Collins Harp Enterprises

Background
You are the new IT audit specialist at the accounting firm of Townsend and Townsend
LLP. One of the audit partners, Harold Mobley ased you to e!aluate the
effecti!eness of general and application IT related controls for a potential new client.
"ollins Harp #nterprises which is a pri!ately owned business. $uring a round of golf
last wee, an e%ecuti!e of "ollins Harp #nterprises ased Harold to ha!e someone
with good It training loo at the company& s IT systems de!elopment process. Harold
recently summari'ed the following information about "ollins Harp&s IT systems
de!elopment process based on his recent con!ersations with Linda (eth, IT !ice
president at "ollins harp.
IT Summary
"ollins Harp #nterprises de!elops most of its computer software applications in
house. O!er the past se!eral years, Linda (eth has been able to hire se!eral good
software programmers with relati!ely strong programming e%perience. (he has
assembled a team of fi!e programmers who handle most of the applications and
system programming needs. )ecause of these strong bacgrounds, Ms. (eth in!ol!es
all fi!e programmers in new application de!elopment or modifications to e%isting
applications and also in!ol!es all of them in operating security, utility and other
system software programming and maintenance tass. The staff is relati!ely !ersatile,
and any on of them is able to handle the programming demands of most changes.
Linda notes that because the programmers are typically more *free+spirited,, she
prefers to gi!e the programmers relati!ely free latitude in the de!elopment of new
applications or modifications to e%isting applications. (he comments that the
programmers lie to !iew their wor as a form of art. -s a result, she notes that the
programmers *attac, the programming logic, de!elopment using their own, uni.ue
programming style and approach. (he belie!es that such *freedom, for the
programming staff enhances the .uality of the application de!elopment.
/ew applications are generally initiated by Linda after she identifies suggesting for
changes to e%isting applications based on con!ersations with similar IT personnel at
other companies. )ecause she regularly attends IT de!elopment conferences, she
belie!es that she is in the best position to identify ways to impro!e current application
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procedures. Occasionally, non IT personnel 0lie accounting department personnel
who wor with the accounting systems1 identify suggested changes. Linda notes that
she generally hears about application changes or new application ideas from non IT
personnel in informal meetings such as o!er lunch in the company cafeteria or when
bumping into people in the office hallways. 2hen that occurs, she maes mental note
to tae bac to her programming staff.
2hen applications are de!eloped or changes are made, the assigned programmers
generally telephones or emails the non+It personnel primarily responsible for the
application to discuss the programmer&s suggested modifications and to get their
unofficial *blessing, to proceed. Occasionally the programmers meet with the
respecti!e personnel, if re.uested. Howe!er, the programmers generally feel that
such meetings ha!e limited benefit because users ha!e !ery little understanding of the
programming logic used.
If the programmer is maing a modification to an e%isting application, he or she
maes a copy of the current program tape or dis to that they don&t ha!e to reprogram
the entire application. )efore beginning, the programmer generally tries to meet with
the programmer who was pre!iously in!ol!ed with any programming associated with
this application to get a *big picture feel, for the application. 3i!en the small si'e of
the programming staff, the programmer can generally identify the person last in!ol!ed
with this application by taling with the other programmers. The programmer locates
documents related to the programming logic maintained in the programming
department&s files. 3enerally, this documentation includes a hardcopy of the program
logic along with notes made by the prior programmer about the format of the logic
used. The newly assigned programmer is able to recreate a trail of the most recent
modifications to the application from these notes.
Programmers test all application de!elopments and modifications. To increase the
independence of the testing, Linda assigns a different programmer to perform the
testing of the application before implementation. The test programmer creates a
fictitious data set by copying one of the actual data sets used in the rele!ant
application. The test programmer performs a test of the new application or
modification and documents the results. Linda says that there are tight controls o!er
program testing because of her detailed re!iews of all program test results and
personal appro!al of each program before implementation into li!e production. -nd,
she adds that copies of all test results are maintained in the files for subse.uent
re!iew.
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Once Linda belie!es that the program is accurately processing the test data, she
appro!es the program for implementation into li!e production. Linda notes that it is a
big e!ent for the programmers when their application is ready for implementation.
(he comments that the programmers tae pride in the completion of the pro4ect and
that all the programmers celebrate once the pro4ect programmer announces that he or
she compiled the final !ersion into ob4ect code and forwarded the ob4ect code !ersion
to the IT Libraries.
REQUIRE!
Identify three deficiencies in the IT (ystems $e!elopment and Program "hange
Process. -s part of the audit woring papers documentation, complete the worsheet
as follow 0total 56 mars and see below for mars breadown1 7
"orks#eet To Support T#e $udit %indings $nd Recommendations
e&iciencies In IT
Systems e'elopment
$nd (rogram C#ange
(rocess
)1 mark eac# to a total
o& 3 marks*
escription +& T#e
,oted e&iciency and t#e
Risks-Impact
)2 marks eac# to a total
o& . marks*
Recommendation To
/itigate ,oted
e&iciency
08 mars each to t a total
of 9 mars1
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