C7 - Recommendations & Making Changes

Question 1

3 steps to remember for making changes to the accounting system in the exam (format)

Answer 1

1 - set out the new procedures or controls which will resolve the problem
2 - explain why the business must make changes to the system (provide evidence)
3 - clearly presented and easy to read

Question 2

Examples of strengths within a company?

Answer 2

• good credit control
• good service (for customers and suppliers)
• qualified staff members
• good IT systems for the work carried out
• strong ethical and sustainable principles

Question 3

Examples of weaknesses in a company?

Answer 3

• poor sales system
• unqualified staff members
• poor wage rate which leads to poor production
• non-integrated accounting system
• unsupervised computers with personal information on

Question 4

Examples of opportunities within a company?

Answer 4

• installing new software
• improving internet sales
• implementing electronic sales
• new technology
• paperless purchasing system = more efficient

Question 5

Examples of treats within a company?

Answer 5

• new competitors
• over reliance on customers or specific contracts
• a change in the market
• changes in technology

Question 6

Controls of transitions -

Dual or parallel running

Answer 6

Running the old and new software for a period of time until the new software is set up. The two systems must be reconciled to detect any errors or omissions

Question 7

Controls of transition -

Test database

Answer 7

Setting up demo profiles to make sure all the checks are running smoothly

Question 8

Controls of transition -

Phased implementation.

Answer 8

Slowly introducing a new software to staff members so they get a better understanding of how it works.

Starting with placing orders, then a new purchase ledger then a cash payment system.

Question 9

Controls in transition -

Piloting changes

Answer 9

The software being tested in one branch before being set up on every computer at every branch.