Internal Control and Risk Evaluation

918 Words4 Pages
Internal Control and Risk Evaluation Diana Thomas ACC/542 Accounting Information Systems Eva King December 23, 2013 Internal Control and Risk Evaluation The evaluation of Kudler’s Fine Food, is an important process that is needed to have a successful internal control and risk evaluation. Kathy Kudler has lack of internal control and risk evaluation that is needed to run her system properly. Risks are not a negative event that occurs in a company. Internal control is a company’s policy and procedure to help reduce the unforeseen possibilities that could occur. Kathy Kudler needs to have control over simple corrections such as her bank deposits, balancing cash drawers is a couple of examples. This brief will discuss Kudler’s Fine Food risks with their current Accounting Information System (AIS), which team B evaluated and incorporated controls into the flowcharts. There will be a look into the design of their internal controls to mitigate risks in the system, evaluate Kudler’s application to internal controls in the system, and discuss other controls outside the system that may be of use to Kathy Kudler. Risks and Internal Controls Analyzing the information system that Kathy Kudler has in place, there are three concerns that she needs to look at for potential risks that are continuity, business, and security. Continuity Risk Continuity risk is defined as “risks associated with an information system availability and backup and recovery (Hunton, Bryant, & Bagranoff, 2004)”. For Kathy Kudler to reduce her risks, it will be necessary for her to establish an adequate recovery and backup procedure to help ensure continued operations. Business Risk This should be Kathy’s primary risk. As it is described by Hunton, Bryant, and Bagranoff, 2004 on page 48 “the likelihood that an organization will not achieve their business goals and
Open Document