How do you define a high-risk transaction | Computer Science Homework Help

Computer Science Homework Instructions

A fundamental component of internal control is the separation of duties for high-risk transactions. The underlying separation of duties concept is that no individual should be able to execute a high-risk transaction, conceal errors, or commit fraud in the normal course of their duties.

You can apply separation of duties at either a transactional or an organizational level. For example, payroll has access to employee financial records, but only payroll managers can approve raises.

Answer the following question(s):

1. How do you define a high-risk transaction?
2. If you were a security professional in a company, what are four roles (two sets of two related roles) you would separate and why?

Internal Control Essay Sample

A perilous enterprise can be characterized as any corporate activity or operation that bears a significant likelihood of negative outcomes such as monetary loss, tarnishing of image, or regulatory violation if not appropriately handled or monitored. These enterprises typically engage crucial resources, confidential data, or choices that can considerably influence the corporation.

To discern whether an enterprise is high-risk, several aspects need to be scrutinized:

Monetary Consequence: Enterprises that engage a sizable amount of capital or pose a threat of causing substantial financial detriment to the corporation are considered high-risk. This could involve substantial capital expenditure, financial derivatives, or high-value agreements with a possibility of default, which could all be classified as perilous enterprises.

Regulatory Adherence: Enterprises with an elevated probability of breaching legal or regulatory standards are viewed as high-risk. This encompasses enterprises dealing with delicate personal data, global commerce, environmental consequences, or activities in heavily governed sectors such as finance, healthcare, or pharmaceuticals.

Image Consequence: Enterprises with the potential to damage the corporation’s public image or reputation are marked as high-risk. This could involve enterprises related to contentious business conduct, conflicts of interest, or actions that might be perceived as immoral or illicit by interested parties.

Operational Consequence: Enterprises that could obstruct standard corporate procedures or endanger vital processes are tagged as high-risk. This could encompass enterprises that introduce significant operational susceptibilities, like alterations to fundamental systems, vendor agreements, or manufacturing methods.

Security and Deception Hazard: Enterprises with an elevated likelihood of security infringements or fraudulent conduct are marked as high-risk. This involves enterprises connected to payment handling, access to confidential data, or those that could potentially circumvent established protections and safety measures.

It is critical for corporations to pinpoint and evaluate high-risk enterprises to apply suitable controls and risk reduction measures. This might involve executing risk evaluations, enforcing robust authorization and approval procedures, observing and auditing transactional operations, and assuring job separation to inhibit single individuals from possessing full control over high-risk enterprises. By effectively overseeing high-risk enterprises, corporations can secure their financial resources, shield their image, and maintain adherence to relevant laws and regulations.