PARTICIPANTS
Systems professionals
End users
Stakeholders
ACCOUNTANTS
Internal
External
Limitations of involvement
ACCOUNTANTS/AUDITORS
Why are accountants/auditors involved?
Experts in financial transaction processes
Quality of AIS is determined in SDLC
I.S. AQUISITION
In-house development
Purchase commercial
systems
TRENDS IN COMMERCIAL
SOFTWARE
Trends in commercial software
Relatively low cost for general
purpose software
Industry-specific vendors
Businesses too small to have inhouse IS staff
Downsizing & DDP
TYPES OF COMMERCIAL
SYSTEMS
Turnkey systems
General accounting systems
Typically in modules
Special-purpose systems
Example banking
COMMERCIAL SYSTEMS
Advantages
Implementation time
Cost
Reliability
Disadvantages
Independence
Customization needs
Maintenance
Systems planning
Systems analysis
Conceptual systems design
System evaluation and selection
Detailed design
System programming and testing
System implementation
System maintenance
SYSTEMS PLANNING
PHASE I
PURPOSE:
SYSTEMS PLANNINGPHASE I
Level 1 = Strategic systems planning
Why?
1. A changing plan is better than no plan
2. Reduces crises in systems development
3. Provides authorization control for SDLC
4. It works!
SYSTEMS PLANNINGPHASE I
Auditors role in systems
planning
Auditability
Security
Controls
SYSTEMS PLANNINGPHASE I
SUMMARY
Identify users needs
Preparing proposals
Evaluating proposals
Prioritizing individual projects
Scheduling work
Project Plan allocates resources to specific
project
Project Proposal Go or not
Project Schedule represents mgmts
commitment
SYSTEMS ANALYSISPHASE II
PURPOSE:
Survey step
Disadvantages:
Tar pit syndrome
Thinking inside the box
Advantages:
SYSTEMS ANALYSISPHASE II
Gathering facts
Data sources
Users
Data stores
Processes
Data flows
Controls
Transaction volumes
Error rates
Resource costs
Bottlenecks
Redundant
operations
SYSTEMS ANALYSISPHASE II
Fact-gathering techniques
Observation
Task participation
Personal interviews
Reviewing key documents
(see list, p. 147)
Auditors role
CAATTs (e.g., embedded modules)
Reusable objects
Creation of modules (library, inventory of objects)
3. Auditors role
Identify costs
Identify benefits
Compare the two
ONE-TIME COSTS:
Hardware acquisition
Site preparation
Software acquisition
Systems design
Programming
Testing
Data conversion
Training
RECURRING COSTS:
Hardware maintenance
Software maintenance
Insurance
Supplies
Personnel
Allocated existing IS
Increased sales in
existing markets
Expansion into new
markets
Cost Reduction 1
Labor reduction
Operating cost reduction
Supplies
overhead
Reduced inventories
Less expensive eqpt.
Reduced eqpt. maint.
INTANGIBLE 2:
Increased customer
satisfaction
Improved employee
satisfaction
More current information
Improved decision making
Faster response to
competitors actions
More effective operations
Better internal and external
communications
Improved control
environment
Auditors role
Managerial accounting techniques
Escapable costs
Reasonable interest rates
Identify one-time and recurring costs
Realistic useful lives for competing projects
Determining financial values for intangible
benefits
DETAILED DESIGNPHASE V
PURPOSE: Produce a detailed description of the
proposed system that satisfies system
requirements identified during systems
analysis and is in accordance with conceptual
design.
User views
Database tables
Processes
Controls
i.e., a set of blueprints
Data dictionary
Processing logic (flow charts)
Procedural languages
Event-driven languages
OO languages
Programming the system
Test the application {Figure 4-8]
Testing methodology
Testing offline before deploying online
Test data
Why?
Can provide valuable future benefits
SYSTEMS IMPLEMENTATION
PHASE VII
PURPOSE: Database structures are created and populated with
data, applications are coded and tested, equipment is
purchased and installed, employees are trained, the system
is documented, and the new system is installed.
SYSTEMS IMPLEMENTATION
PHASE VII
Conversion
SYSTEMS IMPLEMENTATION
PHASE VII
Post-Implementation Review
Reviewed by independent team to
measure the success of the system
Systems design adequacy [see list p. 170]
Accuracy of time, cost, and benefit
Were back!!
Provide technical expertise
Specify documentation standards
Verify control adequacy
External auditors
SYSTEMS IMPLEMENTATION
PHASE VII
Auditors Role
Were back!!
Provide technical expertise
80/20 rule 1
Importance of documentation?
Facilitate efficient changes
Facilitate effective changes (at all!)
Preliminary
Feasibility
Project
Authorization
Systems
Planning
Project
Proposal
Systems
Analysis
System
Analysis Rpt
Conceptual
Design
DFD
(general)
Systems
Selection
Detailed
Design
System
Implementation
Feasibility
Study
Detailed
Design Rpt
Post-Impl.
Review
DFD
(Detail)
ER
Diagram
Program
Flowcharts
Project
Schedule
System
Cost-Benefit
Selection Rpt
Analysis
Relational
Model
Documentation
Normalized
Data
User
Acceptance Rpt
Audit objectives
Verify SDLC activities are applied consistently and in
accordance with managements policies
Verify original system is free from material errors and
fraud
Verify system necessary and justified
Verify documentation adequate and complete
Audit procedures
Formal authorization
Technical specifications
Retesting
Updating the documentation
SPLMS Controls
Audit objectives
Chapter 4:
Systems Development &
Maintenance Activities