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Thursday, November 14, 2013



TYPES OF CONTROLS Presentation Transcript:

2.Asset Accountability Controls
Subsidiary ledgers provide a cross-check on the accuracy of a control account
Reconciliations compare values that have been computed independently
Acknowledgment procedures transfer accountability of goods to a certain person
Logs and Registers help account for the status and use of assets
Reviews & Reassessments are used to re-evaluate measured asset values

3.Management Practice Controls
Since management is responsible and thus “over” the internal control structure, they pose risks to a firm
In a computerized AIS, management should instigate a policy for:
Controls over Changes to Systems
New System Development Procedures

4.Examples of Management Practice Controls
Human resource Policies and Practices
Commitment to Competence
Planning Practices
Audit Practices
Management & Operational Controls

5.Application Controls
Application controls pertain directly to the transaction processing systems
The objectives of application controls are to ensure that all transactions are legitimately  authorized and accurately recorded, classified, processed, and reported
Application controls are subdivided into input, processing and output controls

6.Authorization Controls - I
Authorizations enforce management’s policies with respect to transactions flowing into the general ledger system
They have the objectives of assuring that:
Transactions are valid and proper
Outputs are not incorrect due to invalid inputs
Assets are better protected
Authorizations may be classified as general or specific 

7.Input Controls
Input Controls attempt to ensure the validity, accuracy, and completeness of the data entered into an AIS.
Input controls may be subdivided into:
Data Observation and Recording
Data Transcription (Batching and Converting)
Edit tests of Transaction Data
Transmission of Transaction Data

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