Greener Pasture Pty Ltd (Greener Pasture) is a private nursing home.

The table below shows an extract of the audit senior's findings based on a review of controls documentation and interviews with Greener Pasture staff. The revenue system comprises the following.

1. Billing system — produces invoices to charge patients for services provided (such as accommodation, medications and medical services). This software includes a complex formula to allow for government subsidies, pensioner benefits and private medical insurance.

2. Patient database — a master file containing personal details about each patient as well as the period of stay, services provided and medical insurance details.

3. Rates database — a master file of all accommodation billing rates, rebate discounts and government assistance benefits.

The table shows the relevant patient revenue system and the controls in place.

Required

For each of the above items, with reference to the above table and background information, conclude if the control is effective or not. Justify your answer.

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Patient Finding Type of revenue item control system 1.1 Billing General IT system control 2.3 Patient Manual database 3.4 Billing system application control IT application control 3.5 All systems General IT control 4.6 Rates database IT application control Auditor findings about the control File backup occurs automatically each Sunday at 10 pm so as not to disrupt any billing activities. Exception reports are produced to show changes to patient address details and insurance company. The administration officer who creates the patient invoice has complained that she can't override the room charge rate when she thinks a mistake has been made by the system when it calculates the bill. All software changes are tested by the programmer and the test results are separately reviewed and approved by the system administrator. The data entry operator can change all data fields providing they have a data change request form signed by the Greener Pasture general manager.