Accounting Systems and Controls Flashcards
6 cards from real AAT L4 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Accounting Systems and Controls flashcards as text
Which of the following is a key objective of an internal audit function?
Answer: To provide an independent assessment of the effectiveness of internal controls
Internal audit provides independent, objective assurance on the effectiveness of risk management, governance, and internal control processes. It reports to management and the audit committee rather than to shareholders.
A company is considering moving from manual accounting to cloud-based software. Which risk is specific to cloud-based systems?
Answer: Dependency on internet connectivity and third-party data security
Cloud-based systems rely on internet connectivity and store data on third-party servers, raising concerns about availability, data security, GDPR compliance, and vendor reliability. These risks do not apply to on-premise solutions.
Under UK GDPR, a data controller must:
Answer: Ensure personal data is processed lawfully, fairly, and transparently
Under UK GDPR, the data controller must comply with principles including lawfulness, fairness, and transparency. Data must be collected for specified purposes, kept to a minimum, accurate, stored only as long as necessary, and protected with appropriate security.
The payroll clerk can add new employees, process payroll, and distribute pay. What control recommendation best addresses this risk?
Answer: Segregate duties so different people add employees, process payroll, and authorise payments
Segregation of duties is the most effective control. By ensuring different individuals handle employee setup, payroll processing, and payment authorisation, the risk of ghost employees or fraudulent payments is significantly reduced.
What is the purpose of a systems flowchart in an accounting systems evaluation?
Answer: To visually map the flow of data and processes through the accounting system
A systems flowchart uses standard symbols to represent the flow of data, documents, and processes through an accounting system. It helps identify bottlenecks, control weaknesses, and areas for improvement.
When recommending changes to an accounting system, which stakeholder consideration is MOST important?
Answer: Staff training needs and resistance to change
Staff training and change management are critical success factors. Even the best system will fail if users are not properly trained or if resistance to change is not managed effectively.