ERP Systems & Financial Technology Flashcards

A company implements blockchain technology for its intercompany transactions. What is the PRIMARY financial control benefit?

Answer: An immutable, shared ledger that provides both parties a real-time, tamper-evident record of transactions

Blockchain creates a shared, cryptographically secured ledger that both parties can trust, reducing intercompany reconciliation disputes and providing a clear audit trail.

What is the role of an ERP 'subledger' in financial accounting?

Answer: A detailed subsidiary record that supports and reconciles to a control account in the general ledger

Subledgers (e.g., AR, AP, fixed assets) maintain transaction-level detail that rolls up and reconciles to the corresponding control account in the general ledger.

When evaluating ERP total cost of ownership (TCO), which cost category is MOST often underestimated by organizations?

Answer: Ongoing maintenance, training, support, and business process change management costs

Organizations routinely underestimate the post-go-live costs of user adoption, ongoing training, system maintenance, and continuous improvement that extend for years.

A financial controller is assessing the use of AI-driven anomaly detection in the ERP. Which control objective does this PRIMARILY support?

Answer: Detecting unusual transactions that may indicate errors or fraud in real time

AI anomaly detection continuously monitors transaction patterns and flags statistical outliers for human review, strengthening fraud detection and error prevention controls.

In an ERP context, what is the purpose of a 'user acceptance testing' (UAT) phase?

Answer: Confirming that the configured system meets business requirements and processes work correctly from the end-user perspective

UAT has business users execute real-world scenarios in the configured system to validate it meets requirements before the organization commits to go-live.

Which of the following BEST describes 'ERP configuration' as distinct from 'ERP customization'?

Answer: Configuration uses built-in system settings and parameters; customization involves writing or modifying code

Configuration leverages the system's standard built-in options (e.g., setting fiscal year, currency, approval thresholds), while customization requires coding changes outside the standard product.

A CFO wants to implement a Digital Finance Transformation. Which initiative BEST aligns finance technology with strategic value creation?

Answer: Automating transactional processes to free up finance staff for analysis, forecasting, and decision support

Digital Finance Transformation aims to automate low-value transactional work so the finance team can focus on higher-value activities like business partnering, analysis, and strategic planning.