What does application controls mean on the CPA exam?
Application controls. Controls built into one business process or system, such as a validity check on an input field or a three-way match. They act on transactions.
Defined against AU-C 315.12.
Which CPA exam sections use application controls?
Application controls appears in the AUD section of the CPA exam.
Other terms defined against AU-C 315
- assessed risk: The auditor's judgment about the risk of material misstatement at the assertion level, combining inherent and control risk.
- control environment: The governance and management functions and the attitudes, awareness, and actions of those charged with governance and management concerning the entity's system of internal control.
- general controls: Controls over the IT environment as a whole -- access, change management, operations -- that everything else depends on.
- general IT control: A control over the entity's IT processes that supports the continued effective functioning of information-processing controls and the integrity of information.
- information and communication: One of the five components of internal control: how an entity obtains the information it needs and gets it to the people who have to act on it.
- information-processing control: A control over processing in an IT application or a manual information process that directly addresses a risk to the integrity of information.
- rights and obligations: The assertion that the entity genuinely owns the assets it reports and genuinely owes the liabilities.
- risk assessment procedures: The audit procedures designed and performed to identify and assess the risks of material misstatement at the financial statement and assertion levels.
Related terms
- complementary user entity controls: Controls a service organization assumes its customers are running.
- SQL injection: An attack that smuggles database commands through a field meant for ordinary input.
- tests of controls: Procedures that check whether a control actually operated as described throughout the period.
- internal control over financial reporting: A process designed to provide reasonable assurance regarding the preparation of reliable financial statements.