Van Dieman's Banking Corporation (VDBC) is a large, Hobart-based bank with branches scattered throughout Australia and New Zealand. It was first established during the convict days in Tasmania, and over the past 100 years it has grown to offer a wide range of wholesale and retail banking services.

You are an information systems audit specialist in the accounting firm that has just taken over the external audit of the bank. During interim audit work, your partner asks you to examine controls over capacity planning associated with the bank's computer systems. From discussions with the previous auditor, she is aware that the bank's computer systems have experienced problems in the past because they have been overloaded. As a result, the bank's employees have sometimes taken shortcuts in terms of controls to try to reduce response-time and turnaround delays that they would otherwise experience. To reduce the load on the computer systems, top managers have also requested that various reports (including those used for capacity planning and control purposes) not be produced. During the previous audit, VDBC's management was asked to design and implement a reporting system that would allow them to identify information systems capacity problems on a timely basis.

When you interview senior management in the information systems division about capacity management, you are told that weekly reports are now produced showing values for the following four performance indices for each of the bank's major systems:

• Turnaround time,

• Reaction time,

• Throughput rate, and

• Processor utilization.

When you ask how these indices were selected, you are told that they were chosen by the operations manager. When you ask how the reports are used, you are told that they are reviewed by the operations manager who is responsible for then alerting the manager of the information systems division to any problems that exist.

Required: In light of these findings, what conclusions would you draw about the reliance you would place on the reporting system as a means of identifying capacity planning problems with VDBC? What recommendations would you now give to your partner as to how you should now proceed? Also, what are you initial conclusions in relation to the implications of your findings for the conduct of the remainder of the audit?