- 8 Marks
Question
State and explain FOUR categories of control activities.
Answer
- Performance Reviews:
These controls involve reviews and analyses of actual performance against budgets, forecasts, and prior period performance. Such reviews are typically conducted by management and are essential for identifying variances that may indicate operational issues or fraud. Performance reviews ensure that set targets are being met and allow for corrective actions when discrepancies are found. - Segregation of Duties:
This control involves dividing responsibilities among different individuals to reduce the risk of errors or fraud. Key functions such as authorizing transactions, recording transactions, and maintaining custody of assets should be performed by different people. Segregation of duties ensures that no single individual can both initiate and conceal a transaction. - Physical Controls:
These controls pertain to securing the physical assets of an organization, such as inventory, cash, and records. Examples include locking inventory in secured locations, restricting access to data systems, and requiring authorizations for access to critical assets. Physical controls help prevent unauthorized use, theft, or damage. - Information Processing Controls:
These are controls designed to ensure the accuracy, completeness, and authorization of transactions and data. They are categorized into two types:- General IT Controls: These control the IT environment and support the functioning of application controls.
- Application Controls: These control the input, processing, and output of data, ensuring that transactions are accurate and complete.
- Topic: Internal Control Systems
- Series: NOV 2016
- Uploader: Kwame Aikins