1. Why do you think controls are needed in an organization? Explain.

Organizations need controls in order to determine if their goals are being met and to take
corrective action if necessary. Control helps to reduce the wastage of human, material and
financial resources. This increases the profits of the organization. Control helps to fix
responsibility of a particular job on a particular person or a particular department. So, if there are
any mistakes then a particular person or a particular department will be held responsible for it.
Control fixes certain standards. All the work has to be done according to these standards. So
control, acts like a traffic signal. It guides all the operations of the organization in the right
direction.
2. Explain why the three IT governance controls will affect the financial reporting if they
are not properly implemented or they are ineffective.
There would be a problem in explanation of the nature of risk and a description of the
controls needed to mitigate the risk. Also in the presentation of audit objectives, which
establishes what needs to be verified regarding the function of the controls in place and in test of
controls in which are offered that describe how auditors might gather evidence to satisfy the
audit objectives.
3. Under centralized data processing, what is the effect of the three primary areas in the
financial reporting if they are not properly implemented or they are ineffective?
In Database Administration, there would be a problem in maintenance of data resources for
they are highly responsible for the security and integrity of the database. In Data Processing,
there would be a problem in performing the day-to-day processing of transactions by the use of
computer. In Systems Development and Maintenance, there would be a problem in analyzing
user needs and for designing new systems to satisfy those needs.
4. Separating Systems Development from Computer Operations is the most critical
segregation of duties. Why? Explain in the point of view of the database or financial
reporting.
The segregation of systems development and operations activities is of the greatest
importance. The relationship between these groups should be extremely formal, and their
responsibilities should not be commingled. Systems development and maintenance professionals
should create systems for users, and should have no involvement in entering data, or running
applications.
5. Under data processing, why is it necessary to have three functions?
It is necessary to have the three functions. For data conversion transcribes transaction data
from hard-copy source documents in computer input. Computer operations in which the
electronic file produced in data conversion are later processed by the central computer, which is

managed by the computer operations group. And data library which is the room adjacent to the
computer center that provides safe storage for the off-line data files.
6. Do you agree that data librarian be eliminated? Why?
No, for the librarian issues data files to computer operators in accordance with program
requests and takes custody files when processing or backup procedures are completed. Just
because the trend in recent years toward real-time processing and the increased use of directaccess files has reduced or even eliminated the role of the data librarian in many organizations.
7. What is the best control for centralized data processing? Why?
The data library for files could be backups or current data files in which provides safe storage
for the off-line data files.
8. Which of the two structures of the IT function is better? Why?
The systems development and Maintenance for they have the systems professionals.
9. Which of the two structures of the IT function is riskier? Why?
The systems development and Maintenance. In the systems professionals, there are a lot of
people who prepare some needed like the checks, cash and etc.
10. What is the best control for distributed data processing? Why?
Alternative B. this kind of alternative distributes all computer services to the end users,
where they operate as standalone units.