Page 25 - Audit Day 3 - Class Slides

Application controls

• As per ISA 315, par A109, application controls are manual or automated
procedures that typically operate at a business process level and apply to the
recording of transactions by individual applications.

• Application controls relate to specific tasks performed by computerized
information systems and can be preventative or detective in nature. Their
function is to provide reasonable assurance that the initiation, recording,
processing and reporting of financial data are properly performed.

• Application controls are categorised as “input”, “processing”, “master file
maintenance” and “output” controls. Application controls relate primarily to
the occurrence, authorisation, accuracy and completeness of transactions
within a specific application in an organisation.

• General controls, in turn, provide the standards and guidelines under which
employees function in their work and that govern the functions of developing,
maintaining and operating systems to process data.

Refer to Auditing Notes, pages 8/26 to 8/41 for a discussion on application
controls.

Contained in chapters 10 to 14 of Auditing Notes for South African students, are
sections in which the computerisation of the particular business cycle is discussed. It
is crucial for you to study this together with chapter 8 of Auditing Notes.