What are batched, and input control totals are established before delivery to data entry?

Billing premiums is a high-volume, repetitive transactional process common in the insurance industry. To ensure data integrity, individual premium transactions are grouped into batches. Before these batches are sent for data entry, input control totals (e.g., financial totals of premium amounts, record counts of policies) are calculated. These pre-calculated totals are later reconciled with the system's output totals after processing. This fundamental internal control procedure verifies the completeness and accuracy of the data entered, ensuring that all premiums are recorded correctly and no transactions are lost or duplicated during the data entry phase.

A. Coded applications are software programs, not transactional data. They are subject to development and change management controls, not batch processing for data entry.

C. Issuing policies is a more complex and less uniform process than billing. While it has controls, it is not the classic example of a high-volume, batched data entry task.

D. Business applications is an overly broad category that encompasses many processes. The question asks for a specific item being batched, making this option too general.

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1. Romney

M. B.

& Steinbart

P. J. (2018). Accounting Information Systems (14th ed.). Pearson. In Chapter 10

"Processing Integrity and Availability Controls

" the section on "Input Controls" details data entry controls. It specifies that "batch totals are used to manage the high volumes of transaction data... Examples include a financial total

a hash total

and a record count" (pp. 310-311). Premium billing is a prime example of such a high-volume transaction process.

2. National Association of Insurance Commissioners (NAIC). (2023). Financial Condition Examiners Handbook. In Volume 1

Section V

"Information Technology Review

" the handbook outlines the evaluation of application controls. It emphasizes verifying controls that ensure transactions for significant applications (such as premium billing and collection) are "recorded completely

accurately

and timely." Batching and reconciliation of control totals is a primary control activity reviewed by examiners to meet this objective. (See Appendix H - Evaluation of Controls in Information Technology).