Question

2. What are the threats that may face production operations and what could be the possible controls for those threats?   [1 mark]

3. What internal control procedure(s) would be most effective in preventing the following errors or fraudulent acts?

a. A programmer obtained the payroll master file and increased his salary. [0.5 mark]

b. Some time cards were lost during payroll preparation; consequently, when paychecks were distributed, several employees complained about not being paid. [0.5 mark]

c. A large portion of the payroll master file was destroyedwhen the disk pack containing the file was used as a scratch file for another application.         [0.5 mark]     

Answer 1

Answer 1. Threats for Production operations are as follows along with controls

1. Cyber Risk - Defending Assets
2. Supply Chain Management - Strong Contracts
3. Labor- Proper Training sessions.
4. Competition - New Technologies

Answer 2 -internal control procedure(s) would be most effective in preventing the following errors or fraudulent acts are as follows for the following-

a. A programmer obtained the payroll master file and increased his salary- Report to be sent to Supervisor

b. Some time cards were lost during payroll preparation; consequently, when paychecks were distributed, several employees complained about not being paid - Validate bank reconcilliation for paychecks distributed.

c. A large portion of the payroll master file was destroyed when the disk pack containing the file was used as a scratch file for another application. - Cloud Comuting device to be installed for Backup.