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
An accounting system upgrade should be tested before going live. User acceptance testing (UAT) verifies that:
Answer: The system meets the business requirements and processes transactions correctly from the user's perspective
UAT tests whether the system performs as required from the user's operational perspective — finance staff test realistic scenarios to confirm the system processes transactions correctly before live deployment.
Which control technique reduces the risk of errors when inputting data into an accounting system?
Answer: Batch totals and hash totals checked against system-generated totals after input
Batch controls (checking pre-calculated totals of amounts, or hash totals of invoice numbers) against the system's output after data entry detects input errors, omissions, or duplicate entries.
Disaster recovery planning for an accounting system should include:
Answer: Regular data backups stored offsite, documented recovery procedures, and periodic testing of the recovery process
Effective disaster recovery requires: frequent, offsite backups; documented and tested recovery procedures; business continuity plans; and regular testing of the ability to restore systems within an acceptable timeframe.
Payroll controls should include which of the following?
Answer: Segregation of duties between HR (adding/removing employees) and payroll processing, with independent authorisation of payroll
Key payroll controls: HR maintains the personnel records (starters and leavers) separately from those who process payroll; payroll is independently authorised and reconciled; and payroll data is securely stored.
Which of the following is the most significant indicator of a weak control environment?
Answer: Management frequently overrides established controls without documentation or approval
Frequent, undocumented management override of controls is a significant red flag — it suggests the tone at the top does not support the control framework and significantly increases the risk of fraud and material misstatement.
Systems documentation (e.g., flowcharts, narratives) is important in accounting systems because:
Answer: It enables staff, auditors, and management to understand how processes work, facilitating training and control reviews
Systems documentation records how processes work — enabling training of new staff, facilitating internal and external audit reviews, supporting system change management, and ensuring continuity of operations.