In 2002, Mr. Rollerball started Mighty Mouse Incorporated, a small, 75-employee firm that pro- duces and sells wireless keyboards and other devices to vendors through its manufacturing plant in Little Rock, Arkansas. In its first two years of business MM saw a substantial growth in sales and now current capacity was unable to keep up with demand. To compete MM enlarged its manufacturing facilities. The new facility increased employs to 250 people. During this period of expansion, MM Inc. has paid little attention to internal control procedures.

Security:

Recently, systems problems and hardware failures have caused the operating system to crash.

Mr. Rollerball was extremely concerned to dis- cover that confidential company information had been printed out on the printers as a result of these crashes. Also, important digital documents were erased from storage media. Malicious programs such as viruses, worms, and Trojan horses have plagued the company and caused significant data corruption. MM has devoted significant funds and time trying to fix the damage caused to its operating system. Out of necessity to get the job done, as well as for philosophical reasons, system administrators and programmers have provided users relatively free access to the operating system. Restricting access was found to inhibit business and impede recovery from systems failures. From the outset, an open approach was regarded as an efficient and effective way to ensure that every- one obtained the information they needed to perform their jobs.

Required:

a. What internal control problems do you

b. How can MM improve internal controls?