Question

Control activities fall into five categories with specific control activities in each category.

Explain which specific control activity you feel is the most critical in preventing fraudulent activities.

Additionally, if you could eliminate a specific control activity due to financial constraints in maintaining controls, explain which one you would eliminate.

Answer 1

There are 5 control activities in business process level such as

1.independent cheecks on performance

2.physical controls

3.segeregation of duties

4.proper authorisation of transactions

5.adequate documents and records

1.INDEPENDENT CHEECKS ON PERFORMANCE:

employees sometimes may forget or intentionally fail to follow procedures or they may be simply be carelessness.thus work of an employee should be independently verified by another member

2.PHYSICAL CONTROLS:

use of physical precautions is the most effective measure to safeguard assets and records

3.segreegation of duties:

Basically, custody of assets , authorisation of transactions and record keeping responsibility should be implemented and executed by different perssonnel

4.authorisation:

There are two types of proper authorisation of transactions such as general and specific authorisation

5.adequate documents and records:

Effective and user friendly documents should be designed

If organization has intention to eliminate fraudulent activities then authorisation is better