Internal Control and Risk Evaluation
Internal Control and Risk Evaluation
Accounting Information Systems 542
October 10, 2011 Analyze the risks in the systems that your team analyzed
An Accounting Information System is an integral part of the new design of Kudler’s computer system. Accountants do not necessarily need to understand completely how computers process data of the accounting application, but it is essential for them to understand the flowcharts and documentation that shows how this processing works. The purpose of the new system is to integrate the four Kudler locations. Centralizing the accounting system will save Kudler money by automating accounting, inventory, human resources, and purchasing. Additionally, implementing levels of security, the new system will help detect employee theft and fraud. There are always risks associated with implementing a new accounting system.
Identify all Risks and Internal Control points by
Incorporating the Controls and Risks into the Flowcharts
The record suggests that insufficient or deficient documentation costs organizations time and money; and that good documentation is as important as the software it describes. Two examples are document flowcharts and system flowcharts. A document flowchart traces the physical flow of documents through an organization from the departments, groups, or individuals who first create them to their final dispositions (2004, Bagranoff, p. 69). Information Technology function managers are principally responsible for administering the workflow, managing the computing environment, handling third-party services, and assisting users. Therefore, proper management of each of these responsibilities minimizes business and audit risks. Information Technology functions include security, input, processing, output, databases, backup, and recovery. Kudler’s internal controls is vitally important for the IT auditors to assess whether control risk is within a tolerable range or otherwise existing controls may have to be
Accounting Information Systems 542
October 10, 2011 Analyze the risks in the systems that your team analyzed
An Accounting Information System is an integral part of the new design of Kudler’s computer system. Accountants do not necessarily need to understand completely how computers process data of the accounting application, but it is essential for them to understand the flowcharts and documentation that shows how this processing works. The purpose of the new system is to integrate the four Kudler locations. Centralizing the accounting system will save Kudler money by automating accounting, inventory, human resources, and purchasing. Additionally, implementing levels of security, the new system will help detect employee theft and fraud. There are always risks associated with implementing a new accounting system.
Identify all Risks and Internal Control points by
Incorporating the Controls and Risks into the Flowcharts
The record suggests that insufficient or deficient documentation costs organizations time and money; and that good documentation is as important as the software it describes. Two examples are document flowcharts and system flowcharts. A document flowchart traces the physical flow of documents through an organization from the departments, groups, or individuals who first create them to their final dispositions (2004, Bagranoff, p. 69). Information Technology function managers are principally responsible for administering the workflow, managing the computing environment, handling third-party services, and assisting users. Therefore, proper management of each of these responsibilities minimizes business and audit risks. Information Technology functions include security, input, processing, output, databases, backup, and recovery. Kudler’s internal controls is vitally important for the IT auditors to assess whether control risk is within a tolerable range or otherwise existing controls may have to be
References: Bragranoff, N. A., Simkin, M. G., & Norman, C. S. (2008). Core Concepts of Accounting Information Systems (10th ed.). New York, NY: Wiley. Hunton, J. E., Bryant, S. M., & Bagranoff, N. A. (2004). Core Concepts of Information Technology Auditing. Hoboken, NJ: Wiley.