Chapter 4: Software and Systems

All accounting information systems are

transaction processing systems.

One company's purchase of all or the majority of another company's shares to gain control over that company.

Acquisition

Growth in a company that occurs as the company purchases and integrates other companies into its infrastructure.

Acquisition-based growth

An example of an Internet of Things (IoT) technology is

Amazon's Alexa connecting to a task management system.

An end-user program that performs specific functions. Application software may be designed for general use and available for purchase through digital downloads. It may also be custom developed for a specific function. Also called an App.

Application software

In a transaction processing system, a type of processing in which data is collected as it is generated and then is processed later, at a scheduled time. Because transactions are processed together in a batch—whether at the end of a day, week, or month—batch processing is most suitable for transactions that are not time sensitive.

Batch processing

An information system that connects all users to one central location that is built around a server or cluster of servers that all authorized users can access. All the network's main business processing occurs at, and business information is stored in, that one place.

Centralized system

A type of computing that provides access to shared resources over the internet, such as computer processing, software applications, data storage, and other services. In the business context, cloud computing allows companies to minimize computer resources kept on hand, which can be expensive to both purchase and securely store. The costs are absorbed by the cloud provider, which maintains the physical equipment at its facility and provides access to customers via the cloud network.

Cloud computing

A control that can be used to reduce risk when more expensive or more complex controls are not available.

Compensating control

An enterprise resource planning (ERP) system that has some add-ins and features that can be customized for customers' needs.

Configurable ERP system

An ERP system module that captures and stores all customer information. It captures communication with customers like emails and phone calls and can generate leads of prospective customers for sales team members to contact.

Customer Relationship Management (CRM) module

An enterprise resource planning (ERP) system in which the features are fully customized for an individual customer's needs.

Customizable ERP system

An information system that, rather than having a single location, utilizes multiple locations that each maintain a copy of the data needed for its connected systems. In a decentralized network, there are multiple access points for users, but not all users are connected to all access points. Decentralized systems may be used when there are regional offices that process data, then summarize it and communicate the data back to headquarters.

Decentralized system

An information system that assists in solving nonroutine problems and unstructured decision making.

Decision support system (DSS)

An information system in which all the users and systems are directly connected to one another across the network. In a distributed system, the processing and databases are distributed among several business locations. All users have access to all data, depending on their user access privileges, and all users are connected throughout the business.

Distributed system

A specific capability for a business process within an ERP system module. Each feature is specifically designed to support the unique requirements of its business processes. Accounts Receivable is an example of a feature within the Financial module of an ERP system.

ERP feature

A function within an ERP system. ERP modules can be purchased as a full, all-inclusive package or individually to create custom combinations that meet the business's needs.

ERP module

Which of the following statements about ERP systems is not true?

ERP systems have multiple databases.

A solution that offers a single system with aggregated parts that meet the needs of each business function. An ERP system integrates multiple systems into a single, cohesive communication system.

Enterprise resource planning (ERP)

An information system that supports strategic decision making. ESS are a subset of decision support systems.

Executive support system (ESS)

An ERP system module that manages detailed employee records, training and development, and even time tracking. The HRM module must communicate with the Financial module because employee data and timekeeping are in the HRM module, while payroll processing is in the Financial module.

Human Resources Management (HRM) module

A method of developing software in which the software is programmed by a company's own software developers, from scratch.

In-house development

What is not an element of a distributed system?

It has a central location for data processing and storage.

The combination of two separate companies into a new legal entity. In a merger, one of the companies generally maintains its leadership and operating environment

Merger

An acquisition in which the acquiring company moves the acquired systems, physically placing the systems' servers in the data center and maintaining the existing systems as they are. Users have access to all the systems simultaneously. Lift and shift is one of the easiest and lowest-cost ways to integrate systems.

Lift and shift

An information system that assists in routine management activities.

Management information system (MIS)

An enterprise resource planning (ERP) system that is preconfigured to work one way and that will work that way immediately when implemented. Customers are expected to adapt their business processes to match the system's existing configuration.

Out-of-the-box ERP system

An information system that focuses on leveraging data for information.

Online analytical processing (OLAP)

An information system that supports core business functions by handling sales, accounting, purchasing, and more.

Online transaction processing (OLTP)

Systems software that supports a computer's basic functions, such as task management, executing applications, and even starting up and shutting down. Two widely used operating systems are Microsoft Windows and Apple macOS.

Operating system (OS)

Growth in a company that occurs when the company uses its own resources and business processes to increase sales, customers, and market share.

Organic growth

An ERP system module that manages production activities, including machine operations and scheduling. The Production module should communicate seamlessly with the Supply Chain Management module.

Production module

A written set of coded instructions that a computer system understands. These instructions can be as simple as opening a file or as complex as performing calculations for a rocket to land on the moon. Structured Query Language (SQL) is an example of a programming language that an accounting professional might use.

Programming language

In a transaction processing system, a type of processing a transaction is processed as it occurs. This requires the company to have high processing capabilities readily available.

Real-time processing

Successful ERP systems support the core business processes in a company's operations. Every function within the ERP is called a module. Listed below are four key features. Which is a key feature of the sales management module?

Receive Payment

An ERP system module that tracks orders from the time they are received from customers through shipment of products. It is important for the Sales Management module to communicate with the Supply Chain Management and Production modules because sales requirements drive what production will prioritize and when.

Sales Management module

The interface between hardware components and users that governs how the other components work with one another and provides users with the means of interacting with the system. Software includes mobile apps and internet browsers.

Software

An ERP system module that coordinates the entire supply chain, from purchasing of raw materials and supplies to inventory management and warehousing. It also has the ability to manage supplier relationships.

Supply Chain Management (SCM) module

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

Systems integration

Specialized software that runs a computer's hardware and other software. Systems software is a platform for other software that coordinates all the activities throughout the system.

Systems software

An information system that processes day-to-day business activities, provides a foundation for other systems, and captures data that is fed through the higher-level systems.

Transaction processing system (TPS)

How can an owner of a small business reduce risk when segregation of duties is not feasible because the cost exceeds the benefits?

Use compensating controls

The Northwest regional office in Seattle stores all the sales transaction data for its region and only reports aggregated numbers for financial reporting purposes to the corporate office in Houston. If someone in Houston needs to see the detailed transactions, they would need to access the regional system in Seattle. This is ____________ systems configuration.

a decentralized

Logical access controls prevent access to

computer systems.

Increasing sales, customers, and market share by using the company's own resources and business processes is called

organic growth.

A ____________ manages the data and information flow across the hardware components and is the interface between the hardware components and the users.

software