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CA Final · Financial Reporting · Accounting and Technology

Kaveri Textiles Ltd. uses an enterprise resource planning (ERP) system to post sales invoices automatically to the general ledger. The CFO wants assurance that every invoice raised in the sales module is posted exactly once, and only once, to the ledger. Which category of control best addresses this specific objective?

Application controls over completeness and accuracy of processing best address this objective. They operate at transaction level, using sequence checks, reconciliations and batch totals so each invoice posts once. General IT controls and entity-level controls support the environment but do not directly verify individual transaction posting.

  1. AApplication control over completeness and accuracy of processingCorrect
  2. BGeneral IT control over physical access to the data centre
  3. CGeneral IT control over program development methodology
  4. DEntity-level control over the code of conduct

Explanation

Assurance that each transaction is processed completely and once only is an application control objective (input, processing and output controls such as batch totals and sequence checks). Physical access and program development are general IT controls that support the environment but do not directly check transaction-level completeness. A code of conduct is an entity-level control.

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