Topic 9: Internal Controls II

Question 1

Accuracy

Answer 1

The aim of making sure that all data that enters the system are correct and reflect the actual events that are being recorded.

Question 2

Application Controls

Answer 2

Manual or automated procedures that typically operate at a business process level and apply to the processing of transactions by individual applications.

Question 3

Authorisation

Answer 3

Ensuring users have correctly defined access to information within a system and that transactions are executed and recorded by people with the appropriate authority.

Question 4

Batch Processing

Answer 4

Data from transactions are accumulated in a group or batch and processed together.

Question 5

Batch Total

Answer 5

A total that is added to a batch of documents and is used to make sure that all documents in the batch have been correctly processed. A batch total is usually a summation of data items with some meaning (e.g. a total of the individual invoice amounts for a batch of invoices). See also hash total.

Question 6

Cold Site

Answer 6

An available office with basic telephone and electricity supplies ready for use should they be required.

Question 7

Completeness

Answer 7

The aim of ensuring that all events that occur are recorded within the system.

Question 8

Corrective Controls

Answer 8

Controls designed to correct an error or irregularity after it has occurred.

Question 9

Detective Controls

Answer 9

Designed to alert those involved in the system when an error or anomaly occurs.

Question 10

Disaster Recovery Plan

Answer 10

The strategy that the organisation will put into action in the event of a disaster that disrupts normal operations in order to resume operations as soon as possible and recover data that relate to its processes.

Question 11

General Controls

Answer 11

Policies and procedures that relate to many applications and support the effective functioning of application controls.

Question 12

Hash Total

Answer 12

A total that is similar to a batch total but the number that is added has no meaning by itself (e.g. a hash total of customer numbers). See also batch total.

Question 13

Hot Site

Answer 13

A separate facility located away from the organisation’s usual premises that contains offices and the necessary resources (such as IT, telecommunications and data) to get the business back up and running in a minimal amount of time after a disaster occurs.

Question 14

Independent Review

Answer 14

A control tool where the work of one person is reviewed by another, thus creating accountability.

Question 15

Information Processing Controls

Answer 15

Controls put in place within the organisation to work towards the accuracy, completeness and authorisation of transactions.

Question 16

Input Accuracy

Answer 16

The aim of ensuring all data entered into the system are correct.

Question 17

Input Completeness

Answer 17

The aim of ensuring all transaction events and all required data relating to those events are captured within the system.

Question 18

Input Controls

Answer 18

Controls with the aim of detecting errors or irregularities at the time data are first entered into the system.

Question 19

Input Validity

Answer 19

The aim of ensuring that data entered into the system are in the correct format and valid.

Question 20

Online Data Gathering and Batch Processing

Answer 20

Data from transactions are stored immediately but related data files are updated in a batch.

Question 21

Online Real-time Data Processing

Answer 21

Data from transactions are captured immediately and the associated data file is updated immediately.

Question 22

Output Controls

Answer 22

Controls designed to protect the outputs of the system.

Question 23

Performance Reviews

Answer 23

Activities that involve some form of review or analysis of performance.

Question 24

Physical Controls

Answer 24

Controls that are put in place to physically protect the resources of the organisation.

Question 25

Preventive Controls

Answer 25

Controls designed to stop errors or irregularities occurring.

Question 26

Processing Controls

Answer 26

Controls that operate with the aim of detecting any errors or irregularities during the processing of data.

Question 27

Segregation of Duties

Answer 27

The concept that certain key functions are incompatible and should not be performed by the same person.

Question 28

Timeliness

Answer 28

The aim of ensuring that information and data are available for users when required.