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Audit and financial control

Information technology and internal

control

4.1 The use of IT in internal controls

For many businesses, the use of IT can be a valuable tool when setting internal
controls in two main areas.

Financial controls – this involves IT being used as a check for the financial data in
the organisation

This could include ensuring the security of financial data, such as through the use of
passwords and authorisation, but it could also allow organisations to make sure that
financial procedures are followed.

e.g. many businesses have IT based sales ledger facilities. The system could be set
to prevent staff making sales to customers who have already reached their credit
limit.

Operational controls – this is where IT is used as a control on the day-to-day
activities of the business.

e.g. a manufacturing business many have automated systems that check each unit
and reject any that are defective.

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