Information Systems Security and Ethical Issues - Finance Management - Assignment Example

Information Systems Security and Ethical Issues: Finance Management Information Systems (SN = Speakers Notes) Slide 1: Introduction Finance management is the function of the business that is involved in managing the finances of the business in terms of expenditure, revenues and other liabilities such as taxes, managing loans and sources of finance etc. Slide 2 Within the finance management function, the financial information is used for various uses such as; Making financial decisions as to where to invest Making financial decisions regarding whether to take loans and from where to take such loans Making decisions about which assets to sell or maintain Making decisions as to which courses of revenue are better and which must be pursued more. Slide 3: Communication of financial information Communication of the financial information from the Finance Manger office to the other departments and external parties can be done using the following channels; Sending of internal memorandums within the organization can be used to send none detailed information. The use of financial reports is one that is very prevalent, especially in communication financial information to external stakeholders such as the public, the shareholders, the suppliers and creditors etc. The use of shared information systems is becoming more popular and in the past two decades, this has been a major way to share such information within the firm and sometimes even beyond the boundaries of the firm. Board meetings are also a platform where such information can be shared and communicated. AGMs and EOM (extra ordinary Meetings) are also used to share this information with shareholders. SN: if the finance manager wants a certain decision to be made, such as in the use of petty cash or new policies on such, he or she can send a memo to the relevant parties or departments SN: financial reports are detailed financial information and are produced periodically by analyzing the financial information and using GAAP principles. SN: Computerized information systems are becoming he De facto way to communication business information, especially financial information. As Whitman and Mattord (2011), say, there are however many security issues which have to be used which range from internal threats, external threats from hackers, etc. SN: AGMs and EOMs only provide a platform to share the most basic information, for the parties to get detailed information; they have to read the detailed financial reports. Slide 4: types of information There are various types of information which the finance department collects from various sources and this includes; POS data which provide information about the sales revenues of the firm; There are various ways in which to look at the ways in which the Managerial information Transaction data such as between suppliers and the business are also a major source of information for finance management These transaction me be transaction with suppliers, customers, creditors, government etc Internal financial statements also offer a secondary source of this information as they are used to provide information which can be used to make various decisions. SN: POS data is only relevant to retail businesses such department stores SN: managerial information if more of a product by the finance management department rather than what they collect. This information is derived from raw data from other sources such as POS, Inventory data, etc SN: the sources of financial information can either be primary or secondary. Primary data is the data that derived from direct transactions such as POS data while secondary data is data hat has been derived from another sources of data, such as internal financial resources which includes the cash flow statements, the trial balance, the income statement etc. Slide five: Checking information How the information is checked for reliability depends on a number of which include the following; For computerized information, the system can be programmed to check for various issues and incompatibility The system can look for various issues which include the age of the information, duplicity, relevance etc. SN: Computer systems are able to check for various errors and either avoid them or report them so that can be fixed. SN: Financial accounting systems and Principles are also useful in avoiding errors. They are designed in such a way that if an error is made, the error is made. However, some errors (such as compensating errors) may not be detected in this way. SN: Auditing by either an internal or external auditor is necessary to clear these errors Slide 6: Improving quality There are various ways in which to improve the quality of information. Reducing, or at least minimizing errors to make sure that the information is reliable and relevant Only providing relevant information and making sure that this information does not have too much information that is not relevant Availing the information in time Creating the best channels to communicate this information so that the information is communicated in time, securely and with minimal cost. SN: the processes of making information to be of higher quality is dependent on the qualities of information which include: relevance, timeliness, conciseness, accuracy, completeness, inexpensiveness. Slide 7: characteristics of information Timely: information must be timely in order to be of any use, the right information provided at the wrong time is not useful to anyone. For instance, if there is going to be a fall in demand for a specific product, getting this information in time to plan for this change in market is very useful to the business, however, if this information comes at the wrong time, the information will not be of any use to the business and the business will still have to suffer the consequences. Relevant: information has to be relevant to a business and to a specific situation. For instance, information about the fall in market demand for cars may not be relevant for a retail store, unless there is a direct correlation between the two. However, if there is going to be a drop in the demand for a certain cereal product, this is relevant to the retail store and it can use this for its advantage. Concise; information must be consider in order to be of help. Too bulky information maker is harder for decision makers to know which decision to make while. Information has to be concise without being too scanty. Pat 2 Ethical issues Ethical issues are becoming more of importance as computerized information systems are used. Many firms these days are holding information about their customers and they use this information in order to try and serve the customers better. However, as Reynolds (2011) says, the boundary separating the ethical and unethical use of this information is not clear and there are always situations where the business may end up using this information in the wrong way. One of the ways in which businesses ca abuse this information is by sharing it with external users without the express permission of the user. Businesses should also protect the identity and privacy of the individual and should not interfere with this. For a small enterprise, this is important and such businesses should be able to have clear information systems policy that will prevent their staff from abusing this information. Security of information Any business should be more aware of the security issues regarding its business (Vacca, 2012). This is more so with computerized information. While computerized information makes it easy for information to be used by the internal managers for the benefit of the business, it also means that those with malicious intent are also able to easily abuse the information. Businesses should be aware of the issues with regard to the information they have and should protect it using all means possible. Procuring secure information systems is the first step to achieving security. The business should also have the eight information security policies which will help it to be able to protect it information. However, as Brennan (2011) argues, procuring a secure system will mean an increased cost on the part of the business. With regard to this, the business information managers should always be able to know where to trade security for cost. The bigger the business, the higher the risk of its information and this means that such businesses should invest more in security issues (Atluri & Hale, 2000). At the same time, it is absolutely necessary for such businesses to be able to hire security professionals to secure their systems. Smaller businesses and enterprises find it harder to have secure systems since they may not have the funds to secure these systems from reputable vendors which are always very expensive. Legal issues Legal issues and ethical issues are related in one way or the other. However, while some ethical issues may not be prosecutable, all legal issues regarding the use of information of other people are prosecutable and the business can be sued and prosecuted in a court of law and be fined or punished for the illegal use of information. Small businesses should be more aware of this in order to avoid trouble with authorities (Salehnia, 2002). These small businesses are more likely to be affected by these issues because they don’t have the money to employ legal offices to guide them on legal use of information. Reference list: Atluri, V. & Hale J,. (2000). Research Advances in Database and Information Systems Security. Hoboken, NJ: Springer. Brennan, L. (2011). Social, Ethical and Policy Implications of Information Technology. Hershey, PA: Idea Group Inc. Reynolds, G. (2011). Ethics in Information Technology. Stamford, CT: Cengage Learning. Salehnia, A. (2002). Ethical Issues of Information Systems. Hershey, PA: Idea Group Inc. Vacca, J. (2012). Computer and Information Security Handbook. Amsterdam, GM: Newnes. Whitman, M. & Mattord, H. (2011). Principles of Information Security. Stamford, CT: Cengage Learning. Read More