MGAD30H3 Chapter Notes - Chapter 5: Externals, Raaf Support Command, Internal Audit

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Published on 9 Jul 2013
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Chapter 5 Systems Development and
Program Change Activities
Overview:
Identify stages of SDLC (systems development life cycle)
Common problems that lead to failure in the systems development
Understand strategic system planning
Accountants role in SDLC
Structured and object-oriented approaches to system design
Cost-benefit analysis of proposed information systems
Pros/cons of commercial software option and discuss decision-making process
System walkthrough
System documentation and their purpose
Participants in systems development
Systems professionals those who build the program
End users whom the system is built for
Stakeholders within/outside of organization who have an interest but are not end
users
Accountants/auditors addresses controls, accounting/auditing issues
Why are accountants/auditors involved?
Significant financial information and transactions
Nature of the products that emerge from the SDLC, quality of accounting
information
Info systems acquisitions
In-house development require systems that are highly unique
Commercial systems low costs, industry-specific vendors, businesses are too small
to in-house, downsizing of organizations
o Turnkey systems: finished and tested systems that are ready for
implementation
General accounting systems (i.e. Simply Accounting) purchase
modules that meet their specific needs (i.e. AR module)
Special-purpose systems target selected segments of the economy
(i.e. medicine) that have unique accounting procedures and rules
Office automation system (Microsoft office)
o Backbone systems: provide basic system with all primary processing
modules programmed
o Vendor-supported systems: hybrids of custom and commercial systems. The
system themselves are custom but the development service is commercially
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available client is dependent on the vendor for custom programming and
maintenance
Pros of custom
o Short implementation time, low cost, reliable
Cons of custom
o Independence, the need for custom, and maintenance dependence
SDLC (Systems Development Life Cycle)
8 steps:
o Plan
Linking projects to objectives of the company
Strategic systems planning involves the allocation of systems
resources at the macro level (i.e. resource budgeting)
Why?
A plan is better than no plan
Reduces crisis component in systems development
Provides authorization control for SDLC
Cost management
Project planning is to allocate resources to individual applications
within the framework of the strategic plan
Project proposal provides basis for deciding whether to
proceed with the project first and connects plan to objectives
Project schedule budgets times and costs for all stages
Auditor’s role
Examine the systems planning phase
o Analyze
First survey the current system, then what the user’s needs are
Survey
o Determine what can be salvaged
o Cons: stuck thinking too much about current system,
limits creativity
o Pros: determine what should be kept, helps
understands current/new system, determining the root
problem
Gather information
o Data sources, users, data stores, processes, data flows,
controls, transaction volumes, error rates, resource
costs, bottleneck/redundant operations
How to gather information
o Observe, task participation, personal interviews, and
reviewing key documents (i.e. org charts, job
descriptions, budgets, forecasts)
Auditor’s role
o Auditor’s need to express their needs (i.e. logs, audit
trails)
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Document Summary

Identify stages of sdlc (systems development life cycle) Common problems that lead to failure in the systems development. Structured and object-oriented approaches to system design. Pros/cons of commercial software option and discuss decision-making process. Systems professionals those who build the program. End users whom the system is built for. Stakeholders within/outside of organization who have an interest but are not end users. Nature of the products that emerge from the sdlc, quality of accounting information. In-house development require systems that are highly unique. Commercial systems low costs, industry-specific vendors, businesses are too small to in-house, downsizing of organizations: turnkey systems: finished and tested systems that are ready for implementation. General accounting systems (i. e. simply accounting) purchase modules that meet their specific needs (i. e. ar module) Special-purpose systems target selected segments of the economy (i. e. medicine) that have unique accounting procedures and rules.

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