AAT L4 Accounting Systems & Controls 2

Question 1

A management information system (MIS) provides information to:

Accepted Answer

Managers at all levels for decision making, control, and planning

Answer

An MIS collects, processes, and presents data to support management decision making, planning, and control at strategic, tactical, and operational levels throughout the organisation.

Question 2

Reconciliation controls in accounting systems are designed to:

Accepted Answer

Verify the accuracy and completeness of data by comparing two independent sets of data that should agree

Answer

Reconciliation controls (e.g., bank reconciliation, control account reconciliation) compare two independently maintained records; any difference identifies an error, omission, or fraud that requires investigation.

Question 3

Which of the following is a detective control?

Accepted Answer

Monthly bank reconciliation that identifies fraudulent payments

Answer

Detective controls identify errors or irregularities after they have occurred — a monthly bank reconciliation compares cash book and bank statement to detect fraud, errors, or unrecorded transactions.

Question 4

The three-way match in the payables process involves matching:

Accepted Answer

Purchase order, goods received note, and supplier invoice

Answer

Three-way matching compares the purchase order (what was ordered at what price), the goods received note (what was received), and the supplier's invoice (what is being charged) before authorising payment.

Question 5

In the context of internal controls, the term 'authorisation' refers to:

Accepted Answer

A responsible person checking and approving a transaction or activity before it proceeds

Answer

Authorisation is the approval of a transaction by a person with appropriate authority before it is processed or committed to; it is a fundamental preventive control ensuring transactions are legitimate.

AAT Level 4 Practice Test

AAT Level 4 Practice Test

AAT L4 Accounting Systems & Controls 2