Internal Auditing: Microcomputers

As organizations move toward microcomputers to handle critical accounting functions, they frequently compromise many of the internal controls. Internal controls problems tend to be more in a microcomputer environment than in a minicomputer environment. Microcomputers were originally developed for personal use and they were impractical for most organizational computing needs. These computers were designed for a single user and for simplicity of operation.

Security and internal controls were ignored in the development of most microcomputer hardware and software. The increase in computing power and data storage, their low cost, and the user friendly software make microcomputers a replacement for the mainframe computer in some applications.

Common control problems associated with microcomputer environments and many microcomputer environments include lack of separation of duties, unauthorized access to hardware and software, and uncontrolled development of computer application programs.[1]. Programs written for microcomputers are designed to be operated by a single individual. When these programs allow the operator access to assets, and to the corresponding accounting records, serious internal control compromises result.

With microcomputers is no longer feasible to maintain some type of physical security of the hardware because they are being networked together and linked to other computers. A few years ago, the average employee in an organization was not computer literate. Even if he could gain physical access to a microcomputer, he would not have had sufficient knowledge of the computer to use it to their own advantage. With access to hardware becoming more difficult to control, more attention needs to be given to controlling access to data and software.

A growing number of individuals are capable of writing their own application programs using user-friendly software. When the application programs developed allow access to assets, and the ability to alter the accounting records, internal controls are seriously compromised.

Internal controls commonly found on mainframe computers often do not exist in smaller computer environment. An awareness of the internal control problems and adherence to proper internal control procedures will enable the accountant to avoid coslty errors in the future as organizations and clients place greater reliance on microcomputers.

References

[1] AICPA: Internal control implications in a computer environment. (self study guide). [back to text]