Material weakness, internal audit, change in control risk 1. Which do you think matters more to Fisher's board of directors: Why do you think so?
Many accounting firms have changed the way their auditors evaluate inter- nal control. Instead of preparing flowcharts documenting transaction flows, they only docu- ment the controls that have a bearing on specific financial statement assertions.
This shift in documentation marks a change in the structure of the internal control evaluation task from transaction flow to control objective. The case includes dis- cussion and objective format questions and is relatively short, which means it can be used as an in-class or out-of-class exercise or an in-class testing or assessment device on internal control evaluation.
Control objective, Instructional case, Internal control evaluation, Knowledge structure, Transaction flow. In the narrative that follows about Apex Corporation, you will find: A discussion of the various computer centers the general computing environment c.
A description of the control environment for computer-based processing d. An explanation of the purchasing system by the control objectives for the system About Apex Apex is a multi-national distributor of electronic parts, headquartered in New York City NYC. The company sells 24 classes of products, some of which are considered high tech and some of which rely on mature technology.
Apex owns warehouses in different locations in the U. Apex also has local sales offices in most states and in several foreign countries.
The ware- house distribution offices and sales offices local offices report to regional offices in seven locations worldwide.
A staff of three computer auditors is responsible for the review and audit of the world- wide operations of Apex. Both the local and regional offices operate with minimal staffing, typically with one person performing all accounting and administrative functions in each local office and two or three people 64 Journal of Information Systems, Spring performing those functions in the regional office.
The managers in each office are production ori- ented, spending most of their time with the sales force or in the warehouse.
General Computing Environment Each regional office is responsible for the accounting functions for all sales and distribution offices in its area. Each region has its own computer, which performs all accounting-related data entry and some accounting processing. The data that are transmitted daily for these two applications include all filled customer sales orders ready to be billed for the revenue system and all invoices for the purchasing system.
Company policy requires that users be included in every aspect of the management and budgeting of the IS department. Users and IS personnel are involved in the selection of all mainframe software purchased from software vendors. Microcomputer software that does not generate data for other departments is selected independently by the user departments.
Therefore, application reviews are performed only for fully implemented systems.
To perform an orderly, systematic evaluation of system of internal control, management should the segment the agency into "assessable units." An assessable unit has certain primary characteristics. the internal control system and its effectiveness – appears in the enterprise. So, the scientific article analyzes the internal control system, the combination of . COSO – Internal Control Findings. September 17, Understand how to use the Framework to identify internal control deficiencies/findings 2. Understand internal control deficiencies that should lead to findings 3. Understand the key elements of an internal – Lack of adequate performance evaluation system – Ineffective.
Be- cause computer controls in the regional offices are considered to be extremely weak, the external audi- tor has not reviewed controls on the regional computers.Evaluation of the Internal Audit Function The information contained in this guidance paper is provided for discussion purposes.
As such, it is intended to provide the reader and the entity with general information of interest and not to. These consists of all accounting, financial and monetary control techniques and systems built into the internal control system to promote and encourage the attainment of the objectives on internal controls.
2 Internal Control Definition Internal control is broadly defined as a process, effected by an entity's board of directors, management and other personnel.
Therefore, internal control system provides assurance to the management of the dependability of accounting data used in making decision. Decisions made by management becomes company policies and to be effective, these policies must be communicated throughout .
In business and accounting, information technology controls (or IT controls) are specific activities performed by persons or systems designed to ensure that business objectives are yunusemremert.com are a subset of an enterprise's internal yunusemremert.com control objectives relate to the confidentiality, integrity, and availability of data and the overall management of the IT function of the business.
Auditors' evaluations of internal control over payroll systems based on profiles of system characteristics were studied using a quasi-experimental research design.