System Development and Program Change Activities

• The ___ constitutes a set of activities by which organizations obtain IT-based information systems.


  System Development Process
• These activities are of interest to accountants and auditors for two reasons:

  1. The creation of an entity-wide information system involves significant financial transactions.
  2. The quality of accounting information presented in an organization's financial statements is directly related to the quality of the accounting information systems that process and report it.
• __ are individuals actually built the system.

  System Professionals
• __ are those for whom the system is built.

  End Users
• _ are individuals who have an interest in the system but are not formal end users.

  Stakeholders
• Organizations acquire information systems in two ways:

  1. They develop customized systems in-house through formal systems development activities; and
  2. They purchase commercial systems from software vendors.
• Four factors have contributed to the growth of the commercial software market:

  1. The relatively low cost of general commercial software as compared to customized software;
  2. The emergence of industry-specific vendors who target their software to the needs of particular types of businesses;
  3. A growing demand from businesses that are too small to afford in-house systems' development staff; and
  4. The trend toward downsizing organizational units and the move toward distributed data processing has made the commercial software option appealing to larger organizations.
• __ are completely finished and tested systems that are ready for implementation.

  Turnkey Systems
• Turnkey systems are usually sold only as compiled program modules, and users have limited ability to customize them to their specific needs.
• ___ are designed to serve a wide variety of user needs.

  General Accounting Systems
• Some software vendors create ___ that target selected segments of the economy.

  Special-Purpose Systems
• ___ are computer systems that improve the productivity of the office workers.

  Office Automation Systems
• __ provide a basic system structure on which to build.

  Backbone Systems
• ___ offer a vast array of modules for dealing with almost every conceivable business process, and all are interfaced seamlessly into a single system.

  Enterprise Resource Planning
• Customizing a commercial system can be expensive and time consuming.
• ___ are systems that the vendor develops and maintains for the client organization.

  Vendor-supported systems
• Custom in-house systems often have long development and implementation timelines while commercial software can be implemented quickly once a need is recognized.
• A single user must wholly absorb in-house development costs. On the other hand, since the cost of commercial software is spread across many users, the unit cost is reduced to a fraction.
• Reputable commercial software packages are thoroughly tested before their release to the general consumer market and therefore less likely to contain logic errors than an equivalent in-house system.
• Purchasing a vendor-supported system creates a dependency on the vendor for maintenance. The client firm runs the risk that the vendor will cease to support the system or even go out of business.
• The prime advantage of in-house development is the ability to produce applications to exact specifications. Sometimes, the user's needs are unique and complex, and commercially available software is either too general or too inflexible.
• When user needs change, modifying commercial software to accommodate the changes may be difficult or even impossible. In-house development, however, provides users with proprietary applications that can be effectively maintained.
• Information systems have a life cycle that begins with the recognition of an information problem.
• The length of the systems development life cycle (SDLC) will vary among business organizations depending on their industry, competition pressure, the degree to which technological innovation impacts the company, and the scale of the project.
• ___ involves conceptual steps that can apply to any problem-solving process.

  New Systems Development
• The objective of __ is to link individual system projects or applications to the strategic objectives of the firm.

  System Planning
• ___ involves the allocation of systems resources at the macro level.

  Strategic Systems Planning
• Technically, strategic systems planning is not part of the SDLC because the SDLC pertains to specific applications.
• The purpose of __ is to allocate resources to individual applications within the framework of the strategic plan.

  Project Planning
• The __ provides management with a basis for deciding whether to proceed with the project.

  Project Proposal
• The __ is actually a two-step process involving first a survey of the current system and then an analysis of the user's needs.

  System Analysis
• Most systems are not developed from scratch.
• These includes external entities, such as customers and vendors, as well as internal sources from other departments.

  Data Sources
• These include both managers and operations users.

  Users
• 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
• Data flows can also be represented in Unified Modeling Language (UML) diagrams.
• These includes both accounting and operational controls that may be manual procedures or computer controls.

  Controls
• _ involves passively watching the physical procedures of the system that allows the analyst to determine what gets done, who performs the tasks, when they do them, how they do them, why they do them, and how long they take.

  Observation
• _ is a method of extracting facts about the current system and user perceptions about the requirements for the new system.

  Interviewing