Vorderingsvraag / Progress question

A-15

15 marks

You are currently employed in the technical division of Boshoff, Von Wielligh & Links
Incorporated. You recently obtained your MComm(Computer auditing) degree at
Stellenbosch University. You specialise in computer auditing. You were approached
by the audit team responsible for the audit of itGAP Ltd., to provide them with
assistance during their audit. itGAP Ltd. manufactures computers at their factory and
distribution depot located in Welgevonden. In order to keep up with orders, the
company converted to a computerised real-time sales system during 2008. The
company has a separate Information System (IS) division that is managed by the IS-
manager, Mr Basson.

During a meeting in June 2010, Mr Basson informed the company’s technicians that
the directors decided to switch from a manual to a computerised cost management
system. The new system contains a standard costing module that will improve
inventory control and production management because it can generate more
accurate reports. The following minutes were taken on a subsequent progress
meeting:

Date: 30 June 2010

Room: Small boardroom
Subject: Feedback - computerised cost management system
Present: Mr B Basson, Ms R Goosen, Ms J Terblanche, Ms W
Van Reenen; Mr Z Enslin; Mr H Liebenberg; and Mr E Ipland.
Apologise: None

1. The cost management system switched from a manual to a computerised

system.
2. A thorough feasibility study was performed before the decision was made to
switch from the manual to the computerised system. The implementation
(conversion) was approved by all interested parties.
3. Three personal computers and all the necessary computer equipment was
purchase for the conversion.
4. A software consultant was appointed to write the cost management software
program according to itGAP Ltd’s specific needs and standards.
5. Mr Basson, requested that all parties be involved at the testing and that, when
the data-conversion is completed, proper tests be performed to identify any
errors. The following must be used (for example):
 Calculated balancing control total on the old and new system’s data.
 Investigate the exception reports and unusual items.
 Approval from the user departments, for who the data conversion was
performed, must be obtained.
6. He also requested that thorough project management principles be
implemented in order to prevent unnecessary errors or delays.

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Vorderingsvraag / Progress question

7. The auditor will also be requested to provide assistance in order to ensure

good conversion control are implemented.
8. A thorough post-implementation investigation must be performed by all
interested parties.

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Vorderingsvraag / Progress question

Because itGAP Ltd’s entire computer system (both sales and cost management
systems) is now computerised, the audit team decided to use test data to test the
system. They found that the advantages of using test data exceed the costs after
they received a budget from your departmental head, Dr PO Oliveria and the
computer specialist departmental head. The budget was approved by the directors of
itGAP Ltd. The directors also gave their permission that test data could be used
because the necessary data was easily obtainable from the new system and
because they believed that they could save money on future audits if:
1. the objectives, as set out in the audit plan and the computer audit teams' audit
planning document, can be achieved by relying on the internal control measures
of the system.
2. all risks relating to test data can be addressed by the audit team.

REQUIRED

Advise the audit team on the following:

1. Recommend additional controls or procedures that itGAP Ltd. should have

followed during the conversion to the new computerised cost management
system during June 2010. (10)

2. List the risks associated with the use of test data. (5)

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Vorderingsvraag / Progress question

A-15 15 marks

1. SYSTEM CONVERSION

▪ The conversion must be planned, with time tables for dates and times by which
different task must be performed. (1)
▪ Data conversion: the standing data of the previous manual system must be
prepared in electronic files for the computerised costing system. (1)
- The data control group from the information system division must take control
of the conversion. (1)
- A senior member of management must also be appointed to supervise the
data conversion project. (1)
- Before data conversion starts, controls must be performed to ensure that the
data on the old system is complete, accurate and valid, e.g. by reconciliations
and recalculations. (1)
▪ Training users:
- Sufficient training must be provided to all users in order to ensure that
everyone is familiar with the use of the new system. (1)
- User manuals must also be prepared. (1)
▪ Documentation: System documentation, e.g. flow charts, descriptions, operator
manuals, must be prepared or updated. (1)
▪ Implementation:
- Implementation must take place under the supervision of a senior responsible
person. (1)
- Implementation of the new system must be executed in an appropriate
manner- for example, parallel testing where the old and new systems run
simultaneously and comparing the results. (1)
AVAILABLE 10
MAXIMUM 10

2. RISKS
 The same program or version of the program must be used throughout the year.
(1)
 The element of surprise must not be lost. (1)
 Corruption of live data (and risk of viruses) must be limited. (1)
 System may “crash”. (1)
 Unauthorised changes to or overrides of the system must be identified. (1)
 As so far possible, all possible situations and programmed controls need to be
tested. (1)
 It may be difficult to remove the data from the system. (1)
AVAILABLE 5
MAXIMUM 5