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
Cloud accounting software (e.g., Xero, QuickBooks Online) offers which advantage over desktop accounting software?
Answer: Accessible from any location with internet access, and automatic updates from the provider
Cloud accounting software is accessible from any internet-connected device, automatically updated by the provider (no IT maintenance), and allows real-time access for multiple users in different locations.
An entity's accounting system should support which key principle of financial reporting?
Answer: Providing timely, accurate, and complete financial information consistent with the applicable accounting standards
The accounting system exists to produce reliable, timely, and complete financial information in accordance with applicable standards — supporting both internal management decisions and external financial reporting requirements.
The main purpose of a systems development life cycle (SDLC) in implementing a new accounting system is to:
Answer: Provide a structured framework for planning, designing, testing, and implementing the system to reduce failure risk
The SDLC (initiation, analysis, design, development, testing, implementation, maintenance) provides a disciplined, phased approach to implementing new systems, reducing the risk of system failure or inadequate controls.
Which of the following control would detect a duplicate payment to a supplier?
Answer: Checking the purchase ledger for invoices already marked as paid before processing a payment run
Checking whether an invoice has already been paid (via the purchase ledger status) before processing a payment run is a detective/preventive control specifically designed to catch duplicate payments.
Under the GDPR and Data Protection Act 2018, accounting systems holding personal data must:
Answer: Only retain personal data for as long as necessary for its purpose, with appropriate security measures
GDPR requires data minimisation (only necessary data), purpose limitation (only used for stated purpose), and storage limitation (not retained longer than needed), along with appropriate technical and organisational security.
Which of the following would be classified as a control environment factor?
Answer: The tone set by management regarding ethics, integrity, and the importance of controls
The control environment is the foundation of all other controls — it reflects management's attitude toward internal control, including the ethical 'tone at the top', organisational structure, and commitment to competence.