Student Forums CMA Part 1 Section E: Internal Controls E.2. System Controls and Security Measures Question ID: CIA 596 I.57 (Topic: System Application Controls)

Question ID: CIA 596 I.57 (Topic: System Application Controls)

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  • #214666
    Maria Elsa
    Participant

    Hi,

    I don’t understand how a limit check could catch certain types of errors within the payment amount field of a transaction.

    A limit and range check is simply a maximum or minimum number for a record.

    Why should you put a limit or range on a payment amount field? if say for example the payment due is $1,000,000, and was erroneously recorded as $1,500,000, how can a limit check detect that is incorrect?

    Or have I misunderstood the meaning of a payment amount field here?

    Appreciate any feedback.

    Thanks

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  • #214670
    Kevin Hock
    Participant

    Maria,

    The idea of a limit check is that you know that your payments will be within a certain range. For example, using HOCK international, we know that our study materials packages, without discounts, range from roughly a minimum of $150 up to a maximum of around $1,700. So, we know that if we were entering a sale, that if the amount is less than $150 or more than $1,700 that is is probably an error. For example, we would not have a sale of $15 or of $17,000, and a limit check would catch both of these data entry errors.

    Does that make more sense now?

    Kevin

    #214671
    Maria Elsa
    Participant

    Hi Kevin,

    Yep, thanks, that made sense.

    Maria

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