Question

Smith, a certified public accounting firm, was engaged to audit the financial statements of the Sky-is-the-Limit company. The company has its own IT installation. While obtaining an understanding of internal control, Smith found that Sky-is-the-Limit lacked proper segregation of the programming and operating functions. Smith analyzed the internal control surrounding the system to ensure that the corporate governance was being maintained, and he concluded that the existing compensating general control activities provided reasonable assurance that the objectives of internal control were being met.

Please discusses the following:

How is the separation of the programming and operating functions accomplished in a properly functioning IT environment?

Explain the 3 subdivisions of information systems management, and discuss how they apply to this situation.

Answer 1

How is the separation of the programming and operating functions accomplished in a properly functioning IT environment?

Answer

(a) In a properly functioning IT environment, how is the separation of the programming and operating functions achieved? Here in auditing under computer environment, the key internal control purpose can be achieved by restricting the operator from accessing the computer or to make any input or output any documents and operating program credentials. He should be prevented from changing any operating programs Duri ing production processing, the programmers ust not be permissible into the computer room. Proper prior scheduling must be present for test and it ought to be run by the operators. And the operators must not be allowable to make any changes in the program while it is being processed. If any programs are unsuccessful and error takes place, i is supposed to be sent back to programmers for rectification and the operators must not try to fix any issues. (b) What are the compensating general controls that you most likely found? Compensating controls are the controls which are in user department. It is an uncomplicated process system whereby it ensures that all the transactions have been processed, and assur ance that Proper and authorized transactions has only taken place. The mostly found compensating controls under programming and operating functions are (a) Two or more oper (b) Comparison to a control value with the program code value to ensure efficiency (c) Analysis as to the time lost in errors in computer (d) Relate the average computer time to a particular standard (e) Regulation and control of all operations in computer () The proper administration of rotation of computer duties being performed (g) Adequate allocation of proper vacation to all employees. ators performing joint operations

Explain the 3 subdivisions of information systems management, and discuss how they apply to this situation.

Answer

The 3 subdivisions of information systems management are as below

Corporate level

Team Level

Individual level

The global level uses the information generated by the whole information system as a way to guide decision making and set strategic goals

The team level shares the information that is important to the day to day activities of running the firm

At the individual level we have users of the information turning data into reports, spreadsheets, or meaningful information.