Tag: Ethics

In the case stated below, select whether the control risk is higher than normal, lower than normal, the same or no impact

– The payables ledger is NOT regularly reconciled to the payables ledger control account.

Select ONE answer:

1. No Impact
2. The Same
3. Lower Than Normal
4. Higher Than Normal

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct =>   A lack of regular reconciliations lead to an increase in control risk (higher than normal). 

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Big Staffie plc is a large organisation with a very complex accounting and information system.

Critical to an understanding of the system are the reporting lines and relationships between different departments within Big Staffie plc.

In this situation, which ONE of the following methods is most likely to be used by the auditor of Big Staffie plc, Tick Bash And Co, to record the system of document flows within the system?

Select ONE answer:

1. Narrative notes
2. Questionnaires
3. Flowcharts
4. Organisational charts

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => Narrative notes are more suitable for smaller businesses. Questionnaires do not show relationships and reporting lines as clearly as Flowcharts. Although the organisational chart would show the structure of the organisation and general reporting lines, it would not document the system in operation to the detail shown in Flowcharts.
4. Not correct

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Which ONE of the following is NOT a General Control for Information Systems?

Select ONE answer:

1. Disaster recovery procedures
2. Procedures for resubmission of rejected data
3. Back-up copies of programs stored at an alternative safe location
4. Staff training in the use of new/revised programs

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct => Procedures for resubmission of rejected data are an application control.
3. Not correct
4. Not correct

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The following is an example of a computer control which operates in the payroll system at Big Staffie Ltd.

For the example below, select the type of computer control which it illustrates.

• Manual checks to ensure that timesheets are authorised before details are processed

Select ONE answer:

1. Application
2. Specific
3. Non-Specific
4. General

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => Manual checks are an application control.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following is an example of a computer control which operate in the payroll system at Big Staffie Ltd.

For the example below, select the type of computer control which it illustrates.

– Range checks on payroll processing (ensures that the values entered for employee data, such as hours worked or pay rates, fall within acceptable limits. This helps prevent errors that could lead to incorrect payroll calculations).

Select ONE answer:

1. Specific
2. Non-Specific
3. General
4. Application

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct => Range checks are an application control.

This work is licensed under a Creative Commons Attribution 4.0 International License.