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Application Controls

Application controls are built into accounting applications to ensure transactions are authorized, complete, accurate, and processed timely. They are categorized into input controls (completeness, accuracy, authorization), processing controls, and master file controls. Each category includes specific examples of how to implement these controls effectively.

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2 views2 pages

Application Controls

Application controls are built into accounting applications to ensure transactions are authorized, complete, accurate, and processed timely. They are categorized into input controls (completeness, accuracy, authorization), processing controls, and master file controls. Each category includes specific examples of how to implement these controls effectively.

Uploaded by

munimpavel88
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Application Controls – Exam Ready Answer

Application controls are controls built into specific accounting applications (such as sales, purchases,
payroll).
Their purpose is to give reasonable assurance that all transactions are authorised, complete, accurate,
and processed on time.

Application controls can be grouped into the following types:

✅ 1. Input Controls – Completeness

These controls ensure all transactions are entered into the system.

Examples:

 Control totals (manual or programmed)

 Document counts

 One-for-one checking of output against source documents

 Programmed matching with expected input files

 Procedures to re-submit rejected data

✅ 2. Input Controls – Accuracy

These controls ensure data is correct before processing.

Examples:

 Check data fields for:

o Digit verification (correct reference numbers)

o Reasonableness tests (e.g., VAT vs total)

o Existence checks (valid customer or supplier)

o Character checks (no invalid characters)

o Mandatory fields (no missing information)

o Permitted range (values within allowed limits)

 Manual review of output and reconciliation with source documents

✅ 3. Input Controls – Authorisation

These ensure only authorised transactions are processed.


Examples:

 Manual checks for proper approval

 Ensuring only authorised personnel can input data

✅ 4. Processing Controls

These ensure data is processed correctly.

Examples:

 Batch reconciliations

 System warnings to stop logging out before processing ends

✅ 5. Master File and Standing Data Controls

These protect important permanent data (e.g., payroll records, customer lists).

Examples:

 One-to-one checking of master files with original documents

 Periodic (cyclical) reviews of all master files

 Record counts and hash totals to detect missing or changed records

 Controls on deleting inactive accounts

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