CHAPTER 5:
SYSTEM DEVELOPMENT
PROCESSES
J.L. Boockholdt, Ph.D., C.P.A., C.M.A.
Accountants commonly apply the systems approach in the development of new information systems. Many organization implement the system approach in a formal process called the
system development life cycle. This chapter introduces this formal process and variations of it. Accountants need to know about system development for two reasons.
1. They participate in project teams that design accounting systems;
The Qualities of a Successful
System
Quality Achieved by
1. Correct information Have adequate internal control
2. Timely information Choose a processing method suited to the user’s needs
3. Reasonable time for development a. Properly define the scope of the system b. User project management techniques. 4. Satisfy the organization’s needs
a. Current
b. Future
a. Get steering committee approval for new systems projects
b. Have a long range systems master plan
5. User satisfaction a. User input in setting policies b. User support for projects
Information System Steering
Committee
• A group composed of the chief
information officer and managers from computer user departments.
Among other duties, this committee considers and approves new
Responsibilities of the Information
Systems Steering Committee
1. Review and approve for further study all projects requested by operating
departments or the MIS department.
2. Review and approve the MIS department’s work program and determine priorities for projects.
3. Review periodic progress reports on active systems projects.
4. Review and approve proposed plans for system implementation.
Project Team
A group of employees with varying backgrounds who are assigned
Relevance for the Accountant:
1. Accountants use more computerized information systems than any other professional group.
2. Accountants are user representatives on many project teams when older accounting systems are replaced.
3. Accountants have a personal concern for its accuracy and efficiency.
4. Systems directly affect the decision of managers. Often managers hold accountants responsible for inaccuracies or inequities designed into these
systems.
System Development Life Cycle
The evolutionary pattern followed by most accounting systems. It consists of
four phases: system analysis, system design, system implementation, and
System Planning
Ideally, system development takes place within the context of a systems master
plan that coordinates new information system development projects with the
System Analysis
The first phase of the system
development life cycle. The process of examining an existing information system and its environment for the
Reasons for Initiating Systems
Analysis
1. Problem Solving
An existing system does not meet its
objectives. E.g. A small business system has been outgrown.
2. New Requirement
Information that was not needed before. E.g. Reporting dividends and interest paid to
comply with tax law.
3. New Technology
System Design
The second phase of the system
development life cycle. The process of translating the recommendations made during systems analysis into a form that
System Implementation
The third phase of the system
development life cycle, The process of converting the description created during system design into a working
System Operation
The last place of the system
development life cycle. The period of time during which a working
information system provides
Formal System Development
Methodologies
1. Structured Systems Analysis and Design
Focus on Logical System instead of Physical System
2. Information Engineering
Data driven, not process driven
Rapid Application
Development
• An approach to developing
information systems that is intended to decrease the time and cost of
development. It avoids the extensive decision checkpoints and approval processes of formal system
RAD Techniques
• User workshops
A meeting of all key people involved in key project, both users and information systems professionals.
• Prototyping
An iterative process that avoids the
RAD Techniques
• Timeboxes
A fixed time period at the of which the project team must deliver a working system.
• Reusable components
Components of a system include computer programs, forms, display screens,
documentation, and paper reports.
Prototyping
An iterative system development
process in which a small project team quickly develops a working information system and allows users to modify it
Suggested Steps in Prototyping
1. Analysis. Create an incomplete paper model of the system based on
preliminary interviews with users.
2. Database development. Create a test database for use in prototyping.
Using a relational database
Suggested Steps in Prototyping
3. Menu development. Describe the
menus that will guide the user of the system. A menu identifies functions to be performed.
Suggested Steps in Prototyping
5. Prototype iteration. Using software development tools, create each
module. This produces a working model of the system that a user can easily modify. Make changes to the prototype until the user is satisfied.
6. Detailed specifications. Refine the system as necessary to make it
efficient in creating a production
OBJECT ORIENTED
DEVELOPMENT
An approach to developing information systems that is intended to decrease
developing time and costs and to make system maintenance easier. It requires identifying the basic elements, or
Auditor’s Role in the
Development Process
System Analysis Phase
Provide audit reports on systems being examined to the study team.
System Design Phase
Review the proposed design:
1. Reports. Identify information needed in reports for control and auditability
2. Processing steps. Suggest control procedures
3. Equipment selection. Ensure that those selected conform to existing company policies
4. Data files. Determine that data will be accurate and
Auditor’s Role in the
Development Process
System Implementation Phase
During system testing, review adequacy of test data and results of tests.
Review plans for conversion to ensure that accurate data are maintained during changeover to the new system.
System Operation Phase
During the post-implementation review, assess the
Audit Trail
Information, including journal entry numbers, posting references, and
document numbers, that is included on the outputs of an accounting system.
They allow auditor to identify the
Internal Controls
The features of an accounting system that prevent and detect errors and fraud.
Question A
• Explain what is meant by a successful
information system!
• Define the following terms:
1. System analysis 2. System design
3. System implementation 4. System operation
• What are some reasons for initiating
Question B
• In a large organization, who performs
long-range system planning? Medium-range? Short-range?
• Explain why we say that the life of an
information system follows a cycle?
• In which ways are the preliminary
description and the detailed
Question C
• What can happen when employees
refuse to accept a new information system?
• Why should an accountant be
concerned about the success of an information system?
• Which activities take place during
Question D
• Identify some reasons why employees
refuse to accept new systems?
• What can be done to gain user
acceptance of a new system?
• Why should auditors participate in the
