Tag: Professional Accountant

Which ONE of the following would NOT be a good source of information about a company’s systems?

Select ONE answer:

1. The company’s procedures manual
2. The company’s website
3. The internal audit function’s system notes
4. Inquiries made of company staff

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 => The company’s website is very unlikely to contain details on the internal control system.
3. Not correct
4. Not correct

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Which ONE of the following would NOT be a good source of information about a company’s systems?

Select ONE answer:

1. The prior year audit file
2. The company’s procedures manual
3. The internal audit function’s system notes
4. Inquiries made of company staff

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 => While the prior year audit file will be useful, the system may have changed in the intervening period.
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 would be the simplest way of recording a straightforward system not subject to a great deal of change annually?

Select ONE answer:

1. Flowchart
2. Questionnaire
3. Family tree
4. Narrative notes

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 => Narrative notes would be the simplest way of recording a straightforward system that is not subject to a great amount of change annually. It is, however, the least effective way in terms of readily identifying the system in operation and the deficiencies of the system.

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

In each of the following three examples, select whether the computer controls that operate at Alex plc are either “General” or “Application”.

Example 1 – Storing extra copies of programs and data files off-site

Example 2 – Programmes to check data fields on input transactions

Example 3 – Manual checks to ensure that the input data was authorised

Select ONE answer:

1. Example 1. General and Example 2. General and Example 3. General
2. Example 1. General and Example 2. General and Example 3. Application
3. Example 1. General and Example 2. Application and Example 3. Application
4. Example 1. Application and Example 2. Application and Example 3. 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 3

1. Not correct
2. Not correct
3. Correct => Example 1 is a general control as it supports the effective functioning of application controls. Examples 2 and 3 are correct as they relate specifically to the processing of individual applications.
4. Not correct

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

The following are examples of internal controls which operate at Alex plc.

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

• The receivables ledger clerk (Arthur) posts invoices to the receivables ledger. The cash book clerk (Jonny) posts the cash receipts to the receivables ledger.

Select ONE answer:

1. Information processing
2. Segregation of duties
3. Performance review
4. Physical control

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 – Having separate clerks recording sales invoices and posting cash receipts in the sales ledger reduces the risk of fraud and error (is therefore a segregation of duties control).
3. Not correct
4. Not correct

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