5 SYSTEMS DEVELOPMENT AND PROGRAM CHANGE ACTIVITIES
PARTICIPANTS IN SYSTEMS DEVELOPMENT
Four Broad Groups
1. Systems professionals - systems analysts, systems
engineers, and programmers.
- build the system
- gather facts about problems with the current system,
analyze these facts, and formulate a solution to
solve the problems
- product of their efforts is a new system
2. End users - for whom the system is built
- include managers, operations personnel, accountants,
and internal auditors
- systems professionals work with the primary users to
obtain an understanding of the users’ problems and
a clear statement of their needs
3. Stakeholders - individuals either within or outside the
organization who have an interest in the system but
are not end users
- include accountants, internal and external auditors,
and the internal steering committee that oversees
systems development
4. Accountants/Auditors - professionals who address the
controls, accounting, and auditing issues for systems
development
- (SOX legislation) prohibits external auditors from
direct involvement in an audit client’s systems
development activities
Why Are Accountants and Auditors Involved with
SDLC?
i. creation of an information system entails significant
financial transactions - Accountants are as concerned
with the integrity of this process as they are with any
manufacturing process that has financial resource
implications.
- accountants and auditors are experts in financial
transactions and thus can provide critical input into
the system regarding controls, integrity, timeliness,
and a number of other important aspects of financial
transactions.
ii.nature of the products that emerge from the SDLC -
quality of accounting information rests directly on
the SDLC activities that produce accounting
information systems (AIS)
- accountant’s responsibility: ensure that the systems
employ proper accounting conventions and rules,
and possess adequate controls
- accountants are greatly concerned with the quality of
the process that produces AIS
How Are Accountants Involved with the SDLC?: Three
ways.
1. Accountants are users.: must provide a clear picture of
their problems and needs to the systems professionals
- must specify accounting techniques to be used,
internal control requirements, and special
algorithms
2. Accountants participate in systems development as
members of the development team.: accountant
may be consulted to provide advice or to determine if
the proposed system constitutes an internal control
risk
- level of auditor participation is limited by
independence issues in professional standards and
ethics
3. Accountants are involved in systems development as
auditors.: AIS must be auditable. Some computer
audit techniques require special
- auditor has a stake in all systems and should be
involved early in their design, especially regarding
their auditability, security, and controls
INFORMATION SYSTEMS ACQUISITION
Two Ways
1. In-House Development - requires maintaining a full-
time systems staff of analysts and programmers who
identify user information needs and satisfy their needs
with custom systems
2. Commercial Systems - purchased from software
vendors
Trends in Commercial Software
i. the relatively low cost of general commercial
software as compared to customized software;
ii. the emergence of industry-specific vendors
who target their software to the needs of
particular types of businesses;
iii. a growing demand from businesses that are too
small to afford in-house systems’ development
staff;
iv. the trend toward downsizing of organizational
units and the resulting move toward the
distributed data processing environment, which
has made the commercial software option more
appealing to larger organizations
Types of Commercial System
1. Turnkey Systems- completely finished and
tested systems that are ready for
implementation
- sold only as compiled program modules, and
users have limited ability to customize them
to their specific needs
 - have software options that allow the user to • The need for customized systems
customize input, output, and some processing • Maintenance
through menu choices
Types
a. General Accounting Systems - designed to
serve a wide variety of user needs
- mass-producing a standard system, the
vendor is able to reduce the unit cost of
these systems to a fraction of in-house
development costs
- designed in modules that allows users to
purchase the modules that meet their
specific needs
b.Special-Purpose Systems - target selected
segments of the economy
- standardized systems to deal with
industry-specific procedures.
i. Office Automation Systems - computer
systems that improve the productivity
of office workers
- Examples: word processing
packages, database management
systems, spreadsheet programs,
and desktop publishing systems.
2. Backbone Systems - basic system structure on
which to build
- come with all the primary processing modules
programmed
- vendor designs and programs the user interface
to suit the client’s needs
- customer can create a highly customized
system (but expensive and time consuming)
3. Vendor-Supported Systems - hybrids of custom
systems and commercial software
- vendor develops (and maintains) custom
systems for its clients
- systems themselves are custom products, but
the systems development service is
commercially provided
- vendor serves as the organization’s in-house
systems development staff, the client
organization must rely on the vendor to
provide custom programming and on-site
maintenance of systems
- helps to reduce development costs charged to
the client firms.
Advantages of Commercial Software
• Implementation Time
• Cost
• Reliability
Disadvantages of Commercial Software
• Independence