Internal Control and Risk Evaluation
The purpose of this brief is to identify and analyze possible risks to Kudler Fine Foods’ upgraded computer systems and design internal controls to mitigate systems risks. We have attached revised process flow charts that illustrate the application of internal controls for the upgraded systems (Apollo Group, Inc., 2009). Analysis of Risks to Computer Systems
* The team has recommended that Kudler Fine Foods automate more of its inventory, payroll, accounts payable, and accounts receivable processes and standardize these processes across all Kudler locations. Therefore, increased computer controls will be needed to ensure the security of data. Computer data could be compromised if proper computer controls are not in place. Risks include theft of confidential and sensitive information stored on computer servers such as company bank account information or personnel records (dates of birth, social security numbers, etc.). Theft of physical computer hardware is also a risk. * Designation of Internal Controls
Barcode scanners will be used to track receipt of purchased inventory items. The barcode scanners will be preprogrammed with the full list of inventory items, codes, and pricing. In addition, the barcode scanners will be equipped with the ability to transmit data electronically to the purchasing, inventory, general ledger, and payment modules. Information controls should be minimal since the barcode scanner simply records and transmit basic data. Management will be responsible for scanning received inventory and transmitted data via barcode scanner. Employees will be able to clock in and out using the cash register terminals via magnetic stripe ID cards. Possible risks include unauthorized access to employee records at cash register terminals. The internal control needed would be a two-step login process where the employee swipes his/her magnetic ID card and then types in a unique Personal Identification...
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