What Are Application Controls? Definition, Examples & Best Practices

Kezia Farnham

In 2021, the cost of data breaches reached $4.24 million — the highest count in the 17 years IBM has reported on these figures. Though compromised credentials contributed to this cost, it’s not the only factor; IBM reported that the drastic increase in remote working due to COVID-19 boosted the cost of breaches compared to those where remote working wasn’t a factor. 

Since remote working is likely here to stay, organizations need new ways to protect their data. This all begins with effective application control, which should include an integrated internal controls management tool to boost efficiency. Though application controls can be executed in various ways, their primary purpose is to safeguard data transmitted between users and applications. 

Effective application control can save businesses millions of dollars; IBM found that organizations that used security artificial intelligence (AI) application controls spared $3.81 million in costs in 2021 compared to those that did not. 

Here’s everything organizations need to know to mitigate data risks with application controls. 


What Are Application Controls? 

Application controls are the steps organizations can implement within their applications to keep them private and secure. Though applications are an inevitable and vital part of the daily operations of modern organizations, they also put organizations at an unprecedented risk of breach. 

Every time information is transmitted from one user or application to another, the organization could be compromising its data. IT application controls help mitigate the risks of using these tools by putting various checks in place. These checks authenticate applications and data before it’s allowed into or out of the company’s internal IT environment, ensuring that only authorized users can take action with the company’s digital assets. 


Application Controls vs. General Controls

Application and general controls are distinct but equally important security controls. Both controls are critical to ensure that organizations with information technology systems adhere to cybersecurity benchmarks. Understanding the key differences can help companies execute both in tandem, so their systems remain secure. 

General Controls

These controls apply to all computerized systems. But they aren’t just digital. Software, hardware and manual controls all fall under the umbrella of general controls. This includes the various safeguards within the system that apply to computer operations, administration, data security, software, hardware and more. 

Firewalls and antivirus software are common types of general controls that will apply throughout the IT system. 

Application Controls

These controls are more specific, focusing on a narrower portion of the organization’s information systems. While general controls include a wide variety of control types, application controls include just three: input, which authenticates information entered into the system; processing, which verifies information being transmitted; and output, which validates information being sent out of the system. 

IT application controls are highly specific to the organization’s system, like checking that data is entered in the required format before allowing it into the system. 


Types & Examples of Application Controls 

There are three types of application controls. While each type of application control can be executed in a variety of ways, together, they cover all parts of an application. 

Input Controls

This application control governs the data inputs in an application. Input controls prevent users from entering unvalidated information into the system. These controls might require data to be entered in a given format or authorization on all inputs before adding them to the information system. 

Input Controls Example

Applications can include input controls around data editing, ensuring that only certain fields can be edited. Another control is separating the functions of each user, so unique users must initiate and authorize the action. 

Output Controls

These controls safeguard data when transmitting it between applications. With output controls, organizations verify that the data gets sent to the right user by tracking what the data is, whether or not the data is complete and the data’s final destination. When implemented correctly, output controls ensure that data won’t be transmitted until all checks are successfully passed. 

Output Controls Example

Authentication is an example of an output control, in which the system authenticates data before it leaves the system. Authorization is another tool that requires the application to confirm that the user has the approval to complete the action. 

Processing Controls

With processing controls, organizations verify that incoming data is correctly processed before it’s added to the information system. This verification involves establishing rules for processing data, then ensuring that these rules are followed every time the application transmits data. For instance, it may mean limiting the number of checks or verifying that the totals are reasonable. 

Processing Controls Example

Validity checks are a type of processing control that requires the application to confirm that all processed data is valid. It means ensuring that the data is in the required format or sent to the correct user. 

Access Controls 

Not all users need the same level of access to the application. Application controls establish which actions a user has access to; some users may only be able to view data, whereas others might be able to modify existing data or even add inputs. 

Access Controls Example

Systems with effective access controls should have checks verifying each user’s identity. It might be two-factor authentication upon login or requiring that a user enter a unique code in addition to their credentials. Zero trust frameworks also enhance access controls. 

Integrity Controls

Applications should verify all data is complete and accurate. Integrity controls create rules for what constitutes complete information, such as the accepted input format for different types of data.

Integrity Controls Example

Suppose users are often filling out forms within an application. In that case, the integrity controls might check that any dates entered are in the correct format or that the inputs don’t contain more than the acceptable number of characters. 


Auditing IT Application Controls

Data risks are constantly evolving, which is why organizations must ensure that their systems keep up. They can do this by conducting regular application control audits. These audits involve analyzing and cataloging every software application in use, then ensuring that all transactions and data hold up against the necessary controls. 

Audits can occur in one of two ways. Administrators can go through every process within the application, documenting which controls are adequate, which need to be improved and which need to be added. But audits can also take a more aggressive approach, called black-box testing. With black-box testing, administrators approach the application as if they were a hacker, searching the application for weaknesses in a runtime environment. 

Both approaches can be time-consuming and costly, but they pay back the organization by ensuring that data and transactions remain private and secure. 


Automating Internal Controls

Manually managing application controls is possible. However, it’s also potentially costly and time-consuming, both of which can threaten data security. Automating internal controls can help organizations better engage the three lines of defense, delivering a higher level of assurance to all stakeholders, including the board of directors, while also helping to enhance the overall governance, risk and compliance (GRC) profile.

Internal Controls Management from Diligent automates much of the application control process, from centralizing control testing and workflows to tracking and reporting all gaps in protection in a single interface. Automated tools like Internal Controls Management allow organizations to stay ahead of risks and achieve more peace of mind while cutting costs by stopping data breaches before they start. 

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Kezia Farnham Diligent
Kezia Farnham
Kezia Farnham, a Senior Manager at Diligent, has spent several years working in the B2B SaaS sector. Her expertise in equipping governance, risk, audit, compliance and ESG professionals with key insights into sustainability, cybersecurity and the regulatory landscape helps them stay ahead of an increasingly challenging business environment.