This question is from Auditing and Assurance Services 16th Edition, Chapter 11,

Question

This question is from Auditing and Assurance Services 16th Edition, Chapter 11, Question 11-30.

computerized accounting system for all financial statement cycles. During planning, you visited with the information systems vice president and learned that personnel in informa tion systems are assigned to one of four departments: systems programming, applications programming, operations, or data control. Job tasks are specific to the individual and no Part 2 / THE AUDIT PROCESS responsibilities overlap with other departments. Hardwood Lumber relies on the operat- ing system software to restrict online access to individuals. The operating system allows an employee with "READ" capabilities to only view the contents of the program or file. CHANGE" allows the employee to update the contents of the program or file. "RUN" allows the employee to use a program to process data. Programmers, both systems and applications, are restricted to a READ-only access to all live application software program files but have READ and CHANGE capabilities for test copies of those software program files. Operators have READ and RUN capabilities for live application programs. Data con- trol clerks have CHANGE access to data files only and no access to software program files. The person in charge of operations maintains access to the operating software security features and is responsible for assigning access rights to individuals. The computer room is locked and requires a card-key to access the room. Only operations staff have a card-key to access the room, and security cameras monitor access. A TV screen is in the information systems vice president's office to allow periodic monitoring of access. The TV presents the live picture and no record is maintained. The librarian, who is in the operations depart ment, is responsible for maintaining the library of program files. The librarian has READ and CHANGE access rights to program files. Backup copies of program files are stored on an external drive, and data files are maintained on a backup server. The external drive and backup server are located in a room adjacent to the computer room. a. Identifythe strengths of Hardwood Lumber Company's computerized accounting system. b. What recommendations for change can you suggest to improve Hardwood's infor- Required

Explanation / Answer

answer for a)

Here,mostly everything is systematically maintained and well planned.The following are considered to be strengths of Hardwood Lumber Company:

1)The option change is given only to those who require it and hence integrity is well maintained.

2)There is check on employees to avoid chances for making fraud by the employees.

3)Keeping an incharge for access control will be another major strength for Hardwood Lumber Company.

4)Maintaining back up for Data files in backup Server will be useful as it is available when it is needed and also helps in preventing the loss of data.

5)The division of work seems alright and hence no department is directly depended on another department although they are directly depended.

Answer for b)

These are the following areas where I feel like Hardwood Lumber Company needed to get improved:

1)Maintaining backup server in same building will be a problem in conditions like fire accidents.

2)Employees especially person incharge of operations and librarian of operations needed to be changed regularly to prevent any chances of planning of fraud.

3)There must be also Backup for security camera to prevent unauthorized access at the time of absence of Vice President and also it acts as an evidence when needed.

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