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    Information processing objectives provide a useful framework to help evaluate the design effectiveness of transaction level controls. For control activities within a business process or sub-process to be effective, all of the four information processing objectives are to be met. If an information processing objective at a particular stage of processing is not achieved, the data may not be reliable.

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    Information processing objectives provide a useful framework to help evaluate the design effectiveness of transaction level controls. For control activities within a business process or sub-process to be effective, all of the four information processing objectives are to be met. If an information processing objective at a particular stage of processing is not achieved, the data may not be reliable.

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    5K views4 pages

    Information Processing Objectives

    Uploaded by

    alvin81haha
    Information processing objectives provide a useful framework to help evaluate the design effectiveness of transaction level controls. For control activities within a business process or sub-process to be effective, all of the four information processing objectives are to be met. If an information processing objective at a particular stage of processing is not achieved, the data may not be reliable.

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    Information processing objectives

    PwC Guidance
    Information processing objectives provide a useful framework to help evaluate the design effectiveness of transaction level controls within a business process or
    sub-process to understand the input, processing, and recording of data. Within each business process and related transaction flows, it is of fundamental
    importance that control activities are designed and implemented to verify that authorized transactions are recorded in a complete and accurate manner, and
    control activities also protect against unauthorized amendment once recorded. These information processing objective are summarized below:

    Completeness All transactions that occur are entered and accepted for processing once and only once and in the proper
    period. For example , duplicate entries are identified and rejected; all exceptions/rejections are addressed
    and resolved.
    Accuracy Transactions are recorded at the correct amount in the appropriate account and proper period (the date
    input was correct) This includes accuracy of key data elements and standing data used in transaction
    processing
    Validity Only authorized transactions that actually occurred and are related to the organization are recorded
    Restricted Access Data is protected against unauthorized amendments and access to confidential data and physical assets
    is appropriately restricted to authorized personnel. It can be difficult to achieve the other three information
    processing objectives (Completeness, Accuracy, and Validity), when the restricted access objective is not
    met

    Control type Guidance


    Transaction level When seeking to rely on controls, it is not sufficient simply to identify and test one or more control
    activities somewhere in the process related to a particular information processing objective. For
    control activities within a business process or sub-process to be effective, all of the four information
    processing objectives are to be met. If information processing objectives are effective, then determine
    for which financial statement assertions those controls provide audit evidence.

    If an information processing objective at a particular stage of processing is not achieved, the data
    generated at that and subsequent stages of processing, as well as information derived from the data,
    may not be reliable. It may reflect events and transactions that did not occur, it may be incomplete, it
    may be mathematically inaccurate, or it may reflect assets or liabilities that do not exist. We need to
    consider the validity of the transaction; the completeness and accuracy of input wherever data is
    entered into the system; and whether the absence of control activities designed to address the
    information processing objectives relating to the maintenance of files (integrity of standing data,
    completeness and accuracy of update, and completeness and accuracy of accumulated data) at each
    stage of processing could result in a material financial statement misstatement. In addition, we need to
    consider whether assets are protected against loss from errors and fraud (particularly
    misappropriation) in the processing of transactions and the handling of related assets.

    Once we have concluded that the design of controls is appropriate to address the risk and that the
    controls are implemented, we may select the transaction level controls you intend to test for operating
    effectiveness, and determine for which financial statement assertions those controls provide audit
    evidence.

    Where missing or ineffective control activities relating to the recording and processing of data could
    result in a material financial statement misstatement, consider how to respond to the resulting control
    weakness, and the resulting impact on the nature, timing and extent of our audit procedures. Also
    consider whether you need to create a CD/W (see PwC Audit 6057) and report this weakness to
    management.

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    http://www.free-tv-video-online.info/player/novamov.php?id=c17750b4befa9
    Control sample size guidance - Manual controls

    PwC Guidance
    In determining the number of items to test for manual controls, sample sizes are provided below. Based on the frequency or on the assumed
    population of the control we generally test an appropriate number of items within the ranges.

    Frequency of control Assumed population of controls Number of items to test


    occurrences
    Annual 1 1
    Quarterly 4 2
    Monthly 12 2 to 5
    Weekly 52 5, 10, 15
    Daily 250 20, 30, 40
    Multiple times per day Over 250 25, 45, 60

    Note 3:-
    The significant increase in employee benefits was mainly due to increase in salary and stock options related of ~USD 70m, and a decrease in employee welfare such as
    pension and post employment benefits of ~USD 18.2m. The combined effect is an increase in 51.8m in which other fluctuations are immaterial.

    Note 4:-
    For other operating expenses, increase was noted in fixed assets depreciation of ~USD 10m, and AIGDC data processing related fees, in amount of ~USD 9m. Other
    fluctuations are immaterial.

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