Discuss why revising documentation is an important part of change management. Explain the purpose of a change request form. Why should change request procedures be documented? Using an Internet Web browser, search and examine two recent (within the last 5years) situations where the implementation of changes and/or modifications to existing financial application systems have failed. Your task: Summarize why such implementations failed. Then, identify solutions or controls that, if implemented, may have avoided these failed implementations. Support your reasons and justifications with IT literature and/or any other valid external source. Include examples as appropriate to evidence your case point. Submit a word file with a cover page, responses to the tasks above, and a reference section at the end. The submitted file should be between 6 and 8….
The Company you work for is in the process of determining whether to have an information security audit (ISA) performed. Even though the Company is not (yet) required to have an ISA for compliance purposes with laws, rules, and/or regulations, they are very aware of the benefits such audit can provide. However, they also know how pricy these specialized audits are. Would you be inclined to advise your Company go through such type of audit, yes or no? Explain your position. List 10 sources for audit tools, best practices, and/or relevant audit information when performing information security audits that were discussed in this chapter.
Distinguish between outsourcing and off-shoring. Explain the following relevant terms and concepts when involved in an audit of a service organization. a. Service organization. b. User entity. c. Roles and responsibilities of user auditor. d. Roles and responsibilities of service auditor. e. Purpose of AICPA’s Statements on Standards for Attestation Engagements (SSAE) 16, section AT 801 (PCAOB 324), “Reporting on IT Controls at Service Organizations.” f. SSAE 16, section AT 801’s two types of reports service auditors typically provide.
Name and summarize control areas that the IT auditor should include in his or her review when examining a software acquisition. As stated in the textbook, outsourcing refers to the transfer of service delivery to a third party, allowing companies to concentrate on core competencies. As the IT Audit Manager, your client asks for advice on outsourcing, specifically whether they should outsource their main financial accounting system. You are well aware of both benefits and risks of outsourcing. Would you advise your client to go ahead and outsource their main financial accounting system? Yes? No? Explain your position.
Using an Internet web browser, search for AICPA’s Statement on Standards for Attestation Engagements (SSAE) No. 18, and perform the following: a. Explain the relevance of SSAE 18 and what does it report on. b. Identify advantages of SSAE 18 to auditors. c. Contrast SSAE 18 (as appropriate) with SSAE 16. Support your reasons and justifications with Audit literature and/or any other valid external source. Include examples as appropriate to evidence your case point. Submit a word file with a cover page, responses to the tasks above, and a reference section at the end. The submitted file should be between 5 and 7 pages long (double line spacing), including cover page and references. Be ready to present your work to the class.
ABC plc is about to launch a new product. Facilities will allow the company to produce up to 20 units per week. The marketing department has estimated that at a price of £8,000 no units will be sold, but for each £150 reduction in price one additional unit per week will be sold.
Fixed costs associated with manufacture are expected to be £12,000 per week. Variable costs are expected to be £4,000 per unit for each of the first 10 units; thereafter each unit will cost £400 more than the preceding one. The most profitable level of output per week for the new product is
(A) 10 units
(B) 11 units
(C) 13 units
(D) 14 units
(E) 20 units
B Ltd manufactures blodgets. It has been ascertained that the market for blodgets is follows:
● at unit price £20, no blodgets are demanded or sold;
● at unit price nil, 5,000 blodgets are demanded;
● for price levels intermediate between £20 and nil there is a linear relationship between
price and demand.
The variable cost of manufacturing a blodget is £5 at all levels of output.
Calculate the unit selling prices which will: (a) maximise revenue; and (b) maximise profit.
A company buys in sub-assemblies in order to manufacture a product. It is reviewing its
policy of putting each sub-assembly through a detailed inspection process on delivery, and
is considering not inspecting at all. Experience has shown that the quality of the sub-assembly
is of acceptable standard 90 per cent of the time. It costs £10 to inspect a sub-assembly and
another £10 to put right any defect found at that stage. If the sub-assembly is not inspected
and is then found to be faulty at the finished goods stage the cost of rework is £40.
Advise the company whether or not they should change their policy.
The management of a business has to decide whether to launch a new product or not. If
the product is launched there are two elements of uncertainty:
● There is a 0.7 probability that sales will be 8,000 units per month but a 0.3 probability that
sales will be 5,000 units per month.
● If sales are 8,000 units per month, there is a 0.5 probability that the contribution per unit
will be £2 and a 0.5 probability that it will be negative _ £(1). If sales are 5,000 units per
month there is a 0.6 probability that the contribution per unit will be £3 and a 0.4 probability
that it will be £1.
A company has prepared the design for a new product. It can either sell the design, for
£100,000, or attempt to develop the design into a marketable product at a cost of £150,000.
If the company decides to develop the product, the chances of success are 0.7. If the
attempt fails the design can only be sold for £20,000. If the attempt succeeds the business
has the choice of either selling the design and developed product for £180,000 or marketing
the product. If the product is marketed then there is a 0.6 probability that the product
will generate a cash inflow of £800,000 and a 0.4 probability that it will generate a cash outflow
of £(100,000). Both figures exclude items previously mentioned.
Draw a decision tree….