Question

With respect to the Xero accounting information system, select three (3) controls in the system. With respect
to each of these controls:
a. Identify the control and the type of control.
b. Explain what the control aims to prevent, detect or correct.
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c. Explain the operation of the control (i.e. how the control works).
d. Evaluate the effectiveness of the control (i.e. whether, in your opinion, the control achieves its aims
and why)

Answer 1

Xero

Definition

Accounting software that runs in the cloud -- so business owners and their advisors always have instant access to real-time financial data: any time, anywhere, on any device

AB&C

Every small business owner knows cashflow is the key to success. The dashboard in Xero is designed to show your business cashflow at a glance. You instantly see how much cash is in the bank, which customers haven't paid their invoices and which bills you still owe. It's also easy to keep an eye on important numbers like revenue or wages.

With Xero accounting software, your customers can view invoices online, so the moment your invoice is opened, it's updated to show it's been viewed. You can even schedule invoices to be emailed automatically -- so Xero is doing a lot of the billing and collecting for you, around the clock. To help you get an even better understanding of your finances, you can invite your accountant to collaborate with you and produce management reports. They can add commentary, add footnotes to specific figures and even insert graphs to highlight what's happening with your finances. You can also run your business on the go, using the Xero Touch app on your mobile. Check the balances of all your bank accounts and credit cards on one place and send invoices on the spot. While your out and about, you often spend money you need to expense to the business. With Xero Touch, you simply snap a picture of the receipt -- it's instantly uploaded, ready to submit on your next expense claim. With a live view of your finances, it's never been easier to stay on top of cashflow -- freeing you up to do your best work.

3 Controls

1. Bank Reconcilation - Prevent

2. Inventory - Prevent, Detect and Correct

3. Information Security - Prevent

How controls Work

1. Bank Reconcilation - Prevent - It Helps to automatically and securely imports your bank transactions every business day. You save hours on admin and get daily updates on the state of your business finances. Xero connects with numerous banks globally so, chances are, your bank is one of them. It Hepls to Identify the Balances differences between you bank book and bank statement.

2. Inventory - Prevent, Detect and Correct - Inventory management software tools in Xero let you keep track of stock levels and values on a daily basis. Xero calculates the value of the goods you have on hand using the average cost method. Spend less time on data entry by setting up the things you buy and sell regularly as untracked items in Xero – just enter a description and price. Using inventory items makes creating quotes, invoices purchase orders and bills quicker and means fewer errors. The simple tracking software is great for independent retailers and wholesalers, or service providers who sell retail items.

3. Information Security - Prevent - Two-step authentication adds an extra layer of security to help protect your account. Each time you log in, you’ll need to enter a unique code generated by an app on your smartphone. Used by many internet banking and online services, two-step authentication makes it much harder for anyone to hack into your account We know that data security is important to you. We keep your information private, and only use it for agreed purposes. For instance, if you need help with a feature in Xero, you can choose to let Xero Support view your data while they help you.

Effectiveness

a. The control is highily effective, as it prevent, control and detect.

b. It helps to identify the loopholes and help to take early decision.

For Instance

1 Bank Reco - It Hepls to Identify the Balances differences between you bank book and bank statement. - It Saves Time

2. Inentory - it Helps to make proper aaccounting, helps to drive ageing of the inventory and helps to make provision on the basisi of ageing.

it helps to make proper valuation of inventory

3. IT security- 2 step authentication and login with unique code are useful

Conclusion

It is Useful tool and helps to make accounting easier.