Core Concepts of Accounting Information Systems 12th Edition by Carolyn Strand Norman, Mark Simkin

Exercise 1

The Espy Company recently had an outside consulting firm perform an audit of its infor- mation systems department. One of the consultants identified some business risks and their probability of occurrence. Estimates of the potential losses and estimated control costs are given in Figure 12-11 .
a. Using the Figure 12-11 information, develop a risk assessment for the Espy Company.
b. If you were the manager responsible for the Espy Company's information processing system, which controls would you implement and why?