AccountancyCBSE Class 12 · Overview of Computerised Accounting System

Security Features of a Computerised Accounting System: Class 12 Notes and Cases

Updated 15 October 2026 · Fact-checked

A computerised accounting system protects its data with three main security features: password security, which controls who can open the system and what each user can see or change; data audit, which records who changed what so responsibility can be fixed; and data vault, which encrypts data so that it cannot be read even if it reaches the wrong hands.

Notice each feature does one job: the password controls entry, the audit tracks who changed what, and the vault encrypts data.

Illustration drawn for QuestionBuddy.

Understand Security Features of Computerised Accounting

Why security is needed. Accounting data are confidential (prices, salaries, customer lists, profits) and must stay accurate. Computerised data can be copied, altered or destroyed far more easily and quickly than paper books, by insiders or outsiders (hackers, viruses). Security therefore protects confidentiality, integrity and availability of data.

1. Password security.

A password is the key to access the system.
User rights can be set by the organisation's policy: one user may enter vouchers but not see salaries; another may view reports but not change entries.
This limits damage from mistakes and misuse and supports internal control.

2. Data audit.

The system keeps a record of who changed what, and when, in the original data (an audit trail).
It helps auditors and management fix responsibility and detect manipulation, protecting data integrity.

3. Data vault (encryption).

Provides extra security by encrypting data: scrambling it with a key so that it is unreadable without decryption.
Even if data are stolen or intercepted, they cannot be understood.

Good practices that support these features. Regular backups stored separately; antivirus and firewalls; changing passwords periodically; logging out of unattended terminals; restricting physical access to servers.

Link with limitations. Security features answer the CAS limitations of hacking, viruses and unauthorised access; backups answer the risk of data loss.

Security Features of Computerised Accounting: key facts

Three security features: Password security; Data audit; Data vault; PDD.
Goals of security: Confidentiality, integrity, availability
Encryption: 1.Readable data + key
2.scrambled data; scrambled data + key
3.readable data

How to answer Security Features of Computerised Accounting questions

Security questions are short theory or case items. Match the risk in the case to the feature that answers it.

1Identify the risk: unauthorised access, undetected changes, or stolen data.
2Unauthorised access → password security and user rights.
3Undetected changes → data audit.
4Stolen or intercepted data → data vault (encryption).
5Data loss from crashes → backups (a practice, not one of the three features).
6Write the feature name and one line of how it helps.

Security Features of Computerised Accounting in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Data audit fixes responsibility

Suppose an accounts clerk in a distribution company changes a customer's opening balance from ₹48,000 to ₹8,000 a week after the books are closed, and nobody notices until the customer disputes a reminder.

Which security feature would help management find out what happened, and which would have prevented it?

Try it first, then show the solutionSolution

Data audit records who changed the balance, from what to what, and when.
Password security with user rights could have stopped a clerk from editing closed-period balances.
Together they detect and prevent manipulation.

Answer: Data audit reveals the change and the user responsible; password security with proper user rights would have prevented the clerk from altering closed balances in the first place.

Memory hook: Passwords keep people out; audit trails catch those already in.

Tricks to remember Security Features of Computerised Accounting

Short memory aids. Say each one aloud once, then use it on a question the same day.

PDD: Password, Data audit, Data vault
Lock the door (password), watch the room (audit), lock the safe (vault).
Use it when: Listing the three features.
Vault = encryption
Data vault scrambles data so a thief gets only gibberish.
Use it when: Encryption MCQs.
Audit = who, what, when
Data audit answers three questions about every change.
Use it when: Data audit questions.

Security Features of Computerised Accounting: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Encryption · 1 mark · MCQBoard level

The security feature of CAS that scrambles data so that it cannot be read by unauthorised persons is:
(a) password security
(b) data audit
(c) data vault
(d) backup

Try it first, then show the solutionSolution

Data vault provides security through encryption.

Answer: (c) data vault

Example 2: Three features explained · 3 marks · Short answerBoard level

Explain the security features of a Computerised Accounting System. (3 marks)

Try it first, then show the solutionSolution

Password security: a password is required to access the system, and user rights decide what each user may see or change.
Data audit: the system records who changed what and when, fixing responsibility.
Data vault: data are encrypted so they cannot be read even if stolen.

Answer: Password security, data audit and data vault, each with one line.

Example 3: Need for security · 3 marks · Short answerHarder board level

Why does a Computerised Accounting System need special security features? Give three reasons. (3 marks)

Try it first, then show the solutionSolution

Confidentiality: accounting data such as salaries and margins must not reach competitors or unauthorised staff.
Integrity: electronic records can be altered quickly without a trace unless changes are logged.
External threats: hacking and viruses can steal or destroy data.

Answer: Confidentiality, integrity and protection from external threats (with one line each).

Example 4: Match risk to feature · 3 marks · Short answerHarder board level

Match each risk to a security feature: (i) an outsider intercepts a backup file on its way to a remote server; (ii) a junior clerk views the salaries of all staff; (iii) the manager cannot find out who reversed a large sale entry. (3 marks)

Try it first, then show the solutionSolution

(i) Data vault: encrypted files are unreadable.
(ii) Password security with user rights: restrict salary data.
(iii) Data audit: logs who changed the entry.

Answer: (i) Data vault; (ii) password security; (iii) data audit.

Example 5: Is a password enough? · 1 mark · Assertion-reasonHOTS / competency

Assertion (A): Password security alone is sufficient to keep accounting data safe.
Reason (R): Passwords can be stolen or shared, and authorised users can still make unrecorded changes without data audit.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.

Try it first, then show the solutionSolution

R shows why one layer is not enough; A is false.

Answer: (d) A is false, but R is true.

Where students lose marks in Security Features of Computerised Accounting

The slips examiners see most often, and what to write instead.

Mistake: Listing backup as one of the three security features
It is a common safety practice.
Wrong working
Features: password, backup, antivirus.
Right working
Features: password security, data audit, data vault.
Do this: Use the textbook's three; mention backups only as supporting practice.
Usually costs: 1 mark.
Mistake: Confusing data audit with statutory audit
Same word 'audit'.
Wrong working
'Data audit is the annual audit by a chartered accountant.'
Right working
'Data audit is the system's record of changes made to data.'
Do this: It is a software feature.
Usually costs: 1 mark.
Mistake: Explaining encryption as a password
Both protect data.
Wrong working
'Data vault means a strong password.'
Right working
'Data vault encrypts data so it is unreadable without the key.'
Do this: Vault = encryption.
Usually costs: 1 mark.
Mistake: No link to user rights
Describing password as only a login.
Wrong working
'Password lets the user log in.'
Right working
'Password with user rights controls what each user can see or change.'
Do this: Mention user rights.
Usually costs: 1/2 mark.

Exam tips

Name all three features even if asked to explain any two; it shows completeness.
Use the word 'encryption' with data vault.
Case questions often describe a risk; answer with the feature that addresses it.
Security features are a frequent 1-mark MCQ and 3- or 4-mark theory item in Part B Option II.

Practice questions on Security Features of Computerised Accounting

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Which security feature of CAS records changes made to data and the user who made them?
(a) Data vault
(b) Data audit
(c) Password security
(d) Encryption
Hint
Who, what, when.
Answer
(b) Data audit
Q2 · 1 mark · MCQBoard level
Encryption of data is provided by:
(a) password security
(b) data audit
(c) data vault
(d) contra voucher
Hint
The safe.
Answer
(c) data vault
Q3 · 3 marks · Short answerHarder board level
How do user rights strengthen password security? Give an example. (3 marks)
Hint
Different users, different access.
Answer
User rights, set by policy, restrict what each user can see or do after logging in. For example, a billing clerk may create sales vouchers but cannot view payroll or edit past entries, so a stolen or misused password causes limited harm.
Q4 · 3 marks · Short answerHarder board level
Explain the term 'data audit' and state two benefits. (3 marks)
Hint
Trail of changes.
Answer
Data audit is a feature that records who changed which data, when, and from what to what. Benefits: it fixes responsibility for changes and deters manipulation; it helps auditors verify the integrity of records.
Q5 · 3 marks · Short answerHarder board level
Distinguish between password security and data vault. (3 marks)
Hint
Access vs readability.
Answer
Password security controls access: only authorised users can enter, and user rights limit what they see. Data vault protects the data itself by encryption, so even if files are taken out of the system they cannot be read.
Q6 · 1 mark · Assertion-reasonHarder board level
Assertion (A): Data vault protects data even when it is stolen.
Reason (R): Data vault encrypts data, making it unreadable without the key.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
Hint
Encryption.
Answer
(a) Both A and R are true, and R is the correct explanation of A.
Q7 · 4 marks · Short answerHOTS / competency
Suppose a small firm uses one shared password for all five staff on its accounting software. Identify two security weaknesses and suggest improvements. (4 marks)
Hint
Responsibility and access levels.
Answer
Weaknesses: (1) no individual responsibility, since data audit cannot tell which person made a change; (2) everyone has full access, including to confidential data. Improvements: separate user IDs and passwords, user rights by role, periodic password changes, and encryption of backups.
Q8 · 3 marks · Short answerHOTS / competency
A company encrypts its data and uses strong passwords, but keeps no backup. Which risk remains, and why do security features not cover it? (3 marks)
Hint
Availability.
Answer
The risk of data loss from disk failure, power outages or corruption remains. Password security, data audit and data vault protect confidentiality and integrity but cannot restore destroyed data; only regular backups stored separately do that.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Name the three security features of CAS.Show answer
Password security, data audit and data vault.
2.What does data vault use?Show answer
Encryption.
3.What do user rights control?Show answer
What each user can see or change.
4.Which feature fixes responsibility for changes?Show answer
Data audit.
5.Which practice protects against data loss?Show answer
Regular backups.

Security Features of Computerised Accounting: frequently asked questions

What are the security features of CAS in Class 12?

Password security (with user rights), data audit (record of changes) and data vault (encryption).

What is encryption?

Scrambling data with a key so that only someone with the key can read it.

Why is data audit important?

It shows who changed what and when, deterring manipulation and helping auditors trust the records.

Are backups a security feature?

They are a supporting practice against data loss; the three textbook features are password security, data audit and data vault.