Chapter 5 Flashcards
is a conceptual model used in Project Management that describes the stages involved in an information system development project, from an initial feasibility study through maintenance of the completed application.
systems development life cycle (SDLC)
is a conceptual model used in______________ that describes the stages involved in an information system development project, from an initial feasibility study through maintenance of the completed application.
Project Management
are systems analysts, systems engineers, and programmers.
Systems professionals
are those for whom the system is built. There are many users at all levels in an organization. These include managers, operations personnel, accountants, and internal auditors
End Users
are individuals either within or outside the organization who have an interest in the system but are not end users.
Stakeholders
are those professionals who address the controls, accounting, and auditing issues for systems development.
Accountants/Auditors
- The creation of an information system entails significant financial transactions.
- The nature of the products that emerge from the SDLC.
Why are Accountants & Auditors involved in SDLC?
- Accountants are users.
- Accountants participate in systems development as members of the development team.
- Accountants are involved in systems development as auditors. Accounting information systems must be
auditable.
How Are Accountants Involved with the SDLC?
it requires maintaining a full-time systems staff of analysts and programmers who identify user information needs and satisfy their needs
with custom systems
In-House Development
A growing number of systems are purchased from software vendors. Faced with many
competing packages, each with unique features and attributes, management must choose
the system and the vendor that best serves the needs of the organization.
Commercial Systems
Types of Commercial Systems
- Turnkey systems
- General Accounting Systems
- Special-Purpose Systems
- Office automation systems
- Backbone systems
- Vendor-supported systems
are completely finished and tested systems that are ready for implementation. These are often general-purpose systems or systems customized to a specific industry
Turnkey systems
are designed to serve a
wide variety of user needs.
General Accounting Systems.
that target selected segments of the economy. For example, the medical field, the banking
industry, and government agencies
Special-Purpose Systems
are computer systems that
improve the productivity of office workers.
Office automation systems
provide a basic system structure on which to
build. It comes with all the primary processing modules programmed
Backbone systems
are hybrids of custom systems and commercial software.
Vendor-supported systems
Advantages of Commercial Software
- Implementation Time
- Cost
- Reliability
Disadvantages of Commercial Software
- Independence
- The need for customized systems
- Maintenance
involves conceptual steps that can apply to any problem-solving process: identify the problem, understand what needs to be done,
consider alternative solutions, select the best solution, and, finally, implement the solution
New systems development
The objective of ___________ is to link individual system projects or applications to
the strategic objectives of the firm
systems planning
may include the chief executive officer, the chief financial officer,
the chief information officer, senior management from user areas, the internal auditor,
and senior management from computer services. E
steering committee
Who Should Do Systems Planning?
steering committee
Resolving conflicts that arise from new systems
* Reviewing projects and assigning priorities
* Budgeting funds for systems development
* Reviewing the status of individual projects under development
* Determining at various checkpoints throughout the SDLC whether to continue with
the project or terminate it
just read it
involves the allocation of systems resources at the macro
level. It usually deals with a time frame of 3 to 5 years.
Strategic systems planning
This process is similar to ___________ resources for other strategic activities, such
as product development, plant expansions, market research, and manufacturing
technology.
budgeting
is concerned with the allocation of such systems
resources as employees
strategic systems plan
- A plan that changes constantly is better than no plan at all
- . Strategic planning reduces the crisis component in systems development
- Strategic systems planning provides authorization control for the SDLC.
- Cost management.
Why Perform Strategic Systems Planning?
is to allocate resources to individual applications within
the framework of the strategic plan
project planning
provides management with a basis for deciding whether to
proceed with the project.
project proposal
The basic purpose of __________ is to allocate scarce resources to specific
projects.
project planning
The product of this phase consists of two formal documents: the __________
and the _________
- project proposal
- project schedule.
Auditors routinely examine the systems planning phase of the SDLC. Planning
greatly reduces the risk that an organization has produced unneeded, inefficient,
ineffective, and fraudulent systems. Therefore, both internal and external auditors
are interested in ensuring that adequate systems planning takes place.
Just Read
represents management’s commitment to the project. The
project schedule is a budget of the time and costs for all the phases of the SDLC
project schedule
Systems analysis is actually a two step process involving first __________ and then an __________
- a survey of the current system
- analysis of the
user’s needs.
The deliverable from this phase is a formal _________,
which presents the findings of the analysis and recommendations for the new system
systems analysis report
Disadvantages of Surveying the Current System
- Current physical tar pit
- Thinking inside the box
“sucked in” and then “bogged down”
Current physical tar pit
Advantages of Surveying the Current System
- Identifying what aspects of the old system should be kept.
- Forcing systems analysts to fully understand the system
- Isolating the root of problem symptoms
These include external entities, such as customers or vendors, as well
as internal sources from other departments.
Data sources
These include both managers and operations users
Users
are the files, databases, accounts, and source documents
used in the system
Data stores
processing tasks are manual or computer operations that represent a decision or an action triggered by information.
processes
are represented by the movement of documents and reports
between data sources, data stores, processing tasks, and users.
Data flows
These include both accounting and operational controls and may be manual procedures or computer controls.
Controls
The analyst must obtain a measure of the transaction volumes for a specified period of time.
Transaction volumes
Transaction errors are closely related to transaction volume
Error rates
The resources used by the current system include the costs of labor,
computer time, materials (such as invoices), and direct overhead.
Resource costs
The analyst should note points where data
flows come together to form a bottleneck
Bottlenecks and redundant operations
involves passively watching the physical procedures of the
system.
Observation
extension of observation, whereby the analyst takes an active role in performing the user’s work.
• Experience first-hand the problems involved in the operation of the current system.
Task Participation
Fact-Gathering Techniques
- Observation
- Task Participation
- Personal Interviews
- Reviewing Key Documents
the analyst must determine the
acceptable error tolerances for the new system
Error Rates
method of extracting facts about the current
system and user perceptions about the
requirements for the new system
Personal Interviews
allow users to
elaborate on the problem as they see it and
offer suggestions and recommendations.
Open ended questions
used to ask more specific,
detailed questions and to restrict the user’s
responses.
Questionnaires
The organization’s documents are another source of facts about the system being surveyed.
Reviewing Key Documents
is an intellectual process that is
commingled with fact gathering.
System Analysis
• The event that marks the conclusion of the systems
analysis phase is the preparation of a
formal systems analysis report.
• This report presents to management or the steering
committee the survey findings, the problems
identified with the current system, the user’s needs,
and the requirements of the new system.
Systems Analysis Report
Accountant/auditor should be involved in the
needs analysis of the proposed system to determine
if it is a good candidate for advanced audit features
and, if so, which features are best suited for the
system.
The Auditor’s Role in Systems Analysis
Is to produce
several alternative conceptual systems that satisfy the
system requirements identified during systems analysis.
conceptual design phase
Two (2) Approaches of conceptual design phase
- Structured Design Approach
- Object-Oriented Design (OOD) Approach
• a disciplined way of designing systems from the
top down.
• consists of starting with the “big picture” of the
proposed system that is gradually decomposed
into more and more detail until it is fully
understood.
Structured Design Approach
is to build information systems from reusable
standard components or objects.
Object-Oriented Design (OOD) Approach
The auditability of a system depends in part on its
design characteristics. Some computer auditing
techniques require systems to be designed with
special audit features that are integral to the system.
The Auditor’s Role in Conceptual Systems Design
• procedure for selecting the one system from the set
of alternative conceptual designs that will go to the
detailed design phase.
• an optimization process that seeks to identify the
best system.
PHASE 4: System Evaluation and Selection
Two (2) Steps of System Evaluation and Selection
- Perform a Detailed Feasibility Study (TELOS)
- Perform a Cost–Benefit Analysis
concerned with whether the system can be developed under existing technology or if new technology is needed.
Technical feasibility
availability of funds to complete the project.
Economic feasibility
identifies any conflicts between the conceptual system and the company’s ability to discharge
its legal responsibilities.
Legal feasibility
• degree of compatibility between the firm’s
existing procedures and personnel skills and the
operational requirements of the new system.
Operational feasibility
firm’s ability to implement the project within an
acceptable time.
Schedule feasibility
helps management
determine whether (and by how much) the benefits
received from a proposed system will outweigh its
costs.
Cost–benefit analysis
Three (3) Steps of Cost benefit analysis
Step 1: Identify Costs
Step 2: Identify Benefits
Step 3: Compare Costs and Benefits
include the initial
investment to develop and implement the
system.
One-time costs
- cost of
mainframe, minicomputers,
microcomputers, and peripheral
equipment, such as tape drives and
disk packs.
Hardware acquisition
such frequently
overlooked costs as building
modifications, equipment installation,
and freight charges.
Site preparation
apply to all
software purchased for the proposed
system, including operating system
software, network control software, and
commercial applications.
Software acquisition -
incurred by systems
professionals performing the planning,
analysis, and design functions.
Systems design
based on
estimates of the personnel hours
required to write new programs and
modify existing programs for the
proposed system
Programming and testing -
transfer of data from
one storage medium to another.
Data conversion
educating users to operate
the new system.
Training
include operating and
maintenance costs that recur over the life
of the system.
Recurring costs
upgrading of the computer
(increasing the memory), as well as
preventive maintenance and repairs to
the computer and peripheral
equipment.
Hardware maintenance
upgrading and debugging operating
systems, purchased applications, and
in-house developed applications.
Software maintenance
hazards and disasters as fire,
hardware failure,
vandalism, and destruction by
disgruntled employees.
Insurance
routine consumption of such
items as paper, magnetic disks, CDs,
and general office supplies.
Supplies
salaries of individuals
who are part of the information system.
Personnel costs
Step 2: Identify Benefits
A. Tangible Benefits
-Increased Revenues:
-Cost Reduction
B. Intangible Benefits
Step 3: Compare Costs and Benefits
Two (2) Most Common Methods Used:
A. Net Present Value Method
B. Payback Method
• a variation of break-even analysis.
• The break-even point is reached when total
costs equal total benefits.
Payback Method
This formal document consists of a revised feasibility
study, a cost-benefit analysis, and a list and
explanation of intangible benefits for each
alternative design.
• On the basis of this report, the steering committee
will select a single system that will go forward to the
next phase of the SDLC—detailed design.
Prepare Systems Selection Report
