1. DISCUSSION QUESTIONS
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1. Oral communication skills are very important. The users of the system need to be
able to accurately and effectively articulate their needs to the systems analysts. Also,
the systems analysts need to effectively interview the users so that the users are
2. The systems maintenance period may last from five to ten years. During this period
changes may need to be made to accommodate changes in user needs, but these
3. If the system’s requirements stage is rushed, then the users’ needs may not be fully
investigated or revealed. Thus, the system may be built prior to the determination of
the appropriate and complete set of requirements. If the system is built with an
inadequate set of requirements, then it will not produce the desired results. Users
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4. The independence issue becomes problematic in the subsequent year systems
review process. Having a system audited that was initially proposed by the
5. Systems professionals should perform the systems development tasks since they
are trained in SDLC methodologies. They should consult with the users, who set the
6. These are leading indicators: if customers are not satisfied, they will eventually find
other suppliers that will meet their needs. Poor performance from this perspective
7. The power of the BSC model lies in the linkages between the four core
8. A strategic plan should avoid excessive detail and it should provide a plan for a
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9. A symptom is the result of a problem. Unfortunately, firms often try to fix a symptom
rather than a problem. Decreased output by workers is a symptom, not a problem. If
management were to attempt to solve this situation by hiring more workers, the
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10. The systems project proposal provides management with a basis for deciding
whether or not to proceed with the systems project. One purpose it serves is to
summarize the findings of the preliminary study into a general recommendation for
either a new or a modified system. Another purpose is to outline the links between
the objectives of the proposed system and the firm’s business objectives. These
11. Firms typically understate the implementation time. One reason this occurs is due to
overly optimistic training time of employees. Another reason is that hardware may
not arrive on time. Debugging programs is another area that is underestimated. Data
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12. Top management must provide a clear message that the system is important and
also support it with adequate resources in terms of funds and personnel. If top
management does not send a signal that a system is important, employees (future
users of the systems) which are already busy with their assigned duties may not
understand the importance of their input into the new system. They may view the
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13. A system that is easier to access and provides information easily may generate
more inquiries than the old system did. Take for example the account balance inquiry
systems offered by most credit card companies. The old method of account balance
inquiry by cardholder involved a conversation between the cardholder and an
account representative. The account representative would ask the cardholder for
information and then proceed to give the information to the cardholder. Many of
14. Yes, The legal concern has to do with the illegal selling of tickets to minors; however,
some states have such machines.
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2. MULTIPLE CHOICE
1. D
2. B
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3. PROBLEMS
1. SYSTEMS PLANNING – ANNOUNCING A NEW INFORMATION SYSTEM
The issues to be addressed include the following:
• The decision to exclude users from the development process is flawed.
• During systems development, systems professionals should work with the
primary users to obtain an understanding of the users’ problems and a clear
statement of their needs.
• A survey of the current system is essential. The consultants need to gather
facts: These include facts about. Data sources, users, key Processes,
controls points, transaction types and volumes, error rates, resource costs,
bottlenecks and redundant operations.
• Some of the above facts can be gathered independently through
documentation, but many of them can be obtained only through user
participation. This includes personal interviews, open-ended questions, and
structured questionnaires.
• The internal auditor should be involved in the development process. An
internal audit group, astute in computer technology and with a solid grasp of
the business problems of users serves in an essential liaison capacity.
• The internal auditor must ensure the auditability of the system. Some
computer auditing techniques such as the Embedded Audit Module (EAM)
and the Integrated Test Facility (ITF) need to be designed into systems as
integral components.
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• The internal auditor is best qualified to determine if the system under
consideration is a good candidate for integrated audit features.
• The auditor should be involved in the final system selection to assess the
economic feasibility of the proposed system.
2. PROBLEM IDENTIFICATION
a. declining profits—symptom; possible problems-production process, which is
producing defective products and causing a decline in sales or increased costs due
to high maintenance of outdated machinery
b. defective production process—problem; possible symptoms-declining sales or
increased COGS due to labor time for reworks
c. low quality raw materials—problem; possible symptoms-declining sales or
increased COGS
d. shortfall in cash balance—symptom; possible problems-loose accounts
receivable collections or over purchase of inventory
e. declining market share—symptom; possible problems-producing the wrong
product mix (i.e. producing unwanted items) or poor customer service
f. shortage of employees in the accounts payable department—problem; possible
symptoms-increased discounts lost or increased errors in processing tasks
g. shortage of raw material due to a drought in the Midwest—problem;
symptom-declining profits or unfilled customer orders. NOTE: could also be
viewed as a symptom of relying too heavily on one supplier.
h. inadequately trained workers—problem; possible symptoms-higher COGS or
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decreased sales. NOTE: could also be viewed as a symptom of poor training
policies/ procedures at the company
i. decreasing customer satisfaction—symptom-possible problems-defective
production process or poor distribution means
3. SYSTEMS DEVELOPMENT AND USER INVOLVEMENT
a. Management should announce the plan and try to gain support from the very
beginning. The proposed plan will probably backfire and cause the architects to
waste time trying to guess what is happening. (Secrets are not easily held in
organizations. The consultants will be seen in meetings with management.) Anxiety
may result, and as a worst case scenario, some of the best and most marketable
employees may seek employment elsewhere.
b. The systems development
process should include the end users. The day-to-day users of the CAD
system will be the architects, and these architects should play a very
active role in the development process. If they do not, their needs most
probably will not be fully met and they will not accept the system.
4. SYSTEMS ANALYSIS
a. The systems professionals are more likely to understand the needs of the new
system if they fully understand the operations of the old system. This understanding
of the old system will help them to assess and incorporate the user’s likes and
dislikes of the old system into the new system. The manager of the user department,
however, has a legitimate concern that too much time will be spent studying “what is”
rather than “what should be”. A clean slate oftentimes results in more innovative
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solutions.
b. The old system needs to be
understood at some level. I would propose that a very fundamental
analysis, within a given time frame, of the current system be conducted
with the focus on the likes and dislikes. Then a new systems
requirements analysis should begin with a prioritized list of requirements,
as suggested by Meyer.
5. FACT-GATHERING TECHNIQUES
Neither observation or task preparation will provide much help in learning how
auditors comply with Section 404, instead personal interviews and review of key
documents would be more helpful.
Perhaps the review of two key documents might be a good starting point. The
first might be the Sarbanes-Oxley Act itself. This document could provide the
framework of compliance. Another document of which a review could be helpful
is a previously prepared report on internal controls. Since this document is an
end requirement of the Act, the information and content of the report should
provide additional understanding of the information the system must be able to
produce.
Conducting a personal interview of members of the internal audit department
who are responsible for compliance will also be helpful. These auditors can
provide answers to such questions as what data must come from the system
and which controls must be programmed in order to comply.