An Assessment Of Internal Control System In A Computerized Accounting Environment

An Assessment Of Internal Control System In A Computerized Accounting Environment

Chapter One

Preface

Background of the study

According to Fadzil et al( 2005), the technology revolution in account and auditing began in the summer of 1954 with the first functional business computer. General electric is attributed with the first functional electric account system, a UNIVAC computer, in the summer of 1954.

Hunton and Wright( 2009) concur that Information Technology Auditing( IT Auditing) began as Electronic Data Process( EDP) auditing and developed largely as a result of the rise in technology in counting systems, the need for IT control, and the impact of computers on the capability to perform documentation services. It’s believed the first use of a motorized account system was at General Electric in 1954. At this time only mainframe computers were used and a many people had the chops and capacities to program computers. This began to change in themid-1960s with the preface of new, lower and less precious machines. This increased the use of computers in businesses and with it came the need for adjudicators to come familiar with EDP generalities in business.

Jones and Young( 2006) point out that EDP adjudicators formed the Electronic Data Processing Adjudicators Association( EDPAA). The thing of the association was to produce guidelines, procedures and norms for EDP checkups. In 2007, the first edition of control objects was published. This publication is now known as Control objects for information and affiliated Technology( CobiT) is the set of generally accepted IT control objects for IT Adjudicators. In 2004, EDPAA changed its name to Information Systems Audit and Control Association( ISACA). The period from the late 1960s through moment has seen rapid-fire changes in technology from the microcomputer and networking to the internet and with these changes came some major events that change IT auditing ever.

According to Griffiths( 2006), the account assiduity is responsible for recording and reporting fiscal information for business. Accounting functions generally fall in to one of two counting orders operation and fiscal. Where operation account is responsible for recording and reporting internal fiscal information for directors for business opinions, fiscal account reviews company’s information released to external business stakeholders.

Jackson( 2005) suggested that taking comprehensive measures for guarding fiscal information frequently helps companies pass external checkups with positive inspection opinions. External checkups may be used by banks, lenders or investors deciding to invest capital into the company.

Companies may also need to present clean inspection report to government agencies regarding their fiscal and accounting practices. The capability to present a strong internal control process and inspection trails relating to account software frequently helps companies ’ limits fiscal or legal liability.

Lorenzo( 2001) mention that, the ideal of enterprise threat operation inspection and control is to give an integrated, comprehensive assessment of all the pitfalls that an institution is exposed to and an ideal and harmonious approach to managing them. The size and complexity of the larger institutions make motorized auditing more important while on the other hand; their veritably size and complexity also make it harder to achieve an enterprise wide view of threat auditing.

Measuring functional threat is especially delicate due to a variety of reasons. Kunkel( 2004) also noted that ERP systems perpetration at numerous pots has led to increased inspection related threat due to automated interdependencies among business processes, and integrated relational database. As technological developments continue, adjudicators may need to expand their technological knowledge and chops in order to perform effectively and efficiently in inspection functions.

The Statement Of The Problem

The inspection problems with association moment can be dealt with from two broad perspective i.e. technological problem and literal problems.

This sense of the specialized problem has to do with lack of technological know how. Since inspection in a computer terrain is a ultramodern or contemporary way of inspection, it entails a formal or an informal training on how to do this, which so numerous people( adjudicators) and their association lacks, and it also involves redundant spending on the purchases, conservation,etc. of computer and its accessories, which association try to avoid in their flings to maximize profit.

The literal aspect of it could be appertained to as familiarity with the traditional way, which affect from nonstop practice, hence making it delicate for one to borrow to current or ultramodern way of doing it, so fluently.

likewise, the size of the association, like my case study whose area services then in Benue State is small in size and in member of staff, also determine the use of ultramodern inspection( Computer) or the traditional( homemade) way of doing it, i.e.However, computer inspection will be embarked on to grease the whole inspection process, while if it’s small in size, if the size is big.

Objects Of The Study

This exploration work named an assessment of internal control system in a motorized account terrain with particular reference to First bank NigeriaPlc.

The specific objects of this exploration work includes the following;

1. To examine the effect of motorized account system on the effective performance of internal control unit in first bankPlc.

2. To estimate the extent of operation of motorized account system in first bank NigeriaPlc.

3. To examine the part of internal control system in a motorized account terrain.

4. To identify the factors militating against effective internal control system in a motorized account system. And also proffer possible results to the problems linked.

Exploration Questions

Grounded on the objects above the experimenter asked the following questions;

1. Does motorized account system impact the effective performance of internal control unit in first bank Plc?

2. To what extent does first bank Nigerian plc apply motorized account system in internal control unit?

3. What are the places of internal control system in a motorized account terrain?

4. What are the factors militating against effective internal control system in a motorized account system?