You are senior on the audit of Rexxon (Pty) Ltd, a medium sized wholesaler of stationery and supplies. All of the companys financial systems are computerized and you have been asked to assist in the evaluation of the companys general controls. One of the other trainees on the audit has prepared some notes on the companys general controls and has presented these to you. Background Rexxon (Pyt) Ltd, runs its accounting applications on local area network. Terminals on the network are located on users desks in various departments (e.g stores, wages), whilst the network servers are located in a room (referred to by staff as the Techno Room) in which other office equipment used by the company is housed e.g printers, the facsimile machine and the office photocopier. Staff wishing to make use of the fax and photocopier or wishing to collect hard copy output must go to the techno room. Staff enjoy this arrangement as it allows them the opportunity to have a cup of coffee or tea from the drinks machine which is also located in the Techno Room and socialize with other staff members. It also contributes to the relaxed and casual atmosphere at the company which Zak Kruger and the other managers try to maintain so that employees enjoy coming to work. Network administrator The companys network is managed and maintained by Dion Reddy, the network administrator,

You are senior on the audit of Rexxon (Pty) Ltd, a medium sized wholesaler of stationery and supplies. All of the companys financial systems are computerized and you have been asked to assist in the evaluation of the companys general controls. One of the other trainees on the audit has prepared some notes on the companys general controls and has presented these to you. Background Rexxon (Pyt) Ltd, runs its accounting applications on local area network. Terminals on the network are located on users desks in various departments (e.g stores, wages), whilst the network servers are located in a room (referred to by staff as the Techno Room) in which other office equipment used by the company is housed e.g printers, the facsimile machine and the office photocopier. Staff wishing to make use of the fax and photocopier or wishing to collect hard copy output must go to the techno room. Staff enjoy this arrangement as it allows them the opportunity to have a cup of coffee or tea from the drinks machine which is also located in the Techno Room and socialize with other staff members. It also contributes to the relaxed and casual atmosphere at the company which Zak Kruger and the other managers try to maintain so that employees enjoy coming to work. Network administrator The companys network is managed and maintained by Dion Reddy, the network administrator, changed on 2nd January) Dion Reddy is also responsible for creating and maintaining user profile on the system. If any employee wishes to change any details on his profile, e.g read only access to a read and write access, a written request (on the standard document) signed by the employee must be submitted to Dion Reddy who will make the change. At the end of every second month Dion Reddys four assistants back up the data files and programmes on all terminals in the accounting department by coping the files onto external hard drives. The external hard drives are labelled and given to Dion Reddy who locks them in a drawer in his desk.

YOU ARE REQUIRED TO:

a) distinguish between general controls and application controls. (3)

b) Identify the weaknesses in the general controls at Rexxon (Pyt) Ltd based on the information provided above. For each weakness you have identified explain why it is a weakness.

You are only required to consider the following categories of general control:

1. Control environment (8)

2. Access controls (10)

3. Continuity of operations (9)