Skip to main content

ISCA CH 1 (PART 3) COBIT 5

Chapter 1
Concepts of Governance and Management of Information Systems
PART 3

As we have already discussed about basics of governance. Now this is time to understand one of the most important topic of this chapter. COBIT 5.

Control objectives for information and related technology (COBIT 5). It is developed by "Information System Audit and Control Association" (ISACA), USA.

What is COBIT 5. ( This para is for basic understanding of term)

Why and Purpose?

Its purpose is Shareholders value creation and goal achievement.

How?

Through good governance and management of IT assets.

Why of IT Assets?

Delivering enterprise stakeholders value requires good governance and management of IT assets. 
Therefore, enterprise board, executive and management have to embrace IT like any other significant part of the business.

COBIT 5 is a Governance as well as Management model.

Under governance comes 
* Evaluation
* Direction Setting 
* Monitoring

Think Like what our PM is doing right now? He is doing all above.

On the other hand, Management plans, builds, runs and monitor activities in alignment with the direction set by the governance body to achieve the enterprise objectives.

So what will COBIT 5 do?

It provides a comprehensive framework that assist enterprises to achieve their goal and deliver value through effective governance and management of enterprise IT.

Simply stated, COBIT 5 helps enterprises create optimal value from IT by maintaining a balance b/w realizing benefits, optimal risk level,  resource use and their cost.

Definition of COBIT 5

COBIT 5 brings together the 5 principles that allow the enterprise to build an effective governance and management framework based on holistic set of seven enablers ( framework is based on seven enablers but framework is build by using 5 principles) that optimizes information and technology investment and use for benefit of shareholders.

What are the 5 Principles?

We will discuss each one by one?

PRINCIPLE NO. 1

MEETING STAKEHOLDERS NEEDS 

As we all know, Enterprise exist for delivering value to stakeholders and governance objective is also value creation for stakeholders. 

Value creation = What Stakeholders need? 

Therefore, Stakeholders needs drive 
*Business Realization
*Risk Optimization
*Resource Optimization

Enterprise have many stakeholders and 'Creating Value' means different and sometimes conflicting things to each of them.

Take for example, sometimes owners want to retain profit made in the business but on the other hand shareholders want dividend. Therefore needs of both of them are different plus they are also conflicting.

Therefore, Governance is also about negotiating and deciding among different stakeholders value interest. The Governance system should consider all stakeholders when making benefit, resource and risk assessment decision.

For each decision following can and should be asked
* Who receives the benefit?
* Who bears the risk?
* What resources are required.




Other Principles is in Next Post.................




CA Mohit Jain
Ph; 08053881595
Email: camohitjain7@gmail.com









 






Labels:

Comments

Post a Comment

Popular posts from this blog

Difference Between IT Governance and GEIT (Governance of enterprise IT)

Chapter 1 Concepts of governance and management of enterprise IT DIFFERENCE BETWEEN IT GOVERNANCE AND GEIT According to our study material, IT Governance refers to the system in which directors of the enterprise evaluate, direct and monitor (First they evaluate i.e. form an opinion, then they direct i.e. what should be done and then in last they monitor i.e. what should be done is actually being done.)  IT Management to ensure  effectiveness, accountability and compliance  of IT. My dear friends, note the line (effectiveness, accountability and compliance of IT) i.e. only of IT. Now what is GEIT???? lets start with a definition..... GEIT is the system by which IT activities in a company are directed and controlled to achieve business objectives with the ultimate objective of meeting stakeholders needs.  And as given in earlier post  Corporate Governance  is a system by which  company  is  directed and controlled  to achieve objectives of increasing stakeholder
8 comments
Read more

Work Day Interface PECI (Human Capital Management) Introduction

Workday is a very popular Human Capital Management Software but they do not have good Payroll Processing Capabilities which is the final outcome of a Human Capital Software. To address this, they have given a good interface i.e. PECI Interface i.e. (Payroll Effective Change Interface). It is latest interface version given by Workday for integrating Human Capital Software with a Payroll and Statutory Compliance Software for calculating organisation tax compliance and Employee Salary. In this article, let us discuss the strengths and weakness of Workday interface and how organisations can overcome that. Strengths: This workday interface extract all the transactions in XML format which is very easy to analyse and study for any potential error or gap. It works on Pay Group ID logic where data is interfaced as per pay group id mapped to employees. With each transaction, Workday PECI use 'Update' or 'Added' Flag so Payroll vendor can easily identify the tran
6 comments
Read more

Macau (SAR) Tax with Calculator

Link to Macau Tax Calculator:  http://www.dsf.gov.mo/tax/tax_downloadapps.aspx?lang=en Introduction ·          Individuals are subject to tax on income arising in Macau. Residency of an individual has no significance in determining tax liability. ·          Professional Tax is imposed on employment and self-employment income arising in Macau. For the purpose of tax, taxpayers are divided into employees and professional practitioners. ·          Tax Year End is 31st December. ·          PAYE System is used to withhold taxes ·          TFN: When an individual commences employment, they will be requested to quote their Tax File Number (TFN) to their employer. ·          Tax Amount is rounded up to the nearest dollar. ·          When are estimates/prepayments/withholding of tax due in Macau? For example: monthly, annually, both, and so on. ·          Monthly for expatriates, quarterly for Macau residents and non-residents with a working permit. Types of Taxable C
8 comments
Read more