Application controls, distinct for each business application, safeguard transactions and data in computer-based systems. Unlike broader controls, they require a nuanced strategy, crucial for mitigating risks associated with insufficient understanding of technology, emphasizing the need for tailored approaches in effective IT governance
Application controls are specific to each application and relate to the transaction and data pertaining to each computer based application system. Unlike General IT Controls (ITGC), which have broad applicability across all components and processes and entity-level controls that are a part of overarching environment:
- Entity – level controls – a part of overall control environment (for example: strategy, policies, procedures, trainings, risk assessment),
- ITGC (IT General controls) – integrated into IT processes (for example change management, access management, backup & recovery management, IT operations),
- Application controls – are a part of a program or its logic,
The third one, application controls, are a critical component and reside within the program or its logic. They play a pivotal role in ensuring the accuracy, completeness, and integrity of transactions and data specific to the application. Application controls can be categorized into embedded and configurable controls. Embedded controls are intricately programmed within the application logic and can be modified only through code changes. Configurable controls are pre-set or configured, and the application operates based on specified settings such as tolerances.
These controls are intricately tied to the system they belong to. This implies that certain risks are inherently linked to the technology in use, and without a comprehensive understanding, these risks may go unnoticed or be inadequately assessed. The controls are strictly related to the system that they are a part of. It means that effectively handling application controls necessitates a nuanced strategy that considers the specific features of each IT system, including risks arising from insufficient understanding of technology.
