TP Limited is a medium-sized company involved in manufacturing and retailing of home appliances to cater to the daily needs of a wide range of…
CA Final · Advanced Auditing, Assurance and Professional Ethics · PYQS · November 2024
TP Limited is a medium-sized company involved in manufacturing and retailing of home appliances to cater to the daily needs of a wide range of consumers. The company has in place proper cyber security policies, procedures and framework. Regular assessment of the same is also carried out by the management. The company faced a cyber attack incident of email phishing scam which resulted in inappropriate disbursals to various individuals posing as vendors arid caused a substantial financial loss. This incident highlighted the need for strong and updated internal controls to mitigate the cyber risks. As the statutory auditor of the company, how will you evaluate the controls around the vendor setup and modifications.
Suggested Answer and Working Notes:
Evaluation of the controls around the vendor setup and modifications: Certain cyber schemes exist in which changes to bank account or other critical vendor information are requested through email phishing scams by individuals purporting to be authorized vendor personnel. Entities have inappropriately dispersed funds to these individuals and therefore inappropriately reduced the liability owed to the actual vendor, resulting in an impact to the financial statements (i.e., loss of cash and related expense) Who is responsible for making changes to vendor master data? Is the process centralized or decentralized?Are other communication channels, such as email, used to request changes to vendor master data? (If yes, consider if multi-factor authentication is enabled for email).What systems and technologies are used to initiate, authorize and process requests related to changes to vendor master data?Are authentication protocols defined to verify modifications to vendor master data (e.g., call back procedures, multi-factor authentication)?
Topics: Digital Auditing & Assurance
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