IT application controls are classified as a input controls b

IT application controls are classified as (a) input controls (b) processing controls, and (c) output controls.

Required: For each of the three application control categories listed, provide two specific controls and explain how each control contributes to ensuring the reliability of data.. Use the following format for the answer

Control                        Specific           Contribution to

Category                      Controls          Data Reliability

Solution

Answer;-

IT General Controls: –

It General Controls are policies and procedures that relate to many applications and support the effective functioning of application controls by helping to ensure the continued proper operation of information systems. These controls apply to mainframe, server, and end-user environments. General IT controls commonly include:

1) Controls over data centre and network operations

2) System software acquisition, change and maintenance

3) Access security

4) Application system acquisition, development, and maintenance.

5) Physical security of assets, including adequate safeguards such as secured facilities over access to assets and records,

IT Application Controls: –

these are controls that relate to specific computer software applications and the individual transactions. For example, a company would usually place restrictions on which personnel have authorization to access its general ledger so as to revise its chart of accounts, posting / approving journal entries etc.

In order to enact this policy and restrict access, the general ledger software package would require the necessary functionality. Authorization for access to computer programs and data files.

There are 3 types of application controls:-

Input Controls (transactions captured, accurately recorded, and properly authorized), Processing Controls (transaction processing has been performed as intended), and Output Controls (accuracy of processing result).

These control tests are typically performed when a new system has been implemented. Afterwards, once the controls have been confirmed to be operating effectively, for purposes of expediency, the focus tends to be on the “key” controls.

IT Application controls are extremely important to monitor. Consider the impact of in-correct pricing on reported revenues. The employees that have access to change pricing within the ERP system should be authorized by the appropriate level of management.

A list of employees having access to pricing modifications should be reviewed periodically. Furthermore, the system should be secure so that only authorized employees can have access.