Finance Function Information Characteristics

Three characteristics of useful information are: comparable, consistent, and understandable. Comparable information allows for meaningful comparisons over time or with other organizations. Consistent information ensures that calculations and presentations are consistent, helping to avoid confusion and maintain trust in the data. Understandable information is presented in a way that users can easily comprehend, facilitating decision-making and avoiding misinterpretations.

Timely information is crucial for effective control and decision-making because it allows for timely responses to situations and avoids potential delays or missed opportunities. For example, if financial reports are provided after a critical deadline, it may hinder timely adjustments to financial plans or strategies.

Relevant information is directly related to the decision at hand, providing meaningful insights. Reliable information is accurate and trustworthy, ensuring that decisions are based on sound data. The combination of these two elements ensures that decisions are informed and effective.

<p>Unreliable information can lead to incorrect decisions, potentially causing financial losses or resource misallocation. Ununderstandable information may be misinterpreted, leading to confusion and potentially ineffective decision-making. In both cases, the lack of clarity can result in poor outcomes for the organization.</p> Signup and view all the answers

<p>Comparable information, such as financial data from different time periods or from competitors, allows for meaningful analysis and comparison. It helps to identify trends, track performance, and make informed decisions based on a clear understanding of relative performance.</p> Signup and view all the answers

<p>Consistent information ensures that financial statements are prepared using the same accounting principles and methodologies, making them comparable over time and across different departments. This consistency builds trust in the financial data and allows for accurate trend analysis.</p> Signup and view all the answers

<p>Understandable information ensures that all stakeholders, including financial professionals, employees, and investors, comprehend the presented data and make informed decisions. Clear and concise communication promotes transparency and avoids confusion or misinterpretations.</p> Signup and view all the answers

<p>In a rapidly changing environment, outdated or untimely information can result in poor decision-making, leading to missed opportunities or ineffective responses to market shifts. Timely information provides a competitive advantage by enabling quick and informed actions.</p> Signup and view all the answers

<p>Running the wrong program or accidentally deleting important data.</p> Signup and view all the answers

<p>The internet can expose an organization to viruses, hackers, and unauthorized employees who can steal or damage data.</p> Signup and view all the answers

<p>To prevent the potential consequences of security breaches, such as damage to systems or the release of confidential information.</p> Signup and view all the answers

<p>Loss of confidentiality, where sensitive information could be obtained by competitors or unauthorized individuals.</p> Signup and view all the answers

<p>To protect commercially sensitive information, to ensure efficient and effective operations, and to maintain the confidentiality of personal data.</p> Signup and view all the answers

<p>Employee home addresses and contact details, as well as payroll-related information.</p> Signup and view all the answers

<p>This information could be misused, leading to financial losses or identity theft.</p> Signup and view all the answers

<p>The attack infected NHS systems, leading to cancellations of surgeries and significant disruptions.</p> Signup and view all the answers

<p>Physical damage to hardware or computer media can happen due to malicious damage, poor operating conditions, natural disasters, and simple wear and tear.</p> Signup and view all the answers

<p>The loss of accounting records can be a significant financial blow, potentially leading to the company's failure.</p> Signup and view all the answers

<p>Consistently using a depreciation method like the straight-line method allows for easier year-on-year comparisons of depreciation expense, making it easier to identify trends and make informed decisions.</p> Signup and view all the answers

<p>The three threats are the cost of repair or replacement, the danger of damaged data, and the cost of computer downtime.</p> Signup and view all the answers

<p>Clear explanations of the depreciation method used improve the understandability of financial statements, particularly for non-financial stakeholders who may not be familiar with technical accounting concepts.</p> Signup and view all the answers

<p>The communication of depreciation information should be tailored to the specific needs and understanding of the audience. For example, a finance professional might receive more technical details, while a production manager might need simpler explanations to understand the implications for their operations.</p> Signup and view all the answers

<p>Hacking activities can provide competitors with sensitive data, allowing them to gain a competitive advantage.</p> Signup and view all the answers

<p>Hackers can gain unauthorized access to financial data, enabling them to engage in fraudulent transactions or activities.</p> Signup and view all the answers

<p>Timely financial information is essential for managers to make informed decisions and control operations effectively. Delayed information can hinder timely responses to changing market conditions or operational issues.</p> Signup and view all the answers

<p>Revising depreciation assumptions, such as the useful life of an asset, can affect the comparability of financial data over time. Without proper communication of changes, users may struggle to understand the reasons for differences in depreciation charges.</p> Signup and view all the answers

<p>Hackers can introduce unauthorized programs and processing into the system, leading to data corruption. This is often referred to as 'computer viruses'.</p> Signup and view all the answers

<p>Digital technologies can be used to efficiently collect, process, and disseminate financial data, allowing for more comprehensive analysis and real-time insights. These advancements enable companies to make better-informed decisions and improve operational efficiency.</p> Signup and view all the answers

<p>Ransomware is a type of malicious software that encrypts a computer's data and demands a payment, often in cryptocurrency, to unlock the system. This can significantly disrupt business operations.</p> Signup and view all the answers

<p>The nature of a company's activities, such as the complexity of its operations or the size of its data sets, can determine the type and level of sophistication of digital technologies implemented. More complex businesses may require more advanced technologies to manage their financial data effectively.</p> Signup and view all the answers

<p>The 'Wannacry' cyber attack in 2017 is a famous example of a ransomware attack that infected numerous systems worldwide.</p> Signup and view all the answers

<p>A small company could use a cloud-based accounting software to track its transactions, generate reports, and provide insights into its financial performance. This software can help streamline operations and provide valuable data for decision-making.</p> Signup and view all the answers

<p>The five key data security functions are threat avoidance, prevention, deterrence, detection, recovery, and correction.</p> Signup and view all the answers

<p>The passage uses the example of disciplinary action or dismissal for computer misuse by employees as a deterrent, highlighting the potential consequences of unauthorized access.</p> Signup and view all the answers

<p>By storing sensitive information, like supplier details and bank account information, under the control of a designated individual and in a secure location like a locked drawer or safe, unauthorized access can be deterred.</p> Signup and view all the answers

<p>Computer controls for detection include control logs of unauthorized access attempts and manual reviews of program and data file modifications.</p> Signup and view all the answers

<p>Data recovery minimizes the impact of data security breaches and ensures business continuity. Procedures include regular data backups and a disaster recovery plan to facilitate quick restoration of data and operations.</p> Signup and view all the answers

<p>Data correction restores the integrity of compromised data by addressing unauthorized changes. Effective correction relies on complete data backups and trained staff for recovery and re-installation in emergencies.</p> Signup and view all the answers

<p>While essential, prevention cannot completely eliminate all threats cost-effectively. The passage highlights the need for complementary security measures to address the remaining risks.</p> Signup and view all the answers

<p>Threat avoidance aims to proactively reduce potential threats by modifying system design. The passage suggests changing system design to deter unauthorized access, which directly aligns with threat avoidance principles.</p> Signup and view all the answers

<p>Passwords are used to verify the identity of users attempting to access a computer system. This helps to restrict access to authorized individuals, preventing unauthorized access to sensitive data or files. They act as a primary control mechanism for authentication and access control, ensuring that only authorized personnel can access specific files or data.</p> Signup and view all the answers

<p>Data encryption involves converting information into an unreadable format, known as ciphertext, using an encryption algorithm. This prevents unauthorized access and ensures that only authorized individuals with the decryption key can read the data. It protects data from both physical and electronic threats like unauthorized access and data interception during transmission.</p> Signup and view all the answers

<p>System logs record all activities on a system, providing a detailed audit trail. This helps to identify and investigate suspicious activity, such as unauthorized access attempts or data manipulation. Exception reporting focuses on unusual or unexpected events, such as access outside of normal working hours, flagging potential security breaches and allowing for prompt action.</p> Signup and view all the answers

<p>Shielding VDUs prevents unauthorized individuals from remotely viewing the information displayed on the screen. This ensures that sensitive data on the display cannot be intercepted using detection equipment. It reduces the risk of visual eavesdropping and data theft by physically blocking the transmission of radiation from the screen.</p> Signup and view all the answers

<p>Random checks involve the unannounced inspection of user activities on the system. This helps to deter unauthorized behavior and reinforces the understanding that individuals are accountable for their actions on the system. It creates a sense of unpredictability, deterring potential violators and ensuring compliance with security policies.</p> Signup and view all the answers

<p>Access control based on user roles ensures that individuals have access only to the files and data that are relevant and necessary for their specific job functions. This prevents unauthorized access and use of confidential information. For instance, an order clerk may be granted access to customer files to record orders but not to view their bank account details.</p> Signup and view all the answers

<p>Strict password controls are essential to maintain data security and prevent unauthorized access. This includes enforcing strong password requirements, regularly changing passwords, and implementing disciplinary measures for misuse. Such controls help to protect against password guessing, unauthorized access, and data breaches, ensuring the integrity of the system.</p> Signup and view all the answers

<p>Screensavers with password control provide an extra layer of security when workstations are left unattended. This prevents unauthorized access and data breaches by automatically locking the screen after a set period of inactivity, requiring a password to access the system again. This ensures that no unauthorized individuals can access confidential information left open on the screen.</p> Signup and view all the answers

Information is crucial for the finance function's efficiency.

Useful information must be comparable, consistent, understandable, relevant, reliable, and timely.

Allows users to make meaningful comparisons over time or against benchmarks.

Information should maintain consistency in calculations and presentation.

Information must be clear and presented in a way that users can comprehend.

Relevant information influences decision-making for users.

Reliable information has been accurately calculated or estimated.

Information is timely if it is available when needed for decision-making.

Annual expense reflecting asset value reduction.

Depreciation method allocating equal expense each year.

Adopting the same method for easier comparison.

Clarity of financial information for various users.

Updating assumptions like useful life of assets.

Use of tools to manage financial data effectively.

Technical language used in finance that can confuse non-experts.

The application of processes and systems to protect data and networks from cyberattacks.

An attempt to damage or destroy a computer network or system.

Unauthorized access that can lead to theft or damage of assets.

Destruction of physical components due to various factors.

Corruption or loss of data due to cyber threats or faults.

Unauthorized access to computer systems to exploit or damage data.

Malware that locks files and demands payment to unlock them.

A major ransomware attack that occurred in 2017, affecting many organizations.

Errors caused by non-deliberate actions like running the wrong program.

Threats arising from weak internet connections and online activities.

The theft of confidential information by outsiders or unauthorized employees.

Financial deception or threats to exploit sensitive information.

Actions businesses take to protect sensitive information and systems.

Results of attacks like data theft or system damage.

Operational impacts on health systems due to cyber issues.

The need to keep individual information private and secure.

Management ensures access to sensitive files is restricted to authorized staff only.

Ensuring strict guidelines are followed for creating and using passwords, with serious consequences for misuse.

Files are encoded to prevent unauthorized access, making them unreadable without a decryption password.

Every system activity is recorded, and unusual access events are reported for security.

Occasional checks by authorized personnel to confirm that users are performing allowed activities.

A screensaver that requires a password to access, aiding security when a user steps away.

Protecting video display units (VDUs) to prevent unauthorized viewing of displayed information.

Operating systems deny and report attempts to access files or data without permission.

Data security is divided into threat avoidance, prevention, deterrence, detection, recovery, and correction.

Changing system designs to reduce potential threats to data security.

Minimizing threats through cost-effective methods, although not all can be prevented.

Measures to prevent unauthorized access and discourage attempts to gain access to systems.

Controls to identify unauthorized access and report findings to personnel.

Limit consequences of compromised data and ensure quick processing resumption.

Fixing unauthorized changes in systems as soon as possible.

A formal procedure for restoring data and systems swiftly after a disaster.