Application Controls are programmed

procedures designed to deal with potential exposures that threatens specific applications. Categories: Input Controls Processing Controls Output Controls

Input Controls
The

data collection component of the information system is responsible for bringing data into the system for processing. Data input procedures: Source document-triggered (batch) Source document input is requires human involvement and is prone to clerical errors. Direct input (real time) employs real-time editing techniques to identify and correct errors immediately.

Classes of Input Controls

1. Source document controls - Careful control

must be exercised over physical source documents in systems that use them to initiate transactions. Control procedures over source document: Use Pre-numbered Source Documents.Source documents should come prenumbered from the printer with a unique sequential number on each document.

 Use Source Documents in Sequence - Source

documents should be distributed to the users and used in sequence. Periodically Audit Source Documents Reconciling document sequence numbers should identify missing source documents. 2. Data coding controls - Coding controls are checks on the integrity of data codes used in processing. E.g. customers account number, an inventory item no., and a chart of accounts.

3 types of errors can corrupt data codes and cause processing errors
a. Transcription errors fall into three classes: Addition errors occur when an extra digit or character is added to the code. Truncation errors occur when a digit or character is removed from the end of a code. Substitution errors are the replacement of one digit in a code with another. ex: inventory item no. 83276 recorded as 832766; 8327;83266

b. Single transposition errors occur when two adjacent digits are reversed c. Multiple transposition errors occur when nonadjacent digits are transposed. ex: inventory item no. 83276 recorded as 38276; 87236

Check Digits one method of detecting data coding errors. A control digit/s added to the code when it is originally assigned that allows integrity of the code to be established during subsequent processing.

3. Batch controls
Objective: to reconcile output produced by

the system with the input originally entered into the system. This provides assurance that: All records in batch are processed. No records are processed more than once. An audit trail of transactions is created from input through processing to the output stage of the system.

 Two documents are used to accomplish this task: batch transmittal sheet and a batch control log. Batch transmittal sheet captures
unique batch no. batch date transaction code no. of records in the batch (record count) total dollar value of financial field (batch control

total) total of a unique nonfinancial field (hash total) Hash total refers to a simple control technique that uses nonfinancial data to keep track of the records in a batch.

4. Validation controls intended to detect errors in transaction data before the data are processed. 3 levels of input validation controls: a. Field Interrogation involves programmed procedures that examine the characteristics of the data in the field. Common types: Missing data checks determine whether the correct form of data is in a field. Zero-value checks are used to verify that certain fields are filled with zeros. Limit checks determine if the value in the field exceeds an authorized limit.

 Range checks assign upper and lower

limits to acceptable data values. Validity checks compare actual values in field against known acceptable values. If the value in the field does not match one of the acceptable values, the record is determined to be in error. Check digit control identify key stroke errors in key fields by testing the internal validity of the code.

b. Record Interrogation procedures validate the entire record by examining the interrelationship of its field values. Some typical tests: Reasonableness checks determine if a value in one field, which has already passed a limit check and a range check, is reasonable when considered along with other data fields in the record. Sign checks are tests to see if the sign of a field is correct for the type of record being processed. Sequence checks are used to determine if a record is out of order.

c. File Interrogation. Purpose: to ensure that the correct file is being processed by the system. Internal label checks verify that the file processed is the one the program is actually calling for. Version checks are used to verify that the version of the file being processed is correct. In a grand-parent-child approach, many versions of master files and transactions exist. Expiration date check prevents a file from being deleted before it expires.

5. Input error correction. When errors are detected in a batch, they must be corrected and the records resubmitted for reprocessing. Three common error handling techniques: Correct immediately. Error detection and correction can also take place during data entry. Create an Error File. When delayed validation is being used, such as in batch systems with sequential files, individual errors should be flagged to prevent them from being processed.

 Reject the batch. Some forms of errors are

associated with the entire batch and are not clearly attributable to individual records. 6. Generalized Data Input Systems (GDIS). This technique includes centralized procedures to manage the data input for all of the organizations transaction processing system.

 Advantages:
It improves control by having one common

system perform all data validation. It measures that each AIS application applies a consistent standard for data validation. Improves systems development efficiency. Five major components:
Generalized validation module (GVM) performs standard validation routines that are common to many different applications.
Validated data file. This a temporary holding

file through which validated transactions flow to their respective applications.

 Error file. Error records detected during

validation are store in the file, corrected, and then resubmitted to GVM. Error reports. Standardized error reports are distributed to users to facilitate error correction. Transaction log a permanent record of all validated transactions.