of decision support systems

Decision Support Systems

Assist in solving nonroutine problems and unstructured decision making

Management information Systems

Assist in routine management activities

Transaction Processing Systems

Process day-to-day business activities, provide a foundation for other systems, and capture day from higher levels systems

Batch Processing

Data is collected as it is generated and then is processed later

Real-time processing

Transaction is processed as it occurs and it requires the company to have high processing capabilities

Software

The interface between the components and the users

Systems Software

Specialized software that runs a computer's hardware and other software

Cloud Computing

Provides access to share resources over the internet, such as cloud computer processing, software applications, data storage, and other services

Types of Clouds

Private CloudPublic CloudHybrid Cloud

Software as a Service

Utilize the internet to provide customers with applications that are managed by the third-party provider

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

Infrastructure as a Service

Provides customers with fully self-service computers, networking, storage, and operating systems

Organic Growth

Occurs when a company uses its own resources and business process to increase sales, customers, and market share

Acquisition-based Growth

Occurs as a company purchases and integrates other companies into its infrastructure

Systems Integration

The process of joining different systems or subsytems into one larger system and ensuring that they function as one system

Lift and Shift

The company moves the acquired systems to the main data center so that users have access to all the systems simultaneously

Immediate Integration

Moving acquired data to be retired or migrated to the new systems immediately

Centralized System

Connects all users to one central location around a servers that all authorized users can access

Decentralized System

Utilizes multiple locations that each maintain a copy of the data needed for its connected systems

Distributed Systems

All the users and systems are directly connected to one another across the networks

Enterprise Resource Planning

A solution that integrates multiple systems into a single cohesive communication system in order to plan the use of company resources

Out-of-the box ERP

Preconfigured to work one way and will work that way immediately when implemented

Configurable ERP System

Has some add-ins and features that can be customized for customers' needs

Customizable ERP

Features are fully customized for an individual customer's needs

Unfavourable event

Anything that can possibly hinder the success of a business

Risk

The likelihood of an unfavourable event occurring

Portfolio View

Examines risk at the entity level

Profile view

Considers risk at the more granular level of a business function, process, or event

Enterprise Risk Management

The comprehensive process of identifying, categorizing, prioritizing, and responding to a company's risks

Risk Identification

Identify existing risks and their outcomes

Risk Statement

Contains the issue and the possible outcome

Risk Categorization

Categorizing risks based on their types

Internal Risks

Occur throughout the company's operations and arise during normal operations

External Risks

Risks that come from outside the company

Risk Prioritization

Selection which risks are most likely to occur or which will have the largest impact

Risk Inventory

· Listing of all the business's known risks

Risk Severity

The likelihood of risks occurring and their potential impact on the company

Risk Response

Decide how the company will address the prioritized risks

Risk Management

Requires critical thinking and decision-making skills to understand the entire situation and come up with the appropriate combination of risk responses

Risk appetite

The amount of risk a company is willing to take on at a particular time

Risk Acceptance

Occurs when an inherent risk is present but the organization chooses not to act

Risk Mitigation

When a company decides to accept the risk but to minimize its impact if it occurs

Risk Transfer

The shifting of a risk to a third part

Risk Avoidance

Eliminates the risk by completely avoiding the events causing the risk

Internal Control

A process that specifically mitigate risks to the company's financial information

Preventive Controls

Prevent problems from happening by limiting the risk from occurring

Detective Controls

Alert management to an issue once it has occurred

Corrective Controls

o Change undesirable outcomes and occur after a risk has occurred

Management override

When internal control activities don't work because management is not following policy or procedure

Collusion

When two employees work together to circumvent controls

Time-Based Model of Controls

Measures the residual risk for technology attacks by comparing the relations of the three control functions

Physical Controls

Governs human activities

IT General Controls

Apply to the entire operation of the full system and its environment

IT Application Controls

Controls that only application to a specific application

Manual Controls

Requires human judgement or physical interaction

Automated Controls

Use Technology to employment a control

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

Lines of Defense

o First Line of defense - Business Operationso Second Line of defense - Risk Management and Complianceo Third Line of defense - Internal Audit

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

Phase 1 - Limited

A company's business processes are poorly defined, which means employees may use multiple ways to achieve the same outcome

Phase 2 - Informal

Some processes and controls are defined, but documentation, inconsistencies, and reliance on key individuals still exist

Phase 3 - Defined

Policies, procedures, and controls are formally documented, which creates a consistent environment where key employees are no longer relied on

Phase 4 - Optimized

Gold Standard in the business process maturity

Internal Audit

Adds value to a business by providing assurance, insight, and objectivity to the company

Assurance

Ensures that the organization is operating with management's plan

Insight

Discovers improvements for policies, procedures, controls, and risk management

Objectivity

Assesses the company from an independent consulting point of view

Framework

A published set of specifications and criteria that defines a strategy to achieve certain objectives

Sarbanes-Oxley Act of 2002

Created to protect investors from fraud and other risks by improving the reliability and accuracy of financial statements

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

Control Objectives

Three areas where the internal control - integrated framework focuses on achieving results- Operations objectives- Reporting objectives- Compliance objectives

COSO ERM Framework

A set of five interrelated components that highlight the importance of risk in creating strategies and driving a company's performance

Data

Consists of facts and statistics about a person or object that are collected for reference or analysis

Data Elements

BitByteFieldRecordFileDatabase

Structured Data

Organized and fits nicely into tables

Unstructured Data

Doesn't fit into traditional table

Web 2.0

Refers to user-generated content and user participation on the internet

Static data

Doesn't change once it's created

Dynamic data

May change after it is recorded and must be updated

Database

A set of logically related files that contains an organization collection of data that is accessible for fast searching and retrieval

Relational databases

Organize structured data in interrelated tables which are connected by similarities between tables

Vertical Scaling

Increases the size of machine

Horizontal Scaling

Increases with the number of machines

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

Data Warehouse

Designed specifically for reporting and data analysis and contains relevant data that has already been transformed for reporting use

Big data

Refers to extremely large and complex data sets that can be analyzed using recent technological innovations to reveal patterns and associations