A vault for a pencil
Imagine a firm that buys a bank vault to guard a box of pencils. It is safe, but silly.
Now imagine it guards the customer list with a sticky note saying "please do not look".
Good security fits the control to the risk and to the value of the thing guarded.
By the end of this lesson
Note
I can choose a control that fits the value of an asset and the size of its risk.
Key words
| Word | What it means |
|---|---|
| Asset value | what an asset is worth to the organisation |
| Control | something that lowers a risk |
| Proportionate | in the right size for the risk and the value |
| Review | a regular look to see whether something still works |
| Internal auditor | a checker who works for the organisation |
| External auditor | a checker from an outside firm |
| Supplier | another company that gives you goods or services |
The cells students fill in are left blank in this preview.
Starter
Have a go
Starter
3 questionsYour answers are marked here and are not kept. A college account keeps every student’s marks.
Weigh the asset against the control
A control costs money, time and effort. So ask two questions.
How much is the asset worth? How much would the control cost?
A response is proportionate when its cost fits the risk and the value. Spend more on the risky and valuable. Spend less on the rest.
Worked example: is the control worth it?
| Asset | Yearly loss it could cause | Control | Cost of control | Worth it? |
|---|---|---|---|---|
| Customer records | 8000 pounds | Locked cabinet and access rules | 500 pounds | Yes |
| Spare mouse | 10 pounds | Alarmed safe | 400 pounds | No |
| Shop till data | 3000 pounds | Daily backup | 600 pounds | Yes |
The cells students fill in are left blank in this preview.
Check
Have a go
Check
3 questionsYour answers are marked here and are not kept. A college account keeps every student’s marks.