Transaction-Related Control Objective Not Met in the Situation of Recording the Entry to the Wrong Account

  Transaction-Related Control Objective Not Met in the Situation of Recording the Entry to the Wrong Account In the given situation where an entry is recorded to the wrong account in a previous exercise, the transaction-related control objective that is not met is accuracy. Accuracy is a crucial control objective in accounting systems, ensuring that financial records reflect the true and correct state of the organization's transactions. By recording an entry to the wrong account, the accuracy of the financial information is compromised. The accuracy control objective aims to guarantee that all transactions are correctly recorded, reflecting their true impact on the financial statements. This objective helps ensure that financial information is reliable, allowing stakeholders to make informed decisions based on accurate data. When an entry is recorded to the wrong account, it distorts the financial information by misrepresenting the nature of the transaction. This can lead to incorrect financial statements and misguide decision-making processes. It becomes challenging to assess the financial health of the organization and accurately evaluate its performance. Furthermore, inaccurate financial records can result in compliance issues and potential legal consequences. To maintain accuracy as a control objective, it is essential to implement effective internal controls, such as segregation of duties, review processes, and verification procedures. These measures help ensure that transactions are correctly recorded, and errors or discrepancies are promptly identified and rectified. In summary, recording an entry to the wrong account violates the accuracy control objective in transaction-related controls. It compromises the reliability of financial information, hinders decision-making processes, and may lead to compliance issues. Maintaining accuracy requires implementing robust internal controls to ensure transactions are recorded correctly and promptly rectifying any errors. Transaction-Related Control Objective Not Met in the Situation of Skipping the Recording of Utilities Expense In the situation where you skipped recording utilities expenses in a previous exercise, the transaction-related control objective not met is completeness. Completeness is a fundamental control objective in accounting systems, ensuring that all relevant financial transactions are recorded. By failing to record utilities expenses, a crucial transaction is omitted from the financial records, leading to incomplete and inaccurate financial information. The completeness control objective aims to capture and record all transactions that have an impact on an organization's financial statements. It ensures that no material transactions are missed, providing stakeholders with a comprehensive understanding of the organization's financial position and performance. When utilities expenses are skipped, it distorts the financial information by omitting a significant expense from the records. This can lead to an understatement of expenses and overstatement of profits, resulting in misleading financial statements. Stakeholders relying on this incomplete information may make uninformed decisions regarding the organization's financial health. To maintain completeness as a control objective, it is crucial to establish robust internal controls. These controls may include maintaining a well-defined chart of accounts, implementing proper authorization procedures for recording transactions, and conducting periodic reconciliations. By adhering to these internal controls, organizations can ensure that all relevant transactions, including utilities expenses, are accurately recorded. This helps provide a complete and accurate picture of the organization's financial position and performance. In conclusion, skipping the recording of utilities expenses violates the completeness control objective in transaction-related controls. It results in incomplete financial information, misrepresents the true financial position of the organization, and may lead to uninformed decision-making. Adhering to robust internal controls is necessary to ensure all relevant transactions are accurately recorded, maintaining completeness as a crucial control objective.

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