Howard Industries has had a high rate of staff turnover in its information technology department during the last year. It was discovered during exit interviews with workers that they were unhappy with their working environment. Employee relationship management (ERM) was a specialty of the management consulting company that Howard chose to work with. One of the recommendations given by the consulting company was to reorganize IT operations in order to foster a stronger feeling of "ownership" among IT employees. A study conducted three months after the start of the new operation revealed a significant rise in the level of work satisfaction among the IT group. The following procedures were noticed by the auditor while conducting the audit planning phase of the annual financial audit: Individual information technology (IT) specialists are allocated solely to assist particular business activities such as sales processing, invoicing, customer account management, and other similar tasks. IT services provided by each expert include computer operations, program modifications, and system documentation in the form of record layouts, system flowcharts, and program listings for the benefit of their respective users. They also reconcile computer output reports and records of transaction failures to ensure that they are accurate. It is required that you identify any control issues you have with the new activities and explain them. b. What kinds of computer fraud may be possible as a result of this operating approach?
Howard Industries has had a high rate of staff turnover in its information technology department during the last year. It was discovered during exit interviews with workers that they were unhappy with their working environment. Employee relationship management (ERM) was a specialty of the management consulting company that Howard chose to work with. One of the recommendations given by the consulting company was to reorganize IT operations in order to foster a stronger feeling of "ownership" among IT employees. A study conducted three months after the start of the new operation revealed a significant rise in the level of work satisfaction among the IT group. The following procedures were noticed by the auditor while conducting the audit planning phase of the annual financial audit: Individual information technology (IT) specialists are allocated solely to assist particular business activities such as sales processing, invoicing, customer account management, and other similar tasks. IT services provided by each expert include computer operations, program modifications, and system documentation in the form of record layouts, system flowcharts, and program listings for the benefit of their respective users. They also reconcile computer output reports and records of transaction failures to ensure that they are accurate. It is required that you identify any control issues you have with the new activities and explain them. b. What kinds of computer fraud may be possible as a result of this operating approach?
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