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1 page/≈275 words
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Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Coursework
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English (U.S.)
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Topic:

Control Environment, Segregation of Duties, and Advantages of Using IT

Coursework Instructions:

A control environment, also called "Internal control environment", is a term of financial audit, internal audit and Enterprise Risk Management. They express it in management style, corporate culture, values, philosophy and operating style, the organizational structure, and human resources policies and procedures. Assessing internal controls is part of today's auditing requirements. It helps identify risk factors — but the requirements can sometimes be unclear. Having a strong internal control environment can provide management and stakeholders reasonable assurance that the organization is operating in accordance with company policies, industry standards, and regulatory requirements. Some of the most common limitations of internal controls include providing reasonable assurance, collusion, human error, control override, poor judgment, cost and benefit consideration, improper communication to or training of employees, and unforeseen circumstances.
The segregation of duties is the assignment of various steps in a process to different people. The intent behind doing so is to eliminate instances in which someone could engage in theft or other fraudulent activities by having an excessive amount of control over a process. Segregation of duties serves two key purposes: It ensures that there is oversight and review to catch errors. It helps to prevent fraud or theft because it requires two people to collude in order to hide a transaction. Segregation of duties in IT security is one of the most basic ways to protect your environment. ISO/IEC 27001 requires separation of duties and responsibilities that potentially conflict. In doing this, your organization lowers the risk of both malicious and accidental modification or misuse.
The primary advantage of using IT is the increased speed and accuracy. Clearly, if an auditor can use a computer program to run through financial statements and compile data and figures, then the job can be done very quickly compared to only slight reliance on computers. Following are some other benefits of using audit software
1) Reduce the duplication of effort.
2) Improve the accuracy of data captured during an audit.
3) Gather more information during every audit.
4) Eliminate ambiguity in audit reports.
5) Demonstrate compliance throughout the audit trail.

Coursework Sample Content Preview:

Response Post: Control Environment, Segregation of Duties, and Advantages of Using IT
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Response Post: Control Environment, Segregation of Duties, and Advantages of Using IT
One of the critical roles of an auditor is to assess internal controls. The internal control environment is commonly applied in areas such as enterprise risk management, internal audit, and financial audit (Agyapong, 2017). It is critical to have a robust internal control environment as this gives the stakeholders and management the assurance that an organization is running as per the industry standards, company policies, and other regulatory requirements. However, internal controls have some setbacks, such as poor judgment, failure to provide reasonable assurance, human-associated errors, collusion, poor communication, cost, control override, and other unforeseen circumstances.
For employees to remain productive within an organization, it is important to segregate tasks. Segregation of duties refers to the assignment of different small tasks within a large task to different workers. Besides increasing employee productivity, another logic behind the segregation of duties is to avoid cases of workers engaging in fraudulent activities or theft. Theft within an organization can be prevented through this practice as it requires two different worke...
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