APPLICATION CONTROL:

INPUT CONTROLS
By: Calubaquib, Olive B.
Camilo, Robelyn N.
Computer 4
Professor Cristy M. Gonzaga
MWF 1-2pm
2nd Semester S.Y.2011-2012
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Table of Contents
INTRODUCTION
DEFINITION OF TERMS
TOPICS
CASE STUDY
SUMMARY
BIBLIOGRAPHY

Introduction
In addition to IT controls, SOX requires management and
auditors to consider application controls relevant to financial
reporting. Application controls are associated with specific
applications, such as payroll, purchases and cash
disbursements systems.
These fall into 3 broad categories:

Input

Processing

Output

Goal of Input Controls

Valid, accurate and complete input data

Definition of Terms

Input Control
Check Digit
Missing Data Checks

are programmed procedures (routines) that

perform tests on transaction data to ensure
that they are free from errors.
data code is added to produce a control
digit.
control for blanks or incorrect justifications.

Numeric Alpha Checks

verify that characters are in correct form.

Limit Checks
Range Checks
Reasonableness Checks

Validity Checks
Transcription Errors
Transposition Errors

identify values beyond pre-set limits.

identify values outside upper and lower
bounds.
compare one field to another to see if relationship
is appropriate.
compares values to known or standard values.
wrong character or value
right character or value, but in wrong place

Input Controls
Topics

Check Digits
Missing Data Check
Numeric-alphabetic Check

Types

Limit Check
Range Check
Reasonableness Check
Validity Check

Input Controls
The purpose of input controls is to ensure that each
transaction is authorized, processed correctly and
processed only once. An edit program substantiates input
by comparing fields to expected values and by testing
logical relationships. Input control routines should be
designed into the system at different points, depending in
whether transaction processing is real time or batch time.

Check Digit
Data codes are used extensively in transaction processing
systems for representing such things as customer accounts
, items of inventory, and general ledger accounts in the
chart of accounts.

Real-time
Systems
are placed at the data
Collection stage to monitor
data as they entered
from terminals.

Batch
Systems

often collect data in transaction

files, where they are temporarily held
for subsequent processing.
In this case, input control tests are
performed as a separate procedure
(or run) prior to the master
file update process.

In any case, transaction data should never be used to update

master files until the transactions have been tested for validity,
accuracy, and completeness. If a record fails an input control
tests, it is flagged as
an record
error

Two Common Classes of Data Input Errors

cause such processing problems
I. Transcription Errors
Addition Errors

occur when an extra digit or

character is added to the
code. Example: inventory
item number

182491 as 1824911

Truncation Error

occur when a digit or

character is removed
from the end of the
code. Example:
inventory item number

182491.
would be
recorded as 18249

Substitution Errors

are the replacement of

one digit in a code with
another. Example:
code number

182491
is recorded
as 182421.
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II. Transposition Errors

Single transposition errors

occur when two adjacent

digits are reversed.
Example:

182491
is recorded as 184291

Multiple transposition errors

occur when
nonadjacent digits are
transposed. Example:

142891.

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The check digit can

be located anywhere
in the code, as a
prefix, a suffix, or
embedded someplace
in the middle. The
simplest form of
check digit is to sum
the digits in the code
and use this sum as
the check digit

Customer account code 5372

The calculated check digit would be

5+3+7+2=17
By dropping the tens column, the check digit 7 is added to
the original code to produce, the new code 53727.

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If a substitution error occurred and the above code

were entered as 52727
The calculated check digit would be 6
5+2+7+2=16

Transposing the first two digits yield the code 35727,

which still sums to 17 and produces the check
digit 7. This error would go undetected.

During data entry,

the system can
recalculate the
check digit to
ensure that the
code is correct.
It only detects
transcription
errors.

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Steps in Modulus 11
1.
Assigned
weights-each
digits in the code
is multiplied by a
different weight.
Using weight of
5,4,3, and 2.

2.

3.

Title
Sum
thein here Divide by
the
products
modulus

4.
Subtract
the
remainder
from the
modulus to
obtain the
check digit

5.
Add the
check digit
to the
original
code to
yield the
new code

. 62/11=5
11-7=4
25+12+21+4=62
with
[check
53724
remainder
digit] of 7
Digit
Weight
5
52=5
3
4=12
7
3=21
2
2=4
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Missing Data Check

If the data are not properly justified or if a character is
missing, the value in the field will be improperly
processed. When the control routine detects a blank
where it expects to see a data value, the error is
flagged.

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Numeric-Alphabetic Check
This control identifies when data in a particular field are in the wrong form.

Numeric
Check

Ensures that only

numbers are entered
into and accepted by
the system where only
numbers are required to
be entered. A
customers account
balance should not
contain alphabetic data
and the presence of it
will cause a data
processing error..

Alphabetic
Check

Ensures that letters are

entered into and
accepted by the system
where only letters are
required to be entered.
A persons name should
only include letters from
A-Z so that it would not
be an error

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Limit Check
Limit check are used to identify field values that
exceed an authorized limit.

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Range Check
Many times, data have upper and lower limits to
their acceptable values..
The purpose of this control is to detect keystroke
errors that shift the decimal point one or
more places.
.

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Reasonableness Check
The error above may be detected by a tests that
determines if a value in one field, which has
already passed a limit check and a range check, is
reasonable when considered along with data in
other fields of the record.

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Validity Check
It compares actual field values against known acceptable
values. This control is used to verify such things as
transaction codes, state abbreviation, or employee job
skill codes.
If the value in the fields does not match one of the
acceptable values, the record is flagged as an error.

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Case Study

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Summary
Controls over input provide reasonable assurance that data received for
processing have been properly authorized, converted into machine-sensible
form and identified. They also provide reasonable assurance that data
(including data transmitted over communication lines) have not been lost,
suppressed, added, duplicated or otherwise improperly changed. Moreover,
input controls relate to rejection, correction and resubmission of data that
were initially incorrect. Classes of input controls include check digit which
has two common types of data input errors; transcription errors and
transposition errors, missing data check, numeric-alphabetic check, limit
check, range check, reasonableness check and validity check.

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Bibliography
Accounting Information Systems by James Hall 5th edition
http://www.authorstream.com/Presentation/mykelledean-332830input-control

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Thank You!

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