Nowadays, with the development of information technology, almost every company has involved in the widely used of computer technology to deal with their daily business transactions. From this point, the control framework has mainly divided into two basic categories: one is manual control which requires an operator to activate or deactivate the control device. Another is automated control which regulates the business activities without much human intervention (Protiviti, 2011).
In this section, we discuss the benefits and shortcomings of these two methods and compare them. Automated control The standardized, computerised automated control system is no doubt a good choice in terms of the large companies. It can reduce the risk result from the external and internal influences so that the company can save the unnecessary cost (Protiviti, 2011). One of the examples is Nordic bank, which applies more than 5,000 internal and external controls in its processes that dealing with technology, operation and financial.
The total yearly saving is about 2,905,000 (Dutta, A. & Dopp, D. , 2011). However, the limitation of automated control is also obvious. Because of the complexity of the application of this system, companies should take special training for personnel so that people know how to use it. This comprises a relatively high cost for the entity. Manual control The manual control system is most widely used in the small business because of its simplicity and great sense of control that gives to the business owner.
This could be illustrated by using the example like grocery which only carries a small amount of business date to process. For simplicity, the owner can easily keep track with daily business transactions by using a manual system and there is no need for the owner to spend time and money to learn the complex software. Furthermore, the manual control system is also likely to give the business owner an impression that every transaction is in control. Instead of using computer to deal with the orders, the owner could manage the process on his own (Carr, J. amp; Cohen, G. ,2008).. However, the disadvantages of manual control can also be obvious. Firstly, it may require massive labour force to maintain. It may needs continuous monitoring to make sure that the inventory is sufficient and every transaction has been correctly recorded. Secondly, human errors are unavoidable as the system relied heavily on the actions of people. As a consequence, additional cost is likely to happen in the processing of correcting (Carr, J. & Cohen, G. ,2008). Recommendations
From the analysis above, it shows that both manual and automated control has advantages and disadvantages but they achieve the same goal. It’s almost impossible to decide which one is prior to the other. It depends on the scale of the business to choose the proper size. Small and medium businesses may prefer manual control due to its limited cost and simplicity. However, large corporations is likely to apply automated control system, which is more efficiency and helpful to minimize mistakes made by operators.