Tuesday, March 31, 2009

Management Controls

Although a company’s organizational structure results from a variety of influences, clear lines of authority and responsibility should be apparent. The division of functional responsibilities should separate the following: Initiation and authorization of a transaction, Recording of the transaction, Custody of the resultant asset

In addition to safeguarding assets, this division of responsibilities provides for the efficiencies derived from specialization, makes possible a cross-check that promotes accuracy without duplication or wasted effort, and enhances the effectiveness of a management control system.

From a control standpoint, automation has had a great effect on organization structures.
The review and approval of a new system - This control should be exercised to ensure management properly reviews and approves new IT systems and conversion plans.

This review team examines requests for action, arrives at decisions, resolves conflicts, and monitors the development and implementation of system projects.

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