MABINI COLLEGES INC.

Daet, Camarines Norte

PRE 5: QUIZ 1

Angelica D. Tolin BSA-III-B

Answer the following questions comprehensively. (10 points each)

1. Differentiate between manual accounting system and computerized accounting system.

Manual accounting system is a bookkeeping system for recording the business activity
transactions, which financial records are kept without the use of computer system that
has specialized accounting software. Business transactions are recorded using
accounting books, ledger, physical records and some pads of papers. A manual
accounting system has a lot of ledgers which have several ledgers with separate books
that record different types of accounts. The information in those books can be used to
prepare financial statements for the business. Computerized accounting systems are the
software programs that are stored on a company's computer, network server or can also
be accessed via internet. It is a system that process the financial transactions to make
and produce reports as per user requirements.
2. What are the advantages and disadvantages of using a computerized accounting
system?
Computerized accounting system provides major advantage including the speed and
accurate information. By using these systems these can be able to see the real time
state. If a company uses computerized accounting system, they can have instant access
to any accounting information for the main reason that each entered transaction is
actually posted to its respected account, all account information is always up to date.
Another is that it can easily produce document like sales receipts and sales invoices can
be printed in any moments. It eliminates time consuming manual process.
Aside from advantages, it also have disadvantages such as when personnel works with
computer, issues may arise. They may be completing year-end data for an accountant
and experience such as power shortage . There are also a higher possibility of acquiring
a virus and many failed to work. If potential users are not familiar with performing tasks,
it may result to incorrectly and inaappropriately.

3. Differentiate between general controls and application controls.

General controls can be apply to all computerized applications and consists of a
combination of software and hardware might as well including manual procedures that
creates an overall control environment. These controls are also related to the security,
use or design of programs on computer. It has the methods that always help to secure
data or information within those systems.
 Application controls includes to safeguards the specific computer applications. It consist
of both manual and automated procedures. The software only ensures that the only
authorized data gets processed by the application. These controls pertains to the
accuracy and completeness of the data that are entering the technology systems.
4. What is an audit trail? Discuss its role in the audit process.
Audit trail is a detailed, chronological record whereby accounting records, project details,
or other financial data are tracked and traced. An audit trail is often a regulatory
requirement in many financial areas, and even when not mandated are a business best
practice for a thorough and organized accounting department.
It is used to verify and track all kinds of transactions, work processes, accounting details,
trades in brokerage accounts, and more. In audit process, audit trail plays an important
role that are used to verify and track many types of transactions, including accounting
transactions and trades in brokerage accounts. It is also vital for them to identify and
discover what went wrong when a business is suffering from a data loss and
misconduct.
5. As future auditors, why is it important to always follow the Code of Professional ethics?
It is always important to follow the code of professional ethics or complying with the laws
and regulations that govern jurisdictions for us to avoid the negative outcomes that may
affect our reputations of being a professional. We should always act according to it to
test our capabilities that we are committed to our profession.