Question

Discuss how the nature of internal controls disaffected by switching from manual system to another scale computer based accounting system or a pc based accounting system.

Answer 1

Shifting from a manual system to a computerized system increases the efficiency of internal controls in preventing, detecting, and reporting of misstatements and errors.Under manual system, the trail of the transactions are easily accessible, i.e its processing from origin to destination could be verified, but under a computerized environment such trail is missing.Manual system delays the reporting of deviations whereas computerized system ensures immediate reporting and response for any such deviations.

Computerized system has always been a time saver along with providing an effective monitoring option. Multiple software packages can be run to identify weaknesses and take appropriate actions, it keeps a moral check on the fraudsters as there activities are being observed , thus lesser incidents of fraud and missappropriation arises unlike in case of a manual system.

Thus switching from manual system to a computer based system involves both pros and cons. It helps in detecting errors as soon as possible and one of the disadvantage from this switching is it may create unemployment to some people.