Tag: Professional Accountant

Which ONE of the following is an authorisation control activity?

Select ONE answer:

1. A bank reconciliation was compiled by the finance director himself
2. An appraisal of the sales ledger clerk by the finance director
3. A cheque payment run approved by the finance director
4. A trial balance compiled by the finance director

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 => Appraising the sales ledger constitutes a performance review, and compiling the trial balance are information processing control activities.
4. Not correct

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

Which ONE of the following is an authorisation control activity?

Select ONE answer:

1. A cheque payment system compiled by the finance director himself
2. A bank reconciliation signed by the finance director
3. An appraisal of the sales ledger clerk by the finance director
4. A trial balance compiled by the finance director

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 => Appraising the sales ledger constitutes a performance review, and compiling the trial balance are information processing control activities.
3. Not correct
4. Not correct

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

Which ONE of the following represents an inherent limitation of a system of internal controls?

Select ONE answer:

1. The possibility that staff members will collude in fraud 
2. Lack of controls over the purchasing system
3. Lack of staff to ensure segregation of duties
4. Lack of controls over the inventory system

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 => The last three options are incorrect as they are control deficiencies, rather than inherent limitations of an internal control system as such.
2. Not correct
3. Not correct
4. Not correct

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

Which ONE of the following represents an inherent limitation of a system of internal controls?

Select ONE answer:

1. Lack of controls over the purchasing system
2. Lack of staff to ensure segregation of duties
3. Lack of controls over the inventory system
4. Lack of understanding of the purposes of controls

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 => The first three options are incorrect as they are control deficiencies, rather than inherent limitations of an internal control system as such.

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

Most entities make use of IT systems for financial reporting and operational purposes.

Controls operating in an IT environment can be split into general controls and application controls.

Which ONE of the following is an application control?

Select ONE answer:

1. Training staff in new IT procedures
2. Taking backup copies of programs
3. Cyclical reviews of all master files
4. Maintenance agreements over IT equipment

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 => Cyclical reviews of the master files is an application control. The remainder of the options available are general controls.
4. Not correct

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