1. (a) What is IT governance? Describe four objectives of IT governance (b) Desc
ID: 2357239 • Letter: 1
Question
1. (a) What is IT governance? Describe four objectives of IT governance
(b) Describe the relationship between the risk assessment and control activities
components of the COSO framework.
2. By completing the table below, identify whether each of the following
accounting positions or duties involves authorization, recording, or
custody
Positions/Duties Recording, or authorization, or custody?
cashier
payroll processor
credit clerk
mailroom clerk
data entry clerk
deliver paychecks
deliver the bank deposit
prepare the bank reconciliation
check signer
inventory warehouse supervisor
3. There are different information systems development methodologies.
Are these methodologies mutually exclusive? Why?
Identify the ways that prototyping can be used to overcome two problems with SDLC
Explanation / Answer
Q1.a)imply put, it’s putting structure around how organizations align IT strategy with business strategy, ensuring that companies stay on track to achieve their strategies and goals, and implementing good ways to measure IT’s performance. It makes sure that all stakeholders’ interests are taken into account and that processes provide measurable results. An IT governance framework should answer some key questions, such as how the IT department is functioning overall, what key metrics management needs and what return IT is giving back to the business from the investment it’s making. We apply governance to IT investments, change projects and service delivery. Extending governance to include the systems themselves can give us the management tool we need to overcome many persistent problems in IT. Rights and equitable treatment of shareholders:Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by openly and effectively communicating information and by encouraging shareholders to participate in general meetings. Interests of other stakeholders:Organizations should recognize that they have legal, contractual, social, and market driven obligations to non-shareholder stakeholders, including employees, investors, creditors, suppliers, local communities, customers, and policy makers. Role and responsibilities of the board: The board needs sufficient relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment to fulfill its responsibilities and duties. Integrity and ethical behavior:Integrity should be a fundamental requirement in choosing corporate officers and board members. Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making. Disclosure and transparency:Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information. There is no single definition of IT governance. A quick search on the Internet shows it means different things to different people. Governance is used to describe the processes for deciding how money should be spent. It includes prioritisation and justification of investments. It includes controls on spending such as budgets and authorisation levels. Governance is used to describe many different aspects of IT change. At the low level, it is sometimes used to describe project management and control. More often it is used to describe the management and controls of a portfolio of projects. It is used to make sure that IT change processes comply to regulatory requirements. Sometimes it covers the deployment of IT staff. Governance aligns IT change and expenditure to business change and expenditure. Governance is also used to describe the management and control of IT services. Service Level Agreements (SLAs) are used to define levels of service that are acceptable to business, and then used as a basis for monitoring services. Governance makes sure that day-to-day problem fixing and support are aligned to business needs. Rather than argue which is the correct definition of governance, look at the similarities. In every case, governance involves a mix of the following: Control of the work. Co-ordination between different pieces of work. Measurement of outcome. Compliance with internal policy or regulation. Justification of spending. Accountability and transparency. Connecting with the needs of customers, the broader organisation, and other stakeholders. IT Governance focuses specifically on information technology systems, their performance and risk managment. It is the responsibility of the board of directors and executive managment. How IT is applied will have a huge impact on whether the entity will attain its vision, mission or strategic goals. Four objectives of governance are to understand the issues and the strategic importance of IT, to ensure that the enterprise can sustain its operations and to ascertain that it can implement the strategies required to extend its activities into the future. IT governance practices aim at ensuring that expectations for IT are met, IT's performance is measured, its resources are managed and its risks are mitigated. b).the relationship between the risk assessment and control activities are co related risk assessment is to analize the risk and control the risk. component of cosoAccording to COSO, the three primary objectives of an internal control system are to ensure (1) efficient and effective operations, (2) accurate financial reporting, and (3) compliance with laws and regulations. The report also outlines five essential components of an effective internal control system: ° THE CONTROL ENVIRONMENT, which establishes the foundation for the internal control system by providing fundamental discipline and structure. ° RISK ASSESSMENT, which involves the identification and analysis by management—not the internal auditor—of relevant risks to achieving predetermined objectives. ° CONTROL ACTIVITIES, or the policies, procedures, and practices that ensure management objectives are achieved and risk mitigation strategies are carried out. ° INFORMATION AND COMMUNICATION, which support all other control components by communicating control responsibilities to employees and by providing information in a form and time frame that allows people to carry out their duties. ° MONITORING, which covers the external oversight of internal controls by management or other parties outside the process; or the application of independent methodologies, like customized procedures or standard checklists, by employees within a process. We use these elements to define the control objective to be audited, assess the components of Boeing’s control system, and report the results to management. Integrating COSO in this manner adds structure to our audit process, ensures that appropriate criteria are considered in key phases of each audit, and provides a trail to support the conclusions reached. Q2. cashier - recording payroll processor - recording credit clerk - recording mailroom clerk - recording data entry clerk - recording deliver paychecks - custody deliver the bank deposit - custody prepare the bank reconciliation - authorization check signer - authorization Q3. Different methodologies are mutually exclusive. Each of different methodologies (e.g. Waterfall, Prototyping, Incremental, Spiral, Rapid application development, Extreme Programming, etc...) is best suited to specific kinds of projects based on different technical, organizational, project and team considerations. - Prototyping helps to reduce time and costs by improving the quality of the requirements and specifications provided to the developers. Any changes made in the system won't cause the cost to change exponentially more. It results in faster and less expensive software. - Prototyping encourages user involvement. Improved user involvement can allow users to test the prototype and give them a chance to provide feedback and specifications.
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