auditing in CBE

Question 1

2 types of internal controls in a computer environment are

Answer 1

1) Application controls may be manual/automated.
They ensure transactions are processed correctly by individual applications at the business process level.

2) general controls relate to many applications and support the effective functioning of application controls.

Question 2

types of application controls

Answer 2

(i) Input controls: Ensure accurate data entry with batch control totals and validation checks like reasonableness, existence, character, range, and check digit checks.

(ii) Processing controls: Maintain consistency across processing runs with run-to-run controls, reconciling beginning balances with transaction inputs and outputs.

(iii) Output controls: Verify accuracy through batch processing and review of exception reports for rejected transactions or anomalies like high wages.

(iv) Master files and standing data controls: Ensure integrity with one-for-one checks for changes to master files, such as verifying customer price changes against authorized lists, and regular audits of master file printouts like wages.