How does information technology impact internal controls?

The choice that highlights how information technology impacts internal controls is centered around the automation of processes and the enhancement of data security. Information technology enables organizations to streamline their internal controls by using automated systems to manage and monitor processes more efficiently. This reduces the reliance on manual procedures, which can be prone to human error, inconsistency, and time-consuming activities.

Moreover, automation brings about a higher level of accuracy and speed in transactions, enabling real-time data processing and reporting. This shift not only removes the burden of excessive paperwork but also allows for more effective and timely decision-making. Additionally, with advancements in technology, data security measures can be significantly improved, ensuring that sensitive financial information is better protected against unauthorized access and breaches. The combination of these factors results in a more robust internal control environment, contributing to the integrity and reliability of financial reporting.