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SU5. CONTROLS: TYPES & FRAMEWORKS (5.1. OVERVIEW OF CONTROL…
SU5. CONTROLS: TYPES & FRAMEWORKS
5.1. OVERVIEW OF CONTROL
DEFINITIONS
A. CONTROL: actions/manage risk/increase likelihood
b. CONTROL PROCESSES: policies, procedures, activities--> risk contained within acceptable level
c. CONTROL ENVIRONMENT
integrity & ethical values
Management's philosophy & operating style
organizational structure
assignment of authority & responsibility
competence of personnel
CONTROL PROCESS
a. Require feedback--> for measurement & correction
b. Steps: Standards --> performance --> deviations --> corrective actions --> reappraise standards
c. Evalutaion-reward system
d. IC only provides REASONABLE ASSURANCE
INHERENT LIMITATIONS:
Human judgement
Management override ICs
Collusion
Cost > benefits
CHARACTERISTICS OF AUTOMATED PROCESSING
Transaction trails
Uniform Processing of transactions
Segregation of Functions
Potential for Errors & Fraud
Potential for Increased Management Supervision
Initiation or Subsequent Execution of Transactions by Computer
Dependence of Controls in other areas on Controls over Computer Processing
MANUAL CONTROLS VS AUTOMATED CONTROLS
ROLES OF IA IN CONTROL
5.2. TYPES OF CONTROLS
5.3. CONTROL FRAMEWORKS