Question

In this age of high technology and computer-based information systems, why are accountants concerned about physical (human) controls? 

 

Answer 1

This class of controls relates primarily to the human activities employed in accounting systems. These activities may be purely manual, such as the physical custody of assets, or they may involve the use of computers to record transactions or update accounts. Physical controls do not relate to the computer logic that actually performs these accounting tasks. This is the subject matter of Chapter 16. Rather, they relate to the human activities that initiate such computer logic. In other words, physical controls do not suggest an environment in which clerks update paper accounts with pen and ink. Virtually all systems, regardless of their sophistication, employ human activities that need to be controlled.

Human activities in accounting systems, whether manual or computer-based, form physical controls, separate from computer logic. These ensure transaction integrity.