Accounting Systems & 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 & Controls flashcards as text
A management information system (MIS) provides information to:
Answer: Managers at all levels for decision making, control, and planning
An MIS collects, processes, and presents data to support management decision making, planning, and control at strategic, tactical, and operational levels throughout the organisation.
Reconciliation controls in accounting systems are designed to:
Answer: Verify the accuracy and completeness of data by comparing two independent sets of data that should agree
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.
Which of the following is a detective control?
Answer: Monthly bank reconciliation that identifies fraudulent payments
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.
The three-way match in the payables process involves matching:
Answer: Purchase order, goods received note, and supplier invoice
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.
In the context of internal controls, the term 'authorisation' refers to:
Answer: A responsible person checking and approving a transaction or activity before it proceeds
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.
Which of the following is a risk of over-reliance on spreadsheets in an accounting system?
Answer: Formula errors, lack of access control, and no audit trail can lead to material misstatement
Key spreadsheet risks include: undetected formula errors, version control failures (wrong file used), lack of user access controls, and no automatic audit trail — all of which can compromise data integrity.