Accounting Information Systems 1st Edition by Vernon Richardson,Chengyee Chang ,Rod Smith

تمرين 4

The information system of Carlsbad Bottle Inc. is deemed to be 90 percent reliable. A major threat in the procurement process has been discovered, with an exposure of $300,000.Two control procedures are identified to mitigate the threat. Implementation of control A would cost $18,000 and reduce the risk to 4 percent. Implementation of control B would cost $10,000 and reduce the risk to 6 percent. Implementation of both controls would cost $ 26,000 and reduce the risk to 2.5 percent. Given the information presented, and considering an economic analysis of costs and benefits only, which control procedure(s) should Carlsbad Bottle choose to implement?