Question

Controls that are designed to prevent, detect, or correct errors in transactions as they are processed through a specific subsystem are referred to as:

O general controls.
O application controls.
O physical controls.
O Two of the choices are correct.
O None of the choices are correct.

Answer 1

Application controls are designed to prevent, detect, or correct errors in transactions processed through a specific subsystem, making them the correct choice among the options provided.

Step-by-step explanation:

Controls that are designed to prevent, detect, or correct errors in transactions as they are processed through a specific subsystem are referred to as application controls. General controls are broader and are not specific to a transaction or application. Physical controls involve the security of the physical environment where the systems are located, and they safeguard against environmental hazards and unauthorized access. When discussing the reduction of errors in transaction processing through specific subsystems, application controls are the correct option.

For further understanding, application controls are directly related to the processing of individual transactions. These controls help ensure the completeness, accuracy, and validity of transactions. Examples of application controls include data entry validation rules, automated workflows that enforce processing steps, and reconciliation procedures. Such controls allow for an efficient and reliable transaction processing environment, directly impacting the integrity of the system's outputs.