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Recommended Control Plans

19 January, 2016 - 12:35

Table 11.2 contains a discussion of each recommended control plan listed in the control matrix, including an explanation of how each plan meets the related control goals. As you study the control plans, be sure to see where they are located on the systems flowchart. Also, see whether you agree with (and understand) the relationship between each plan and the goal(s) that it addresses. Remember that your ability to explain the relationships between plans and goals is more important than your memorization of the cell entries themselves.

Recall that process control plans include both those that are characteristic of a particular business process and those that relate to the technology used to implement the application. Therefore, Table 11.2 is divided into two sections. Section A shows the process control plans that are unique to the M/S process. Section B reviews the technology-related control plans—introduced in CONTROLLING INFORMATION SYSTEMS: PROCESS CONTROLS—that apply to the particular M/S configuration in Figure 11.8. For simplicity, we have assumed that each of the plans in section B exists in our system (i.e., is a “P” plan), regardless of whether it was specifically mentioned in the narrative or not. One of the control plans described in CONTROLLING INFORMATION SYSTEMS: PROCESS CONTROLS—namely, digital signatures—is not used in this particular system because the salespeople communicate with the centralized data processing department over leased telephone lines.

You should recognize that the plans in section B (unlike those in section A) are not unique to an M/S process. Rather, they apply to any system implemented using this technology. However, when the technology of a system is appropriate, these controls are incorporated into the list of recommended control plans (step 3 in “Steps in Preparing a Control Matrix,” Table 9.1).

Table 11.2 Explanation of Cell Entries for Control Matrix in 10.8.1 Control Matrix for the M/S Process ...

A. Marketing and Sales Process Control Plans

P-1: Independent customer master data maintenance.

Operations process goal C: Only personnel in the credit department, a function separate from the sales department, add new customers to the customer master data.

Security of resources: By precluding sales being made to customers who may not be creditworthy, the organization helps to ensure the security of its resources.

Input validity: Valid sales orders include those that are made to customers for whom management has provided prior authorization. Validity is accomplished here by having the records entered by the credit department.

P-2: Enter data close to location where customer order is prepared.

Operations process goals A, B, and D, Efficient employment of resources: Use of this application strategy places salespeople in a position to process customer orders immediately and to respond quickly to customer inquiries. Being familiar with the orders allows the salespeople to input the orders more quickly. Finally, direct entry by the salespeople eliminates costs associated with the handling of orders by additional entities.

Sales input completeness: By having the salesperson enter sales data rather than forwarding to a data entry function, the risk of orders getting lost is reduced.

Sales input accuracy: Because sales personnel are familiar with the type of data being entered and can correct input errors on the spot, input accuracy improves.

P-3: Customer credit check.

Operations process goal C: The credit check is performed by ascertaining that the amount of the customer order (plus the amount of any open orders and the amount of any outstanding balance) falls within the credit limit established by the credit department. If the request falls outside the limit, then the control terminates the sale.

Security of resources: Termination of orders exceeding credit limits ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.

Sales input validity: Valid sales orders include those that fall within authorized credit limits.

P-4: Independent pricing data.

Operations process goal E: In this system, unit selling prices are obtained from the inventory master data. In this way, the inventory master data serve as an independent source of those prices. Therefore, determining the price to be charged a customer is beyond the control of the salesperson and others involved in the selling function. This independent pricing of orders helps to ensure that the company does not engage in discriminatory pricing practices in violation of the Robinson-Patman Act.

Sales input accuracy: Automatic pricing ensures that a price will be entered, and that it will be the correct price.

P-5: Independent shipping authorization.

Security of resources: To provide security over merchandise inventory, the plan requires that the system provide the shipping department with an independent authorization (i.e., a packing slip) to ship inventory to a customer. In addition, the plan calls for the system to provide an independent authorization (i.e., a picking ticket) to the warehouse to pick goods and send them to the shipping department.

Shipping notice input validity: The shipping department will not record a shipment unless it has received independent authorization to do so. This independent authorization comes in the form of picking tickets and packing slips executed by independent functions.

P-6: Packing slip tickler file.

Operations process goal D: A tickler file of packing slips maintained in the shipping department allows that department to investigate any orders that are open for an unreasonable period of time. Therefore, the plan provides assurance that goods are shipped to customers on a timely basis.

Shipping notice input completeness: Since action is taken to expedite shipments for all open packing slips, the plan also addresses the goal of input completeness of shipping notices.

P-7: Completed picking ticket file.

Security of resources: To establish that authorized inventory transfers between the warehouse and the shipping department have actually been made, this plan requires that data documenting all such transfers be maintained. Completed picking tickets, signed by the shipping department employee who received the interdepartmental transfer, provide an audit trail of inventory transfers, thereby reducing the possibility that inventory will be appropriated without authorization.

P-8: One-for-one checking of goods, picking ticket, and packing slip.

Security of resources: By comparing data on the packing slip with the data on the picking ticket and then comparing these data sets to the actual goods being shipped, this plan ascertains that inventory shipments have been authorized.

Shipping notice input validity: Comparing the goods to the packing slip ensures that shipping notice inputs are represented by an actual shipment of goods.

Shipping notice input accuracy: By comparing such items as item numbers, quantities, and customer identification, we can ensure that the input of shipping events is accurate.

B. Technology-Related Control Plans

P-9: Populate inputs with master data.

Operations process goals A, B, and D, Efficient employment of resources: Because the input is populated with data from customer and inventory master data, the salesperson uses fewer keystrokes for each input, enters data more quickly, and provides more timely responses to customer inquiries, acknowledgment of customer orders, and shipment of goods to customers.

Sales input validity: If the salesperson correctly enters a customer code and the system does not populate the input with customer master data, we presume that there is no matching customer master data and no authorized customer. This prevents the entry of invalid orders.

Sales order input accuracy, Master data update accuracy: The automatic retrieval of customer information when the customer code has been entered helps ensure the accuracy of input data because the salesperson keys less data and makes use of the customer and inventory master data previously entered and reviewed for accuracy. Automatic retrieval thus facilitates the accuracy of master data updates that are performed concurrent with data input.

Shipping notice input accuracy, Sales order master data update accuracy: When the inventory bar codes are scanned, the input data related to the product are automatically captured, reducing the risk of erroneous input. The sales order master data are updated concurrently with input.

P-10: Preformatted screens.

Operations process goals A, B, and D, Efficient employment of resources: A simplified data entry process allows the salesperson to enter orders more quickly and allows more orders to be input over a period of time.

Sales order input accuracy, Master data update accuracy: Preformatted screens populate certain fields, reject incorrectly formatted fields, and prevent the salesperson from omitting data, thus reducing input errors. The master data are updated concurrently with data input.

P-11: Online prompting.

Operations process goals A, B, and D, Efficient employment of resources: Prompting helps the user understand quickly which data should be entered, making the data input process quicker and more efficient.

Sales order input accuracy, Master data update accuracy: By forcing the salesperson to stop and “accept” the order header, online prompting is, in a sense, advising a check of data entries. The master data are updated concurrently with data input.

P-12: Interactive feedback check.

Sales order input completeness, Master data update completeness: The system tells the salesperson that the order has been accepted. The master data are updated concurrently with data input.

P-13: Programmed edit checks.

Operations process goals A, B and D: Editing and correcting data as it is input, rather than later, helps process orders in a more timely manner.

Efficient employment of resources: Programmed edits provide quick, low-cost editing of event data. Sales order input accuracy, Master data update accuracy: The system rejects erroneous data input. The master data are updated concurrently with data input.

P-14: Compare input data with master data.

Operations process goal D, Efficient employment of resources: Shipments may be processed more quickly and at a lower cost if errors are detected and prevented from entering the system.

Security of resources, Shipping notice input validity: If there is no open order in the sales order master data or if the shipment quantities exceed the open quantities, the input shipment may not be authorized.

Shipping notice input accuracy, Sales order master data update accuracy: By comparing the input shipping notice to the sales order master data, erroneous or suspect input data may be identified. The master data are updated concurrently with data input.


We discussed each of the plans listed in section B in CONTROLLING INFORMATION SYSTEMS: PROCESS CONTROLS, including an explanation of how each plan helps to attain specific control goals. We will not repeat that discussion here except to point out, as necessary, how and where the plan is implemented in the M/S process pictured in Figure 11.8. If you cannot explain in your own words the relationship between the plans and goals, you should review the explanations in CONTROLLING INFORMATION SYSTEMS: PROCESS CONTROLS.

Review Question

How does each control plan listed in the control matrix in Figure 11.13 work?