Auditing Accountant

You are doing the audit of Phelps College, a private school with approximately 2,500 students. With your firms consultation, they have instituted an IT system that separate the responsibilities of the computer operator, systems analyst, librarian, programmer, and data control group by having a different person do each function. Now, a budget reduction is necessary and one of the five people must be laid off you are requested to give the college advice's as to how the five functions could be done with reduced personnel and minimal negative effects on internal control. The amount of time the functions take is not relevant because all five people also do non accounting functions.

a. Divide the five functions among four people in such a way as to maintain the best possible control system.

b. Assume that economic times become worse for Phelps College and it must terminate employment of another person. Divide the five functions among three people in such a way as to maintain the best possible internal control. Again, the amount of time each function takes should not be a consideration in your decision.

C. Assume that economic times become so severe for Phelps College that only two people can be employed to do IT functions. Divide the five functions between two people in such a way as to maintain the best possible control system.

d. If the five functions were done by one person, will internal controls be so inadequate that an audit cannot be done? Discuss