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Computer-Based Information Systems Control

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General Controls

A company designs general controls to ensure that its overall computer system is stable and well managed.

The following are categories of general controls:

1 Developing a security plan

2 Segregation of duties within the systems function

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General Controls

3 Project development controls

4 Physical access controls

5 Logical access controls

6 Data storage controls

7 Data transmission controls

8 Documentation standards

9 Minimizing system downtime

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General Controls

10 Disaster recovery plans

11 Protection of personal computers and client/server networks

12 Internet controls

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Developing a Security Plan

Developing and continuously updating a comprehensive security plan is one of the most important controls a company can identify.

What questions need to be asked?

» Who needs access to what information?

» When do they need it?

» On which systems does the information reside?

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Segregation of Duties Withinthe Systems Function

In a highly integrated AIS, procedures that used to be performed by separate individuals are combined.

Any person who has unrestricted access to the computer, its programs, and live data could have the opportunity to both perpetrate and conceal fraud.

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Segregation of Duties Withinthe Systems Function

To combat this threat, organizations must implement compensating control procedures.

Authority and responsibility must be clearly divided among the following functions:

1 Systems analysis

2 Programming

3 Computer operations

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Segregation of Duties Withinthe Systems Function

4 Users

5 AIS library

6 Data control It is important that different people perform

these functions. Allowing a person to perform two or more of

them exposes the company to the possibility of fraud.

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Project Development Controls

To minimize failures, the basic principles of responsibility accounting should be applied to the AIS function.

What key elements are included in project development control?

1 Long-range master plan

2 Project development plan

3 Data processing schedule

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Project Development Controls

4 Assignment of responsibility 5 Periodic performance evaluation6 Post-implementation review7 System performance measurements

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Physical Access Controls

How can physical access security be achieved?

– placing computer equipment in locked rooms and restricting access to authorized personnel

– having only one or two entrances to the computer room

– requiring proper employee ID

– requiring that visitors sign a log

– installing locks on PCs

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Logical Access Controls

Users should be allowed access only to the data they are authorized to use and then only to perform specific authorized functions.

What are some logical access controls?

– passwords

– physical possession identification

– biometric identification

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Data Storage Controls

Information is generally what gives a company a competitive edge and makes it viable.

A company should identify the types of data maintained and the level of protection required for each.

A company must also document the steps taken to protect data.

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Data Storage Controls

A properly supervised file library is one essential means of preventing loss of data.

A file storage area should also be protected against fire, dust, excess heat, or humidity.

Following are types of file labels that can be used to protect data files from misuse:

– external labels– internal labels (volume, header, trailer)

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Data Transmission Controls

To reduce the risk of data transmission failures, companies should monitor the network.

How can data transmission errors be minimized?– using data encryption (cryptography)– implementing routing verification procedures– adding parity– using message acknowledgment techniques

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Data Transmission Controls

Data Transmission Controls take on added importance in organizations that utilize electronic data interchange (EDI) or electronic funds transfer (EFT).

In these types of environments, sound internal control is achieved using the following control procedures:

1 Physical access to network facilities should be strictly controlled.

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Data Transmission Controls

2 Electronic identification should be required for all authorized network terminals.

3 Strict logical access control procedures are essential, with passwords and dial-in phone numbers changed on a regular basis.

4 Encryption should be used to secure stored data as well as data being transmitted.

5 Details of all transactions should be recorded in a log that is periodically reviewed.

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Documentation Standards

Another important general control is documentation procedures and standards to ensure clear and concise documentation.

Documentation may be classified into three basic categories:

1 Administrative documentation2 Systems documentation3 Operating documentation

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Minimizing System Downtime

Significant financial losses can be incurred if hardware or software malfunctions cause an AIS to fail.

What are some methods used to minimize system downtime?

– preventive maintenance– uninterruptible power system– fault tolerance

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Disaster Recovery Plan

Every organization should have a disaster recovery plan so that data processing capacity can be restored as smoothly and quickly as possible in the event of a major disaster.

What are the objectives of a recovery plan?1 Minimize the extent of the disruption, damage, and

loss.2 Temporarily establish an alternative means of

processing information.

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Disaster Recovery Plan

3 Resume normal operations as soon as possible.4 Train and familiarize personnel with emergency

operations. A sound disaster plan should contain the

following elements:1 Priorities for the recovery process2 Backup data and program files

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Disaster Recovery Plan

3 Specific assignments4 Complete documentation5 Backup computer and telecommunications

facilities

» reciprocal agreements

» hot and cold sites

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Disaster Recovery Plan

There are other aspects of disaster recovery planning that deserve mention:

The recovery plan is incomplete until it has been satisfactorily tested by simulating a disaster.

The recovery plan must be continuously reviewed and revised to ensure that it reflects current situation.

The plan should include insurance coverage.

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Protection of PCs and Client/Server Networks

Why are PCs more vulnerable to security risks than are mainframes?

» It is difficult to restrict physical access.

» PC users are usually less aware of the importance of security and control.

» Many people are familiar with the operation of PCs.

» Segregation of duties is very difficult.

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Application Controls

The primary objective of application controls is to ensure the accuracy of a specific application’s inputs, files, programs, and outputs.

This section will discuss five categories of application controls:

1 Source data controls2 Input validation routines

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Application Controls

3 On-line data entry controls4 Data processing and file maintenance controls5 Output controls

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Source Data Controls

There are a number of source data controls that regulate the accuracy, validity, and completeness of input:

– key verification– check digit verification– prenumbered forms sequence test– turnaround documents– authorization

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Input Validation Routines

Input validation routines are programs that check the validity and accuracy of input data as it is entered into the system.

These programs are called edit programs. The accuracy checks they perform are called

edit checks. What are some edit checks used in input

validation routines?

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Input Validation Routines

– sequence check– field check– sign check– validity check– limit check– range check– reasonableness test

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On-Line Data Entry Controls

The goal of on-line data entry controls is to ensure the accuracy and integrity of transaction data entered from on-line terminals and PCs.

What are some on-line data entry controls?– data checks– user ID numbers and passwords– compatibility tests– prompting

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On-Line Data Entry Controls

– preformatting– completeness check– automatic transaction data entry– transaction log– clear error messages

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Data Processing and File Maintenance Controls

What are some of the more common controls that help preserve the accuracy and completeness of data processing?

– data currency checks– default values– data matching– exception reporting