uired Suggest five specific controls which the auditor should recommend as a result of his tour.
Internal Controls
Homer Simpson’s first assignment as an internal auditor for Springfield Services Company involved an audit of the data processing centre controls. The Data Processing Manager, Mr. Burns, gave him a tour of the facilities. Mr. Burns explained that the facilities were located between the accounting and the personnel departments because of the high volume of transactions generated by these two areas.
"Our doors are always open as a matter of policy. This way, users feel involved and committed to the system," he told Homer as they entered the glass doors of the facility. Homer was introduced to a programmer and a systems analyst who were reviewing and approving results of a program they had written together. The computer tape files were stored in the centre of the room on open shelves for ease of access to both operators and programmers. The lower part of the shelving was a locked storage cabinet. Mr. Burns showed Homer the back-up copies of tapes stored there along with transaction tapes, and explained that only the operator and junior programmer had keys. The junior programmer required a key because he often worked nights to gain some quiet time. The operator was also often there at night trying to accumulate as much overtime as possible to finance his hobby of collecting and restoring antique cars.
Incoming transaction documents were stored in in-baskets on a table by the tape storage shelving. Also there were computer printouts, payroll cheques and keyed source documents stored on out-baskets awaiting pickup.
During Homer's visit the operator halted the processing of accounts payable because he had noted that the external label on the transaction tape was for the previous period. Mr. Burns explained that it was lucky he caught the error because last month during payroll processing an error correction entry by the console operator resulted in unintentional recording of data on the payroll master destroying several records on that file.
As they were leaving, Mr. Burns also mentioned the great deal they got by leasing the system. He explained that because of the lease and its maintenance provision, no insurance was required and backup facilities for emergency procedures were unnecessary.
Suggest five specific controls which the auditor should recommend as a result of his tour.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
