IT audit - general control

General ControlZaldy Adrianto

Definition

• Risk assessment of the risks related to the IT organization, security, acquisition, development and maintenance, computer operations.

Objectives

• To provide a comprehensive framework of internal controls for IT activities and to provide a certain level of assurance that the overall internal control objectives can be achieved.

According to Indonesian Auditing Standards (PSA No. 60 / SA Seksi 314)

General Control Elements

• Organizational and Managerial

• System Development and Maintenance

• Operating System

• Software

• Data Entry and Program

• Backup and Recovery

According to PSA No. 60 / SA Seksi 314

Organizational and Managerial Control

• Untuk memberikan keyakinan bahwa struktur organisasi dan manajemen telah diciptakan untuk memiliki internal kontrol yang memadai, diantaranya dengan memiliki:

• Kebijakan dan prosedur yang berkaitan dengan fungsi pengendalian.

• Pemisahan semestinya fungsi yang tidak sejalan (seperti penyiapan transaksi masukan, pemograman dan operasi komputer).

System Development and Maintenance Control

• Untuk memberikan keyakinan bahwa pengembangan dan pemeliharaan sistem telah dilakukan dengan cara yang efisien dan melalui proses otorisasi yang semestinya, termasuk kedalamnya adalah:• Pengujian, perubahan, implementasi dan dokumentasi

sistem baru atau sistem yang direvisi.

• Perubahan terhadap sistem aplikasi.

• Akses terhadap dokumentasi sistem.

• Pemerolehan sistem aplikasi dan listing program dari pihak ketiga.

Operating System Control

• Telah adanya pengendalian terhadap operasi sistem untuk memberikan keyakinan bahwa:• Sistem digunakan hanya untuk tujuan yang telah

diotorisasi

• Akses ke operasi komputer dibatasi hanya bagi karyawan yang telah mendapat otorisasi

• Hanya program yang telah diotorisasi yang digunakan.

• Kekeliruan pengolahan dapat dideteksi dan dikoreksi

Software Control

• Telah adanya pengendalian terhadap perangkat lunak aplikasi telah didesain, diperoleh dan dikembangkan dengan cara yang efisien dan melalui proses otorisasi semestinya:• Otorisasi, pengesahan, pengujian, implementasi dan

dokumentasi perangkat lunak sistem baru dan modifikasi perangkat lunak sistem

• Pembatasan akses terhadap perangkat lunak dan dokumnetasi sistem hanya bagi karyawan yang telah mendapatkan otorisasi

Backup and Recovery Procedure

• Telah adanya jaminan terhadap kelangsungan proses pengolahan sistem informasi dan ketersediaan informasi. Meliputi:

• Pembuatan cadangan data program komputer di lokasi yang berbeda dengan lokasi utama pengolahan data.

• Prosedur pemulihan untuk digunakan jika terjadi pencurian, kerugian atau penghancuran data baik yang disengaja maupun yang tidak disengaja

• Penyediaan pengolahan di lokasi di luar perusahaan dalam hal terjadi bencana.

Data Entry and Program Control

• Telah adanya pengendalian terhadap proses data entry dan kontrol program untuk memberikan keyakinan bahwa:

• Struktur otorisasi telah diterapkan atas transaksi yang dimasukan ke dalam sistem.

• Akses ke data dan program dibatasi hanya bagi karywan yang telah mendapatkan otorisasi

General Control Illustration

Production

Input

Process

Output

Testing Development

Logical Access Control

Policy and Standard Operating Procedures

Physical Access Control

Program Change Control

IT Planning and Organization

• Strategic Plan (3-5 years)

• Current information assessment

• Strategic directions

• Development strategy

• Operational Plan (1-3 years)

• Progress reports

• Initiative to be undertaken

• Implementation schedule

IT Plan Review

• Auditors evaluate whether top management has formulated a high-quality information systems plan appropriate to the needs of their organization.

Example of risks caused by poor planning

• declining efficiency and effectiveness of IT functions, insufficient resources to provide the required IT functions / availability, going concern issues and lack of competitive advantages.

Organization

• Organizational controls ensure the alignment of IT facilities with the business needs and the proper management of these facilities.

Key risks

• IT does not support business needs

• Loss of efficiency, untimely problem solving, unsatisfied staff, no improvements

• Unwanted combination of functions

• Untimely management reporting

• High dependence on one/few persons

Key controls

• Planning and budgeting

• Quality and quantity of staff

• Segregation of duties or close supervision

• Efficient use of IT

• Procedures and documentation

Organizational issues

• Position of IT department in organization

• Planning and reporting

• Centralization or decentralization of tasks

• Functions and task descriptions of IT staff

• Quality and quantity of staff

• Cost center, Profit center, Investment center and Hybrid center

Change Management

• Change management procedures ensure that changes

• in the IT hardware and software do not negatively

• affect the general and application controls.

Key risks

• Loss of effectiveness of IT controls

• Loss of valuable hardware during changes

• IT no longer meets the business needs

Key controls

• Use of a development and programming standards

• Proper testing by the users

• Up-to-date hard- and software documentation

• User involvement in initiating and approving changes

Integrated Audit Approach with the Systems Development Life Cycle

Feasibility

Study

Information Analysis

System Design

Program Development

Procedures and forms

development

Acceptance Testing

Conversion

Operation &

Maintenance

Software Change Process

Development Test and

acceptance Production

Software library Read access for librarian

Read, write and

delete access rights

for developers

Use access rights

for developers

and users

Use access rights

for users

Preliminary study• Technical feasibility:

• Is the available Technology sufficient to support the proposed project? Can the technology be acquired or developed?

• Operational feasibility:• Can the input data be collected for the system? Is the

output usable?

• Economic feasibility: • Do the benefits of the system exceed the cost?

• Behavioral feasibility:• What impact will the system have on the users’ quality

of working life?

Type of Testing

• Program Testing

• System Testing

• User Testing

• Quality Assurance Testing

Physical Security

Assets

Physical

Logical

Personnel

Hardware

Facilities

Documentation

Supplies

Mainframe, minis & micros

Peripherals: online/offline

System

Data / Information

Software

Application

Storage Media

How we secure our assets?

Definition

• Physical security of computer hardware covers all controls to prevent damage to or loss of valuable assets and data on systems.

Key risks

• Loss of valuable hardware

• Tampering or damage to hardware

• Damage by external influences (fire, water)

• Disturbances caused by power fluctuations

Key controls

• Locked and dedicated computer room

• Availability of back-up power supply

• Fire and water detector

• No potentially dangerous situations (sprinklers, computer room on ground floor, etc.)

Examples of physical threats

• Fire and smoke;

• Water;

• Power supply fluctuations and failures;

• Structural Damage;

• Pollution;

• Misuse;

• Theft.

Control mitigating the threats

• Fire; smoke and fire detectors, reliable fire-extinguishing tools

• Water; water detectors, facilities must be designed and sited to mitigate losses from water damage

• Energy variations; Voltage regularities, circuit breakers and UPS

• Structural Damage; Facilities must be designed to withstand structural damage

• Pollution; Regular cleaning of facilities and equipment should occur

Control mitigating the threats (cont’d)

• Viruses and worms; Up-to-date virus scanning software, prevent use of virus-infected programs and to close security loopholes that allow worms to propagate.

• Theft; labeling and locking.

Picture example of Physical Security

Logical AccessControl

• Logical Access Security covers the controls to restrict access to information systems and data to authorized users.

Key risks

• Potential for fraud and misuse of systems and data

• Loss of information confidentiality

Key controls

• Up-to-date user access list

• Use of unique user-id and password

• Periodic review of list by management

• Regular change of passwords

• Clean desk

Authentication Process

Identification

Authentication

Authorization

User

Profiles

Access control

files

Database Software Library

Audit log

Report writer

Security reports

Backup,Recovery andContingency

• Back up controls and business continuity planning cover all procedures to ensure the availability of computer systems and data.

Key risks

• Data cannot be recovered (in time) after system failure

• Back up tapes are damaged or lost or cannot be used

• Loss of valuable business information

• Business cannot be continued after disaster (fire, etc.)

Key controls

• Regular back up’s, preferably daily

• Safe storage of tapes, preferably in fireproof vault and externally

• Periodically testing of restore of back up tapes

• Preparation of Business Continuity Plan (not limited to IT!)

Backup Strategy for critical IT Resources

• Personnel;

• Training and rotation of duties among information systems staff so they can take the place of others. Arrangements with another company for provision of staff

• Hardware;

• Arrangements with another company for provision of hardware

• Facilities;

• Arrangements with another company for provision of facilities

• Documentation;

• Inventory of documentation stored securely on site and offsite

Backup Strategy for critical IT Resources (cont’d)

• Supplies;

• Inventory of critical supplies stored securely on site and off site

• Data / Information;

• Inventory of files stored securely on site and off site

• Applications software;

• Inventory of application software stored securely on site and off site

• System Software;

• Inventory of systems software stored securely on site and off site

Disaster Recovery Plan (DRP)

• IT Disaster Recovery Plan forms one part of the overall BCP

• Limited use to the business if IT is saved but the rest of the business is lost

What Is a Disaster?

• A "Disaster" Is Any Event Which Disables or Interrupts Your Client’s Ability to Maintain a Business-As-Usual Environment for a Period of Time That Adversely Affects Ongoing Operations.

Business Continuity Plan (BCP)

• A Process which ...

• Safeguards vital corporate assets

• Ensures continued availability of Critical Services

• Minimizes the effect of a disaster

• Considers the entire business including IT

Business Continuity Planning example

SAFETY - fire - electrical

- hazardous substances

HUMAN- DELIBERATE - terrorist attack - industrial action

- blackmail

MISCELLANEOUS - loss of key staff - loss of key supplier

- negligence

NATURAL - inclement weather - legal/regulatory requirements

- earthquakes/volcanoes

Is your Business safe

?

TECHNOLOGICAL - loss of power - network outage

- software /hardware breakdown - Year 2000

Some issues regarding BCP

• On-site vs. off-site contingency planning

• Hot- or cold standby

• Personnel resources available

• Single point of failure will fail !

• Regular testing required

EXAMPLE PICTURE OF BCP STRATEGY

BACKUP TAPE BACKUP STORAGE

POWER REGULATOR

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