One of the firm’s audit partners, Alice Goodwin, justhad lunch with a good friend, Sara Hitchcock, who is president of Granger ContainerCorporation. Granger Container Corp. is a fast-growing company that has been in businessfor only a few years. During lunch, Sara asked Alice for some advice and direction on howGranger Container should structure its systems development process within the InformationSystems Department. Sara noted that because Granger has experienced such tremendousgrowth, the systems development process has evolved into its current state without muchdirection. Given Granger Container’s current size, Sara questions whether their currentprocesses are reasonable. Sara’s concern is magnified by the fact that she has little understanding of information systems processes. Alice told Sara about your information systemsevaluation experience and agreed to have you look at Granger Container’s current systemsdevelopment procedures. Sara gave Alice the following summary of the current processes:Eric Winecoff is the information systems manager at Granger Container and hasbeen at the company for 3 years. Before becoming an employee, Eric providedsoftware consulting services for Granger Container. Granger Container purchaseda basic software package from Eric’s former employer. Granger Container has thecapability to make extensive modifications to the purchased software to adapt thesoftware to Granger Container’s specific business needs.Program change requests are initiated by either the operations staff (two employees)or the programming staff (two employees), depending on the nature of the change.All change requests are discussed in Eric’s office with the initiating staff. Based onthat discussion, Eric provides a verbal approval or denial of the requested change. Forapproved projects, he encourages the programmers to visit with him from time to timeto discuss progress on the projects. Eric’s long and varied experience with this particular software is helpful in the evaluation of work done, and he is able to make substantivesuggestions for improvement. Eric has complete faith in his programmers. He believesthat if he controlled their activities too carefully, he would stifle their creativity.Upon completion of the technical programming, Eric reviews the programs andrelated systems flowcharts. Eric only rarely identifies last-minute changes beforegranting his final approval for implementation. One evening a week is set aside in thecomputer room for program debugging and testing.The programmers stay late on those evenings so that they can load the programsthemselves. To speed up the coding, debugging, and testing process, the programmerswork with the actual production program. As a safeguard, however, testing is done oncopies of the data files. The original data files are locked carefully in the file storageroom. Eric is the only person who has access to the room.When program changes are tested to the satisfaction of the programmers, Ericreviews the test results. If he approves the test results, he personally takes care of allthe necessary communications and documentation. This involves preparing a shortnarrative description of the change, usually no longer than a paragraph. A copy of thenarrative is sent to the user. Another copy is filed with the systems documentation.When the narrative is complete, Eric instructs operations to resume normal production with the new program.a. Describe controls in Granger Container’s systems development and program changeprocesses.b. Describe deficiencies in Granger Container’s systems development and programchange processes.c. Provide recommendations for how Granger Container could improve its processes.
One of the firm’s audit partners, Alice Goodwin, just
had lunch with a good friend, Sara Hitchcock, who is president of Granger Container
Corporation. Granger Container Corp. is a fast-growing company that has been in business
for only a few years. During lunch, Sara asked Alice for some advice and direction on how
Granger Container should structure its systems development process within the Information
Systems Department. Sara noted that because Granger has experienced such tremendous
growth, the systems development process has evolved into its current state without much
direction. Given Granger Container’s current size, Sara questions whether their current
processes are reasonable. Sara’s concern is magnified by the fact that she has little understanding of information systems processes. Alice told Sara about your information systems
evaluation experience and agreed to have you look at Granger Container’s current systems
development procedures. Sara gave Alice the following summary of the current processes:
Eric Winecoff is the information systems manager at Granger Container and has
been at the company for 3 years. Before becoming an employee, Eric provided
software consulting services for Granger Container. Granger Container purchased
a basic software package from Eric’s former employer. Granger Container has the
capability to make extensive modifications to the purchased software to adapt the
software to Granger Container’s specific business needs.
Program change requests are initiated by either the operations staff (two employees)
or the programming staff (two employees), depending on the nature of the change.
All change requests are discussed in Eric’s office with the initiating staff. Based on
that discussion, Eric provides a verbal approval or denial of the requested change. For
approved projects, he encourages the programmers to visit with him from time to time
to discuss progress on the projects. Eric’s long and varied experience with this particular software is helpful in the evaluation of work done, and he is able to make substantive
suggestions for improvement. Eric has complete faith in his programmers. He believes
that if he controlled their activities too carefully, he would stifle their creativity.
Upon completion of the technical programming, Eric reviews the programs and
related systems flowcharts. Eric only rarely identifies last-minute changes before
granting his final approval for implementation. One evening a week is set aside in the
computer room for program debugging and testing.
The programmers stay late on those evenings so that they can load the programs
themselves. To speed up the coding, debugging, and testing process, the programmers
work with the actual production program. As a safeguard, however, testing is done on
copies of the data files. The original data files are locked carefully in the file storage
room. Eric is the only person who has access to the room.
When program changes are tested to the satisfaction of the programmers, Eric
reviews the test results. If he approves the test results, he personally takes care of all
the necessary communications and documentation. This involves preparing a short
narrative description of the change, usually no longer than a paragraph. A copy of the
narrative is sent to the user. Another copy is filed with the systems documentation.
When the narrative is complete, Eric instructs operations to resume normal production with the new program.
a. Describe controls in Granger Container’s systems development and program change
processes.
b. Describe deficiencies in Granger Container’s systems development and program
change processes.
c. Provide recommendations for how Granger Container could improve its processes.
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