Question

What are the factors that influence the control environment in an organization? Explain the various type of controls that can be implemented for transaction processing. Give an example for each.

Answer 1

Ans. The factors that influence the control environment in an organization are as follows: (i) Integrity and ethical values (ii) The commitment to competence (iii) Leadership philosophy and operating style (iv) The way management assigns authority and responsibility and organizes and develops its people (v) Policies and procedures.

The various type of controls that can be implemented for transaction processing are as follows: (i) adequate separation of duties between individuals performing the different control responsibilities in the process (ii) an individual usually receives a formal delegation of authority to perform a transaction process control procedure (iii) individual is expected to document his or her accountability