Suppose a company is experiencing problems with omitted transactions in the conversion processi.e., inventory transactions are not always being recorded as they occur. Refer to Exhibit 77 to describe at least three internal controls that should be in place to help alleviate such problems.

Control Description Financial Mathematical sums of dollar amounts or item counts. Useful because they typically identify the amount of a journal entry totals: made in the financial accounting system. Tested by comparing system-generated totals with totals computed by auditors. Control totals Batch totals Hash totals Mathematical sums of data that are meaningless to the financial statements (such as vendor numbers or check numbers), but useful for controlling the data and especially for detecting possible missing items. Tested by comparing system-generated totals with totals computed by auditors. Completeness Checking the number of entries (record counts) or the order of documents in a series (sequence verification). Useful for tests or determining whether application records are complete or if any items are incorrectly included more than once. Also ensures redundancy that processing takes place only when all fields within the data file are filled in. Tested by comparing system-generated counts tests: with counts/listings prepared by auditors. Record counts Sequence checks Limit tests Scanning entries for reasonable limits, such as predetermined limits on check amounts or a customer's credit. Useful in preventing errors and unauthorized processing. Tested by comparing programmed limits with company policies. Validation Scanning entries to verify whether there is missing or bogus information. Entries are reviewed for valid dates and labeling, checks records are reviewed for reasonable values and sequences, and fields are reviewed for valid limits, range, or missing data. Tested by comparing programmed information with predetermined values documented in the program code. Field checks Scanning entries to determine that data exist in the proper alpha or numeric format. Useful in preventing processing errors due to unrecognized data. Tested by comparing the data format with program code