Internal control in IT Environment

In an IT-based system, work normally divided among many emloyees may be performed
electronically. Consolidatuin of activities and integration of functions are to be expected, since
technology can conveniently handle many related aspects of a trandaction. For example, The
department heads report to the director who is not regularly involved for
authorising transactions for computer processing. Computer staff cannot correct
errors in input data. Computer staffs cannot initiate transactions nor have custody
of resulting assets. The division of duties in such a manner ensures accurate
records and reports and protects the company against losses from fraud or
carelessness. Despite the integration of several functions in an IT-based system,
the importance of internal control is not in the least diminished.

Computer-based fraud

Since there are segregation of duties in the IT environment computer-based fraud are reduced. The
function of programming, support and maintenance of the IT environment are separated, there will be
no possible concealment, illegal manipulation of data and transactions within the entity. Organizational
controls are reasonably effective in preventing an indivifuslemployee from perpetrating a fraud, but they
do not work as well at preventing fraud involving collusion. If the key emplotees conspire in an effort to
commit fraud, controls that rely upon separation of duties can be reduce.