Business Process and Application ControlsLearning ObjectivesElements of Control FrameworkControl PlansSuprina Annotated Systems FlowchartSuprina Control MatrixControl Matrix ExplanationsControl Matrix for Suprina Order Entry Process Control GoalsControl Matrix for Suprina Order Entry Process Control PlansBusiness Process Control GoalsSteps in Preparing a Control Matrix - 1Control Goals of Operations ProcessesOperations Process Control Goals: Effectiveness GoalsOperations Process Control Goals: Efficiency GoalsOperations Process Control Goals: Security GoalsControl Goals of Information ProcessesInformation Process Control Goals: Input GoalsInformation Process Control Goals: Update GoalsSteps in Preparing a Control Matrix - 2Identify Present Control PlansAnnotate Present Control PlansEvaluate “Present” Control PlansIdentify and Evaluate “Missing” Control PlansIdentify and Evaluate “Missing” Control Plans . . .Systems Flowchart: Manual And Automated Data EntryControl Matrix for Manual and Automated Data EntryControl Plans for Manual and Automated Data InputControl Plans for Manual and Automated Data Input . . .Slide 29Slide 30Slide 31Slide 32Slide 33Data Entry With BatchesBatch Control PlansBatch Control Plans . . .Slide 37Other Data Entry Control PlansOther Data Entry Control Plans . . .Slide 40Slide 41Slide 42Slide 43System Flowchart : Data Entry with BatchesControl Matrix for Data Entry with BatchesComputer Agreement of Batch TotalsLevel of Assurance Provided by Internal ControlsIS 630 : Accounting Information IS 630 : Accounting Information SystemsSystemshttp://www.csun.edu/~dn58412/IS 630/IS630_F1 4.htmBusiness Process and Application ControlsLecture 5Lecture 5LEARNING OBJECTIVESControl Framework and Control Matrix.Preparing Control MatrixReview Control Plans2IS 630 : Lecture 5 2Elements of Control Elements of Control FrameworkFrameworkControl matrix: tool designed to assist in evaluating the potential effectiveness of controls in a business process by matching control goals with relevant control plans.•Establishes the criteria to be used in evaluating the controls in a particular business process.Control goals: business process objectives that an internal control system is designed to achieve.Control plans: reflect information-processing policies and procedures that assist in accomplishing control goals.IS 630 : Lecture 5 3Business process control plans are applied to a particular business process, such as billing or cash receipts.Application controls are automated business process controls contained within IT application systems (i.e., computer programs).Control PlansControl PlansIS 630 : Lecture 5 4Suprina Annotated Systems Suprina Annotated Systems Flowchart Flowchart IS 630 : Lecture 5 5Suprina Control Matrix Cf. (Fig 9-1)Four elements of the control matrix•control goals•recommend control plans•cell entries•explanation of cell entriesIS 630 : Lecture 56Control Matrix ExplanationsControl Matrix ExplanationsIS 630 : Lecture 5 7Control Matrix for Suprina Order Control Matrix for Suprina Order Entry Process Entry Process Control GoalsControl GoalsIS 630 : Lecture 5 8Control Matrix for Suprina Order Control Matrix for Suprina Order Entry Process Entry Process Control PlansControl PlansIS 630 : Lecture 5 9Business Process Control Business Process Control GoalsGoalsControl goals of the operations processes•Ensure effectiveness of operations•Ensure efficient employment of resources•Ensure security of resourcesControl goals of the information processes•For business event inputs, ensureoInput validity, input completeness, input accuracy •For master data, ensureoUpdate completeness, update accuracyIS 630 : Lecture 5 10Steps in Preparing a Control Steps in Preparing a Control Matrix - 1Matrix - 1 STEP I: SPECIFY CONTROL GOALS. 1. Identify the Operations Process Control Goalsa. Effectiveness goalsb. Efficiency goalsc. Security goals2. Identify Information Process Control Goalsa. Input Goalsb. Update GoalsIS 630 : Lecture 5 11Control Goals of Operations Control Goals of Operations ProcessesProcessesIS 630 : Lecture 5 12Operations Process Control Goals: Effectiveness Goals Describe measures of success for the operations process that are developed during an enterprise’s risk-management process.Different processes have different effectiveness goals. For the Suprina order entry process two examples are:•A: Provide timely acknowledgement of customer orders.•B: Provide assurance of customer’s creditworthiness.IS 630 : Lecture 5 13Operations Process Control Goals: Efficiency GoalsEnsure that all resources used throughout the business process are being employed in the most productive manner. For the Suprina order entry process, and for all accounting information systems, people and computers should always be included in the efficiency assessment. For other business processes, such as receiving goods and supplies, efficiency goals include the productive use of equipment.IS 630 : Lecture 5 14Operations Process Control Goals: Security GoalsProtect entity resources from loss, destruction, disclosure, copying, sale, or other misuse.Two resources of the order entry process over which security must be ensured are inventory and information (customer master data). With any business process, we are concerned with information that is added, changed, or deleted as a result of executing the process, and assets that are brought into or taken out of the organization as a result of the process.IS 630 : Lecture 5 15Control Goals of Information Control Goals of Information ProcessesProcessesIS 630 : Lecture 5 16Information Process Control Goals: Input GoalsWith respect to all business process data (e.g., customer orders) entering the system, ensure:•input validity (IV)•input completeness (IC) •input accuracy (IA)The input data is specifically named.With respect to other business processes, such as hiring employees, concern would be with other inputs, such as employee, payroll, and benefit plan data.IS 630 : Lecture 5 17Information Process Control Goals: Update GoalsFor the business process input data ensure:•Update completeness (UC)•Update accuracy (UA)Update goals apply only when there is a periodic process.Applicable master data are listed on the control matrix.Other business processes would involve different master data, such as vendor, payroll, or accounts