You are the manager of internal audit of Coverit Corporation, a large insurance company. One day you receive an urgent letter from the controller expressing his concerns about some organizational changes that are about to occur in the information systems department. He has received a memorandum from the vice president of information systems explaining that in the future all new information systems projects will be designed and implemented using the chief programmer team approach. The memorandum describes the nature of chief programmer teams, discusses the benefits of using chief programmer teams to develop information systems, and explains how users will be affected in their interactions with the information systems department during the development of new systems when a chief programmer team is used.

Over the next few years, the controller has several major new information systems scheduled for development. These systems have substantial significance in terms of the underlying data they provide as a basis for preparing Coverit's financial statements. In this light, he is concerned that the organizational structure of the chief programmer team violates a fundamental internal control principle-namely, effective separation of duties. He asks you to advise him on whether his concerns are warranted.

Required. Prepare a brief report that provides the analysis requested and give a recommendation as to whether you think the organizational change proposed by the vice president of information systems should he allowed to proceed. List, also, some controls that might be used to overcome any exposures you think arise when chief programmer teams are used to develop information systems.