Important Concepts

Question 1

validity of information?

Answer 1

the underlying transaction must be genuine (actually occurred), and is in terms of mgmt policy

Question 2

accuracy of information?

Answer 2

all the inputs and calculations of info is correct and it is in the correct account

Question 3

completeness of information?

Answer 3

ensured when all relevant information is recorded, in the correct period in a timely manner

Question 4

operational objectives?

Answer 4

• safeguarding of assets
• business continuity
• economy, efficiency, effectiveness of ops
• info confidentiality
• preventing fraud
• compliance with laws

Question 5

components of ITGC?

Answer 5

• control environment
• systems dev/implementation controls
• access controls
• continuity of operations
• system software/operating controls
• documentation

Question 6

general controls for all cycles?

Answer 6

segregation of duties
custody of assets
recons
unused stationery
mgmt supervision
authorisation

Question 7

types of application controls?

Answer 7

input
processing
output
masterfile

Question 8

components of internal control?

Answer 8

control environment
risk assessment process
information systems
control activities
monitoring of controls

Question 9

sections in Companies Act?

Answer 9

• s28 = accounting records
• s29 = financial statements
• s43 = soc / ethics committee
• s69 = disqualified / inelligible
• s75 = personal financial interest
• s76 = standards of directors conduct
• s77 = liability for losses
• s94 - audit committees

Question 10

CPC fundamental principles?

Answer 10

Confidentiality of info
Objectivity
Prof competence and due care
Prof behavior
Integrity

Question 11

categories of threats?

Answer 11

• self interest
• self review
• familiarity
• advocacy
• intimidation

Question 12

stages of the sales cycle?

Answer 12

• ordering by customers
• warehouse and dispatch
• invoicing and recording
• managing debtors
• returns

Question 13

stages of the purchases cycle?

Answer 13

• ordering goods from suppliers
• receiving goods into warehouse
• recording the transactions
• making payment

Question 14

stages in production cycle?

Answer 14

• determining RM / production needs
• transferring RM and FG
• costing and storing inventory

Question 15

stages in the payroll cycle?

Answer 15

• personnel
• timekeeping
• preparing the payroll
• payment preparation and payout
• recording

Question 16

validity objectives for payroll?

Answer 16

• wages paid in respect of actual work done by company employees
• gross wages recorded in accordance with company policy using auth. rate of pay and no. of hours worked
• rate of pay ito relevant legislation
• deductions in terms of labour laws and personnel deductions are auth. by employees

Question 17

accuracy objectives for payroll?

Answer 17

• net wages are calculated using correct pay rate, no. of hours and deductions
• payroll is correctly recorded in journals and GL accs

Question 18

completeness objectives for payroll?

Answer 18

• all payroll costs accounted for and recorded in correct acc period