Final answer:
The potential benefits of information technology for an entity's internal control include improved efficiency, streamlined processes, and enhanced communication. However, there are also risks such as increased cybersecurity risks, reduced flexibility, and reduced compliance.
Step-by-step explanation:
Benefits:
- Improved efficiency: Information technology can automate manual processes, reducing the time and effort required to complete tasks.
- Streamlined processes: IT systems can help simplify and standardize business processes, leading to increased productivity.
- Enhanced communication: IT enables efficient and effective communication within and between departments, improving collaboration and coordination.
Risks:
- Increased cybersecurity risks: IT systems are vulnerable to hacking and data breaches, posing a threat to the security of sensitive information.
- Reduced flexibility: Overreliance on IT systems can limit an entity's ability to quickly adapt to changing business needs and market conditions.
- Reduced compliance: Inadequate IT controls can lead to non-compliance with regulatory requirements and increased legal and financial risks.