Answered: In a properly functioning computer…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 32CYBK

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Case 1:

You are engaged to examine the financial statements of F4 Incorporated, which has its own computer installation. During the preliminary understanding work, you found that F4 lacked proper segregation of the programming and operating functions. As a result, you intensified the evaluation of the internal control structure surrounding the computer and concluded that the existing compensating general control procedures provided reasonable assurance that the objectives of internal control were being met.

Required:

In a properly functioning computer environment, how is the separation of the programming and operating functions achieved?
What are the compensating general control procedures that you most likely found?

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