Untitled Essay, Research Paper

In accounting systems, certain controls are needed to guarantee that employees

are making their occupations decently and guarantee that the system runs decently. These

cheques are in the best involvement of the organisation. These controls come

in the signifier of internal and external controls for the system. The internal

controls are the cheques that are placed in the system my the company & # 8217 ; s

ain direction and managers. Today more and more companies are traveling from

the manual accounting systems to computerise accounting information systems.

The advantages of a computerized system are additions in the velocity and truth

of treating accounting information.

However, as systems become computerized, the internal controls for that system

has to be adapted consequently. This is because computerized systems bring

with them certain alone jobs that can merely be removed or minimized by

accommodating the present controls and adding new controls. These jobs are

& # 183 ; In a manual system there is a paper trail for the internal hearer

to follow. All records and minutess are kept on paper and so an hearer

has clear and documented cogent evidence of what has transpired. Computerized systems

seldom have a clear paper trail to follow. Since computing machines do all of the

sorting of the information the company seldom sorts the beginning paperss.

Besides the computing machine does most of the computations and treating so at that place would

non be the sum of certification that there would be in a manual system.

& # 183 ; Another job of computing machine systems is the fact that there can be

trouble in finding who entered the information. In a manual system the individuality

of the individual come ining the informations can be identified perchance by the individual & # 8217 ; s

handwriting. This can non be done in a computerized system. This makes it

really hard to find who is responsible for mistakes or fraud.

& # 183 ; Since the computing machines do all computations and treating mistakes can

occur due to bad design of the plan. This can be hard to observe

particularly if the mistake does non happen often and merely does so under

peculiar conditions.

& # 183 ; Computer systems besides offer new chances for fraud. If a computerized

system is non set up properly and certain cheques non set in so the computing machine

system can be used to victimize the company. The fact that it is hard

to follow who enters the informations merely adds to the magnitude of this. In order to minimise the hazards of mistakes or fraud happening

in the computing machine system certain controls have to be put into topographic point. These

controls can be broken up into three different classs. They are

1. Administrative Controls

2. Systems Development Controls

3. Procedural ControlsAdministrative Controls

Administrative controls are those controls are those controls

that are placed on the system to guarantee the proper organisation and processing

of informations. These administrative controls are

Division of responsibilities.

Duties are assigned to different persons in the

organisation. This is done in such a manner that no one individual can hold full

control over a dealing. This ensures that an person can non hold full

control over the creative activity and operating of the system. One ground for this

division is holding one individual commanding the system can ensue in fraud

if that individual is non wholly trusty. Another ground for the division

of responsibilities is to forestall the organisation from going wholly dependent

on the individual commanding the computing machine system. If this individual were to go forth

so the organisation would hold no 1 to run the system. The division of

responsibilities ensures that employees can go forth without holding any major consequence on

the system.Operation Controls

Operation controls are necessary controls since they since

they determine what the computing machine systems and the employees utilizing the system

have been making. These controls can come in the signifier of

& # 183 ; rotary motion of displacements

& # 183 ; responsibility logs

& # 183 ; a manual of operating instructions

& # 183 ; attending controls

& # 183 ; computing machine logs

These controls can let an hearer to track the exact

actions of the computing machine systems and employees. This certification allows

the to easy descry any mistakes or improper actions that have occurred.Files Controls

These controls are put in topographic point to minimise the figure

of mistakes and skip that occur in the file system. Good file controls

are

& # 183 ; Availability of a skilled technician

& # 183 ; Proper procedures for publishing and returning files

& # 183 ; proper labeling and indexing of files

& # 183 ; protection of storage media from dust, humidness, fire etc.

& # 183 ; Procedures for returning files for certain minimal periods

& # 183 ; Facilities for retrieving files that have been damaged or corrupted.

& # 183 ; Facilities for making backup transcripts of files.

The arrangement of these controls have really serious deductions. These controls

that information that is critical to the organisation is safe. The information in these

files must be protected from mistakes or fiddling whether knowing or

accidental.Hardware Security

The computing machine hardware is non merely of import to the processing

of the information but is besides a valuable fixed plus for the company. Therefore

controls for the protection of the hardware must be put into topographic point. Computer

hardware must be placed in a secure country where the entree to it is limited

merely to those who need to utilize it. Certain degrees of security must me maintained

e.g. merely the systems decision maker can hold entree to the CPU and storage

systems. The computing machine system must besides be placed in a control environment

to protect it from environmental jeopardies e.g. dust and humidness. Agreements

should be made to protect the computing machine against fires and power fluctuations.

There should besides be some controls in topographic point to retrieve the system in instance

the hardware fails. These controls would guarantee that the dislocation of the

hardware would non hold a serious consequence on the company.

Systems Development controls These are the controls that are put over the design and

execution of the system. These controls guarantee that the system is developed

with a minimal figure of errors.Standardization

One of import control is standardisation. These consist

of assorted criterions that are laid down by direction for the design and

development of the system. These criterions include the complete certification

of the development of the system. These criterions would non merely profit

in the correcting of jobs and updating of the system, the certification

would let the hearer to acquire a better thought of how the system works. This

would assist the hearer in descrying possible jobs in the system.Involvement of Management

The engagement of the organisations direction in the

development of the system is an of import control. With these controls,

direction must hold certification such as feasibleness surveies, budgets and

public presentation ratings. These paperss would let direction to de

cide

if the system being developed would be feasible and cost effectual. Without

such controls, expensive undertakings can be started and ne’er finished, bing

the organisation a great trade in clip and money. These managerial controls

force the development squad to make a thorough occupation since they are accountable

to management..Testing

Testing and tests are of import controls and necessitate

that systems are exhaustively tested before they become operational. The extended

proving of plans will minimise or even extinguish the mistakes in the computing machine

system. The trials will demo precisely what type of jobs occur in the system

in the processing of certain informations and would besides bespeak any jobs in

the response clip of the systems. Besides, the benchmarks that are calculated

in proving can be compared with benchmarks taken subsequently on to see if the plan

has been tampered with.Training

The preparation of the informations processing staff is a really of import

control. Proper preparation of staff would cut down the figure of mistakes that

would happen in the system due to inadequate cognition of the system. The

trained staff would be less likely to do mistakes.Concurrent Running of old and new systems.

Runing the old and new systems at the same time is besides an

of import control. This control would let the organisation to compare the

consequences of the two systems when they do different undertakings. These consequences would

let them to happen any jobs in the new system by formalizing the consequences

of the new system with the consequences of the old oneProcedural Controls.

Procedural controls are one of the most of import set

of controls as they are the 1s that are placed on the twenty-four hours to twenty-four hours running

of the system. Procedural controls are peculiarly effectual in observing

whether a system has been tampered with and so are effectual in observing

fraud. Procedural controls are divided into those controls placed on input,

end product, processing and storage.Input Controls

These are procedural controls that are placed on the input

of informations into the system. These controls are

& # 183 ; Serial enumeration of paperss

& # 183 ; Validation cheques on paperss

& # 183 ; Batching paperss and checking of batch sums

& # 183 ; mandate proceduresThese controls are carried out by the user section. The Data processing

depart besides so gets the information and set carry out their ain controls. These

are

& # 183 ; Vetting of batches to guarantee that they are right

& # 183 ; cheques on informations transition methodsThese cheques are made so that the information that is entered is as accurate and

as error free as possible.Processing Controls

Once that information has been entered into the system and is being processed, the

processing controls are used to guarantee that the information is processed decently.

Processing controls are divided into two classs. These are

1. Validation trials

2. File checksThe proof cheques are made on the information when it is being processed. These

cheques guarantee that the information is processed right. Validation cheques include

& # 183 ; Check digit confirmation

& # 183 ; Checks in the size of file and records

& # 183 ; look into on manner of the file

& # 183 ; Check on consistence of Fieldss in files

& # 183 ; Range trials on Numberss and values

& # 183 ; Hash sums

& # 183 ; Control record cheques

& # 183 ; Sequence cheques to guarantee that records are entered in the right

order

& # 183 ; Error logs which contain a record of all mistakes that have occurred

during the processing of the informations.

& # 183 ; Transaction logs which contain a record of each dealing that has

been made. This provides an audit trail for the hearer. The dealing

log would incorporate where a peculiar dealing originated and who initiated

it.

File cheques are the controls to guarantee that the unity of the files that

keep the informations for the organisation remain integral during processing. Some

file cheques are

& # 183 ; Use of heading tabular arraies to place files

& # 183 ; Use of dawdler labels to guarantee that the record is wholly read.

& # 183 ; Arithmetic cogent evidence of the proof of certain Fieldss by look intoing them

with other Fieldss in the recordOutput controls

The outputting of processed information besides has certain controls.

These end product controls are used to guarantee the completeness, truth and

seasonableness of the end product on screen, printed signifier every bit good as on storage media.

Some end product control processs are

& # 183 ; Initial showing of the end product to observe obvious mistakes

& # 183 ; Output should merely be distributed by authorised individuals to authorise

individuals.

& # 183 ; Controls sums on the end product should be checked against the control

sums of the input to guarantee the consistence of informations.

& # 183 ; All the paperss produced should be numbered and accounted for

& # 183 ; Highly sensitive stuffs should non be seen by the general information

treating staff but should be outputted to a secure location.

& # 183 ; A feedback system must be developed between the users and the informations

processing section so that any mistakes that occur would be reported and

later corrected.

Storage Controls

When informations is stored extra controls must be put into

topographic point to guarantee that the information is stored decently and that the information is to

tampered with in any manner. These controls guarantee that no unauthorised individuals

would be able to fiddle with or destruct the information whether it be deliberately

or intentionally. Some of these controls are

& # 183 ; Authorization controls to guarantee that merely authorised forces is

allowed to do amendments and omissions to the files.

& # 183 ; Controls to guarantee that amendments and omissions are to be exhaustively

documented so that the individual who made the amendments can be made accountable

for the alterations they made.

& # 183 ; Controls to guarantee that there are proper installations for the backup

of files. These include guaranting that files are backed up on a regular basis, multiple

backup files are kept and that these files are kept at a secure location

and are easy retrievable in instance of an exigency.

& # 183 ; Controls that would guarantee that the informations can be recovered in instance

of catastrophe. This includes dealing logs of complete system mopess which

will do periodic backups of all the minutess that occur within the

system.

Computerized accounting systems bring with so a set of new and alone jobs.

The internal controls that have been put into topographic point for a manual system to

assist the internal hearer can non to the full prevent or minimise the possibility

of mistakes or fraud that semen with the computerized systems. Therefore the

old controls must be modified for the new system and new controls must be

put in. Merely so can the internal hearer guarantee that the figure of mistakes

that occur within the system be minimized or even eliminated..

BibliographyBasset P.H. ( 1993 ) Computerised histories, 3rd Edition, Manchester: NCC

Blackwell. 1-85554-205-6.Grudinsku G. , Burch J. , ( 1989 ) , Information Systems Theory and Practice,

5th Edition, John Wiley and Sons, Inc. 0-471-61293-6.