12.10. COUNTING INFORMATION SYSTEMS APPLICATIONS the Family Support Center is a

Question

12.10.

COUNTING INFORMATION SYSTEMS APPLICATIONS the Family Support Center is a small charitable organization. It has only four full-time employees: two staff, an accountant, and an office manager. The majority of its funding comes from two campaign drives, one in the spring and one in the fall. Donors make pledges over the telephone. Some donors pay their pledge by credit card during the telephone campaign, but many prefer to pay in monthly installments by check. In such cases, the donor pledges are recorded during the telephone campaign, and the donors are then mailed pledge cards. Donors mail their contributions directly to the charity. Most donors send a check, but occasionally some send cash. Most donors return their pledge card with their check or cash donation, but occasionally the Family Support Center receives anonymous cash donations. The procedures used to process donations are as follows: Sarah, a staff member who has worked for the Family Support Center for 12 years, opens all mail. She sorts the donations from the other mail and prepares a list of all donations, indicating the name of the donor (or anonymous), amount of the donation, and the pledge number (if the donor returned the pledge card). Sarah then sends the list, cash, and checks to the accountant. The accountant enters the information from the list into the computer to update the Family Support Center's files. The accountant then prepares a deposit slip(in duplicate) and deposits all cash and checks into the charity's bank account at the end of each day. No funds are left on the premises overnight. The validated deposit slip is the n filed by date. The accountant also mails an acknowledgement letter thanking each donor. Monthly, the accountant retrieves all deposit slips and uses them to reconcile the Family Support Center's bank statement. At this time, the accountant also reviews the pledges, files and sends a follow-up letter to those people who have not yet fulfilled their pledges. Each employee has a computer workstation that is connected to the internal network. Employees are permitted to surf the Web during lunch hours. Each employee has full access to the charity's accounting system, so that anyone can fill in for someone else who is out sick or on vacation. Each Friday, the accountant makes a backup copy of all computer files. The backup copy is stored in the office manager's office. REQUIRED identify two major control weaknesses in the Family Support Center's cash receipts procedures. For each weakness you identify, suggest a method to correct that weakness. Your solution must be specific-identify which specific employees should do what. Assume that no new employees can be hired. Describe the It control procedures that should exist in order to protect the Family Support Center from loss, alteration, or unauthorized disclosure of data. Match the threats in the first column to the appropriate control procedures in the second column(more than one control may address the same threat). Threat Uncollectible sales Mistakes in shipping orders to consumers Crediting customer payments to the wrong account Theft of customer payments Theft of inventory by employees Applicable Control Procedures Restricted access to master data Encryption of customer information while in storage Backup and disaster recovery procedures Digital signatures Physical access controls on inventory

Explanation / Answer

Answer : The Major weakness are as follows :

1) The mail review procedure through which the cash and Cheques are collected should be more detailed. Currently Sarah is the sole incharge for opening up the mails and preparing the list of donation received.

thus there are possibilities that some fraud might take place at her level. Thus somone from the accounts department should check her work.

2) In the current procedure we are vaidating the bank statement with the Deposit Slips and there is no check in the amount received by the accountant with the amount dposited in the bank. The Office manager should do a monthly check between the donation received as per Sarah's list and the amount deposited in the bank as per statment.

B) to protect the unauthorized access , loss or alteration of data there should be restriction in the user access of different users

For Eg: only the account department people should have rights to alter the data. while others should have only reader access and there should be an Audit trail for person downloading the data from system or altering it.

the Back up should be password protected or stored in hardware drives that are in lockers.

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