Question

This is an Accounting Information System assignment

Identity and explain these 5 principles important to Accounting Information System reliability.

A function of an Accounting Information System is to provide internal controls to ensure data integrity. What is meant by the term internal control?

Identify and explain 3 main types of internal control.

Outline a control in the revenue cycle which could be relied on to ensure that all sales are properly captured in a manual Accounting System and therefore enhance data integrity.

Answer 1

Answer : -

5 principles of Accounting Information System

1) Cost effective : - Accounting information system must be cost effective. It should provide desired output and if the accounting information system is flexible, the system can make a contribution for the achieving objectives.

2) Useful output or Necessity : - Accounting information system must provide useful output or the necessary result. The information provided should be reliable, relevant, understandable.

3) Flexibility : - In Accounting Information System there must be an option to have provision for having changed information. The system should be flexible to meet the demands for change.

4) Relevance : - The information provided should in a timely manner. The financial information should be provided almost immediately for it to be relevant.

5) Compatability : The Accounting Information System should be able to confirm the companies activities and internal structures.

INTERNAL CONTROL

Meaning : - As per the definition provided by Accounting and auditing, internal control means a process for assuring the objective`s effectiveness and efficiency, reliable financial reporting and with laws and regulations.

Types of internal contr

1) Detective Internal Control : - The detective control is to find out the errors after the errors occurance in the accounts. This system is a part of Check and balance system. It is used to determine the effectiveness of the policies introduced.

2) Preventive Internal Control : - In preventive internal control, the errors and misstatements are prevented from happening. The Preventive Internal Control happens on a regular basis in the company.

3) Corrective Internal Control : - The corrective internal control helps to correct the misstatements or erro8or mistakes after happening to provide a correct financial information or reports for the company to work on.