IOFM Updated APS Exam Questions and Answers by coen

The current thinking on maintaining a petty cash fund is that it ispractically obsolete and should be eliminated, if possible, due to the availability of more efficient and secure alternatives, such as payment cards or electronic reimbursements. Petty cash funds are prone to mismanagement, theft, and lack of oversight, and modern AP practices favor digital solutions for small transactions.

The web source from SAP Concur states: “Petty cash funds are increasingly considered obsolete, as payment cards and electronic reimbursements offer more secure and trackable alternatives for small transactions.” This directly supports Option A. The other options are incorrect:

Option B: Requiring three individuals to sign off is excessive and not a standard practice.

Option C: Petty cash is not considered a best practice, even in service or consulting businesses.

Option D: Petty cash is typically managed by AP or administrative staff, not treasury executives.

The IOFM APS Certification Program covers “Internal Controls,” including best practices for managing small transactions. The curriculum’s focus on “peer-tested best practices” aligns with the trend toward eliminating petty cash in favor of modern payment methods.

Procurement card (P-card) statements provide purchase data at different levels of detail. Level 3 detail includes comprehensive transaction information, such as itemized descriptions, quantities, unit prices, and merchant category codes, making it suitable for conducting spend analysis to track spending patterns and optimize procurement strategies. Level 1 provides basic data (e.g., merchant name, amount), and Level 2 includes additional data (e.g., tax amounts), but neither is sufficient for detailed analysis. Level 4 is not a standard term in P-card reporting.

The web source from Corcentric explains: “Level 3 data on P-card statements includes detailed transaction information, such as line-item details and quantities, enabling organizations to perform robust spend analysis.” This confirms that Level 3 detail (Option C) is necessary for spend analysis.

The IOFM APS Certification Program covers “Payments,” including P-card program management and reporting. The curriculum’s focus on “peer-tested best practices” supports the use of Level 3 data for effective spend analysis in P-card programs.

In the context of technology and accounts payable, the acronymASPstands forApplication Service Provider, which refers to a third-party provider that delivers software applications over the internet, typically on a subscription basis. This is distinct from automated secure processing (Option A), accounting standards protocol (Option C), or accrual statement period (Option D), which are not standard terms in this context.

The web source from NetSuite states: “An Application Service Provider (ASP) delivers software applications over the internet, allowing businesses to access tools like AP automation without on-premises infrastructure.” This directly supports Option B.

The IOFM APS Certification Program covers “Technology and Automation,” including cloud-based and hosted software solutions like those provided by ASPs. The curriculum’s focus on “peer-tested best practices” aligns with understanding ASPs as a delivery model for AP tools.