AAT L4 Accounting Systems and Controls

Question 1

Which of the following is an example of an application control in an accounting information system?

Accepted Answer

Input validation checks on data entry fields

Answer

Application controls are specific to individual software applications and include input validation, processing controls, and output controls. The other options are general IT controls that protect the overall IT environment.

Question 2

The internal control principle of segregation of duties requires that:

Accepted Answer

No single person should control all aspects of a transaction from initiation to completion

Answer

Segregation of duties ensures no single individual can initiate, authorise, record, and reconcile a transaction. This reduces the risk of errors and fraud by requiring collusion between multiple people to bypass controls.

Question 3

A SWOT analysis conducted as part of an accounting systems review considers:

Accepted Answer

Strengths, Weaknesses, Opportunities, and Threats related to the system

Answer

A SWOT analysis evaluates the internal strengths and weaknesses of the current accounting system and the external opportunities and threats that may affect it. This is a standard tool used in the AAT Level 4 unit to evaluate and recommend system improvements.

Question 4

Which of the following would be classified as a weakness in an accounting system?

Accepted Answer

The purchase ledger clerk can also authorise payments to suppliers

Answer

Allowing the purchase ledger clerk to also authorise payments violates segregation of duties. This person could create fictitious suppliers and authorise payments to themselves.

Question 5

Under the Bribery Act 2010, a UK organisation can be held liable if:

Accepted Answer

A person associated with the organisation bribes another to obtain business, and the organisation lacked adequate procedures

Answer

Section 7 of the Bribery Act 2010 creates a corporate offence of failure to prevent bribery. An organisation is liable if an associated person bribes another to obtain or retain business, unless it can prove it had adequate procedures in place.

AAT Level 4 Practice Test

AAT Level 4 Practice Test

AAT L4 Accounting Systems and Controls