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IT-based systems and operational/financial risks

- Discuss at least three to five advantages and disadvantages of implementing an IT-based system. Identify at least four inherent operational and financial risks in using computerized reports. Propose at least two mitigation risk strategies, and justify your recommendation.

- Identify at least three risks that auditors need to consider for companies that process Web-based sales transactions, including credit card payments. For each risk identified, develop a mitigation risk strategy. Provide specific examples.

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Five advantages and disadvantages of implementing an IT-based system.

Advantages:

1. With computers, they can reach you through email, Facebook and other social media sites and your website. They can comment on your blog and complete your customer surveys (Davies, 2013).
2. Less consumption of paper. Data can be saved on storage devices or sent to the cloud.
3. Data can be accessed 24/7.
4. Negligible inventory of hard copies of files and documents.
5. Employers need not rent big spaces. Employees can do their office work while at home. Files can be remotely sent to the office.

Disadvantages:

1. IT-based system means costs. Venturing in IT-based system involves investments.
2. There is the danger of data theft since digital files and documents are stored on online media. Hacking of company information is a real threat.
3. Not all employees are into information and communications technology. Some staff may not be not into IT thing and prevents the company from implementing the new system.
4. With a computerized inventory management system, the company is at the mercy of its technology. Outside factors like a power failure or the loss of Internet or network connectivity can render the system temporarily useless (Conrad, 2013).
5. There is a probability of virus infection of data and networks.

Inherent operational and financial risks in using computerized reports:

1. Submission of computerized reports may be intercepted by those who are not authorized to access them. The danger is magnified multiple times when computerized reports fall into the hands of competitors.
2. Files containing computerized reports may be accidentally/intentionally deleted resulting to paralysis of company operations.
3. Computerized reports can be affected by data error and data failure.
4. Since computerized reports are dependent on existing application software, expiry of ...

Solution Summary

The discussion identified the advantages and disadvantages of implementing an IT-based system. Included also in the discussion are the inherent operational and financial risks in using computerized reports including mitigating risks.

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