Chapter 14 - Development in technology

Question 1

What is cloud computing?

Answer 1

Provides a business with computing resources such as software and storage using a network of remote servers hosted on the internet

Question 1

What are common features of cloud computing systems?

Answer 1

1. Cloud systems can be either private or public
   - Public systems sell services to anyone on the internet
   - A private system is a proprietary closed system for a limited set of users
2. They are elastic so users can use as little or as much as they need
3. The service will be fully managed by the provider in the case of public system

Question 2

What is cloud accounting?

Answer 2

One application of cloud computing. Accounting software is provided in the cloud by a service provider rather than running the software on a local server

Question 3

What examples of the internet of things?

Answer 3

• Home automation: Lighting, heating, security systems enabled through smart technology and home assistant
• Vehicles and transport: Connected cars and live traffic monitoring, allow improved fleet management and planning. Self-driving vehicles

Question 4

What are digital assets

Answer 4

Any text or data file that is formatted into a binary source which includes the right to use it; digital files that do not carry the right are not considered digital assets

Question 5

What are two examples of digital assets

Answer 5

• Media assets
• Textual contents

Question 6

What is distributed ledger technology

Answer 6

Allow people or organisations that do not know each other to trust a shared record of events

Question 7

What are the key features of distributed ledger technology

Answer 7

• Distributed ledger has no central storage and is shared by all parties who require access, each having an identical copy of the ledger
• Different parties add to the shared record and procedures e.g. blockchain to ensure information is valid before it’s accepted
• What is a lack of a central administration is the main advantage of the technology as it prevents any one party from dominating or corrupting the process
• Security is provided through cryptographic keys and clear signatures of all transactions

Question 8

What is blockchain

Answer 8

Type of database that stores information together in blocks that are chained together. It is a process used to ensure only valid information is recorded in distributed ledger.

Question 9

What is the blockchain process?

Answer 9

1. New transactions
2. New transactions is then transmitted to a network to peer-peer computers scattered across the world
3. The network of computers then solves equations to confirm the validity of the transactions
4. Once confirmed to be legitimate transactions, they are clustered together into blocks
5. These blocks are then chained together creating a long history of all transactions that are permanent
6. Transaction is complete

Question 10

What are fintechs?

Answer 10

Software and other technologies that provide automated and improved financial servicesW

Question 11

What are the examples of fintechs

Answer 11

• Crowd funding
• Peer to peer lending e.g. zopa
• Online currency conversion
• Digital wallets e.g. Apple Pay

Question 12

What is a crypto currency

Answer 12

Digital tokens that allow online trading. There is no third party (bank) so it is similar to paying with cash

Question 13

What are features of crypto currencies?

Answer 13

• Use distributed ledgers and blockchain to record the transfers
• Keep currency in a digital wallet
• Price of currency in volatile
• Risks of hacking the online wallet
• Opportunities for money laundering due to privacy levels

Question 14

What are cognitive technologies?

Answer 14

Computer based systems that represent, reason about and interpret data. e.g. AI

Question 15

What is artificial intelligence?

Answer 15

Use of computers to perform tasks thought to require intelligence such as learning and reasoning including

• Medical diagnosis through interpretation of medical images
• Home assistants learn our language and habits to better predict and understand our requirements

E.g. live chat functionsW

Question 16

What is machine learning?

Answer 16

• Rather than follow explicit programming instructions, machine learning algorithms detect patterns, learn how to make their own decisions
• Machine learning uses both predictive analytics (what will happen) and prescriptive analytics

Question 17

What is robotic process automation RPA

Answer 17

• Creation of technology and its application to control and monitor activities without human interference. Intelligent systems and artificial intelligence facilitate the process of automation
• RPA will be used for routine processes

Question 18

What are the impacts on the accountancy profession

Answer 18

• Automation - Maintenance of ledgers and preparation of reconciliation is now largely automated
• Systems advice: Advisory work for clients evaluating the merits of potential new systems and technology
• Transparency in recording: Distributed ledger technology is transforming the way transactions are recorded, increasing transparency

Smart contracts - Can be audited when created as they are secure once established and automatically execute

• Data analytics: Analytics can target risk and improve the relevance and efficiency of audit work
• Software controls: Validating the adequacy of internal controls is a fundamental part of audit assignment
• New types of goods and services: Accounting must be able on things like the treatment of new revenue streams and digital assets
• Regulations: Understanding and advising on complex regulation relating to data and technology as well as being aware of the risk of breaches

Question 19

What is a management information systems (MIS)

Answer 19

• Systems to produce information allowing managers to make effective decision

Question 20

What are examples of MIS

Answer 20

• Executive information systems (EIS) or Executive support systems (ESS): A database that pools data from internal and external sources providing easy to use information to senior managers to help make strategic decisions
• Decision support systems (DBS): Combines data and analytical model or data analysis tools to support decision making
• Expert systems (ES): Expert systems allow users to benefit from expert knowledge and information. The systems will consist of a database holding specialised data and rules about what to do in, how to interpret and given a set of a structure
• Knowledge work systems (KWS): Facilitate the creation and integration of new knowledge into an organisation
• Office automated systems (OAS): Systems that increase the productivity of data and information workers

Question 21

What is obsolescence risk?

Answer 21

Technology that goes out of date very quickly so the perceived competitive advantage may be short lived

Question 22

What is inexplicability risk

Answer 22

Technology becomes too complex for humans to understand

Question 23

What is data protection?

Answer 23

legislation states how long personal data can be held and stipulates the reasons why it can be held

Question 24

What is automation risks?

Answer 24

Training of staff to be able to work in an automated envrionment

Question 25

What are ethical risks?

Answer 25

Who is at fault if a computer makes a mistake? Can machines think ethically

Question 26

What is a cyber risk

Answer 26

Cyber risks is the risk of financial loss, business disruption, reputation damage that are a consequences of accidents and poor systems integrity

Question 27

What is hacking

Answer 27

Use of specialist software to gain unauthorised access to systems

Question 28

What is phishing?

Answer 28

Bogus emails that ask for personal or security information

Question 29

What is malicious information

Answer 29

Where the user's files are hijacked and held to ransom

Question 30

What is distributed denial of service? DDoS

Answer 30

Websites and online services being overwhelmed with large amounts of internet traffic that is designed to crash the system

Question 31

What is cyber resilience?

Answer 31

ability of an organisation to ensure its data and information is reliable, available, has integrity and is adequately protected from unauthorised access

Question 32

What do back up plans mean in terms of cyber resilience?

Answer 32

Plans put in place to ensure businesses can continue and all critical data can be recovered should an unexpected outrage occur?

Question 33

What areas of technology should include the information security plan

Answer 33

- Security systems and device configuration - Network security - User privileges - Home and mobile working - Removable media controls - User education and awareness - Web services - Legal