What are data processing controls?
The BEC section of the CPA exam will test you on the key data processing controls. The purpose of processing controls is to verify that data was properly processed through the system. Processing controls will identify if the data was processed incorrectly. The company would have data entry input controls to verify data is inputted properly into the system, but then it would need data processing controls to maintain high integrity and quality in the data. The main data processing controls include:
1) Run-to-run totals (sum checks): Ensures that the cumulative totals of records from one data processing run to another are consistent.
2) Data matching: When the data across various sources is compared, does it all match or agree? For example, does the date on the PO agree to the date on the corresponding invoice?
3) Data sequence checks: If data is supposed to be in sequential order, is the sequence complete, or is data missing? For example, if there should be invoices numbered 1 through 10, are all 10 listed in the system data?
Data processing controls are key controls that every company should have implemented in a business process. Other key controls include segregation of duties, data entry input controls, controls over standing data, account reconciliation controls, spreadsheet controls and supervisory controls.
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