Internet Auditing Case : Harley Davidson

Case : Harley Davidson

1. Business risks that Harley-Davidson may be facing by integrating eBusiness into its supply-chain management system are:

a) Adaptability to the new management system could require a long period of time

b) Suppliers may not be compatible with HD’s new system

c) If an unexpected interruption occurs at HD’s management system, the suppliers would not be able to access the data and have no idea the amount of new products need to be produced

d) Connecting with the suppliers could increase vulnerability and possibility of breach of HD’s data to its competitor. In this case, HD’s confidentiality and integrity of information are at risk

e) Potential risk of the management system been attacked by a third party (hackers)

f) Data theft due to paperless transactions and exchanging information online.

In addition, the shift to the new system results in automation in many transactions completed online, this poses the risk of employees at HD or its suppliers gaining the opportunity to commit fraud. The opportunity for fraudulent transactions arise when there are lack of audit trails due to the elimination of the traditional paper-based transactions

2. Controls that Harley-Davidson might have implemented to mitigate the business risks are:

a) Establishment of a company-wide policy or procedure on appropriate usage of the new management system

Provide adequate trainings to the employees and suppliers on the operation of the new management system

b) Suppliers must have the technical abilities to run the system

c) Ensure that backups are conducted often and if possible, have a contingency plan in place (BCP/DRP, hot site, warm site, or cold site)

Keep a backup of all the transactions in an offsite location which ensures the availability of these data when an audit requires reviewing them

d) Proper segregation of duties must be maintained between HD’s employees as well as suppliers

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