1. APPLICATION RISK AND CONTROLS

2. Application Risks Weak security Unauthorized access to data
Unauthorized remote access
Inaccurate information
Erroneous or falsified data input
Misuse by authorized end users
Incomplete processing
Duplicate transactions
Untimely processing
Communications system failure
Inadequate training
Inadequate support

3. End User Computing (EUC) Application Risks
Inefficient use of resources
Incompatible systems
Redundant systems
Ineffective implementations
Absence of separation of duties
Unauthorized access to data or programs
Copyright violations
The destruction of information by computer viruses

4. Electronic Data Interchange (EDI) Application Risks
Loss of Business Continuity / Going Concern Problem
Interdependence
Loss of confidentiality or sensitive information
Increased exposure to fraud
Manipulation of payment
Loss of transactions

5. Electronic Data Interchange (EDI) Application Risks
Errors in information and communication systems
Loss of audit trail
Concentration of control
Application failure
Potential legal liability
Overcharging by third party service providers
Manipulation of organization
Not achieving anticipated cost savings

6. Implications of risks in an EDI systems
Potential loss of transaction audit trail
Increased exposure to ransom, blackmail, or fraud
Disruption of cash flows
Loss of profitability
Damage to reputation
Financial collapse

7. Application Controls Input Controls Interfaces Authenticity Accuracy
Processing controls
Completeness

8. Application Controls Error correction Output controls Reconciliation
Distribution
Retention
Functional Testing and Acceptance
Management Approval

9. Documentation Requirements
Standards and descriptions of procedures
Instructions to personnel
Flowcharts
Data flow diagrams
Display or report layout
Other materials that describe the systems

10. Application Software Life Cycle
System Development Methodology
An information systems strategy that guides developers in building systems that are consistent with the organization’s technical and operational goals
Standards that guide in selection of hardware, software, and in developing new systems
Policies and procedures that support the organization’s goals and objectives
Project management which ensures that project are completed on time and within budget
User Interface
Means by which the user interacts with the system.

11. Application Maintenance
Corrective maintenance
Emergency program fixes and routine debugging
Adaptive maintenance
Accommodation of change
Perfective maintenance
User enhancements
Improve documentation
Recording for efficiency